MANILA, Philippines - Money is often a sensitive topic among couples, and many avoid discussing it altogether. Yes, we know - money is hardly a romantic topic.
However, money matters pervade all aspects of your life, individually and as a couple. In fact, you might discover that money matters come up so frequently that you really cannot avoid talking about it at all.
As a couple, you will find yourself discussing everything from the household budget (how much should we spend on electricity?) to entertainment (can we afford to watch a movie twice a week?) to investments (should we put our money in stocks or the money market?).
You will also be dealing with various financial decisions as you go through the various stages of your life as a couple, from the time you discuss your wedding all the way to the time when the children are grown and you are in your retirement years, possibly thinking of how to appropriate your savings for the next generation.
Unfortunately, money is often a cause of disagreement among couples. Although there is a common misperception that lack of money is the most frequent cause of problems, this is not entirely true. As with most disagreements, spats involving money are almost always rooted either in different expectations or lack of communication. Ideally, you should begin discussing money matters even before you decide to get married. If you haven’t done so, it is always a good time to start talking about your financial concerns.
Here are some ways that couples can better deal with their money together.
Keep communication lines open.
Don’t surprise your partner when it comes to financial matters. You wouldn’t want to shock your partner with news that you’ve accumulated a huge debt that you’ve kept a secret for many years. Communication also allows you to better understand your partner’s views on money and may give you an insight into his or her appetite for risk, which will come in handy when you begin to talk about investments.
No harm in asking.
Before making a major financial decision such as making a large ticket purchase or taking out a big loan, always ask your partner for his or her views. Just because you can afford it and will use your own money does not make the decision all your own to make. Your decision may affect your family’s and your partner’s finances, so it is just right that you seek his or her views before making a major move.
List your priorities.
Set time to discuss what your dreams and aspirations are individually and as a couple. Knowing what matters the most to your partner will allow you to plan for each one’s priorities, while at the same time pursuing your joint priorities. For instance, your individual dream may include going back to school for further studies while for your partner, it may be purchasing a car. Also talk about what you matters most financially to you as a couple, so that you can better understand each other’s thoughts when it comes to purchasing or investment decisions.
Create your budget together.
Your household budget should reflect the needs of both partners. Therefore, it should be planned jointly, to ensure that each one’s needs are covered and so that expectations are properly communicated. This also allows you to better manage your cash flow as a couple. In coming up with a budget, agree on a realistic number that reflects your needs and your current state of finances.
Have a common fund and individual funds.
Continue to keep your individual accounts while also maintaining a joint account. This is a good way of lessening friction and gives each one the freedom to spend his own funds. Each partner could contribute to the joint account, the amount of which should be agreed upon by both partners.
Finally, treat family finances as a business matter.
Try to be rational and keep emotions in check when discussing money as a couple. Since discussions pertaining to finance may be emotionally laden for some, it is best to have simple rules on how money discussions should proceed. For instance, you can set a rule that the money discussions should not be carried out over dinner, or that the discussion will not touch on any other family concern, or that no one will use an accusatory tone whenever finances are discussed.
Make rules based on your individual circumstances, and make sure that these rules are mutually acceptable to you and your partner. This will allow you to better communicate with each other and come up with better decisions that could only benefit you and your family.
Grow Your Money is an editorial partnership between ABS-CBNnews.com and Citi Philippines to promote financial education and provide helpful information to Filipinos on how to better manage their personal finances.
Visit www.citibank.com.ph for more information.