When it comes to managing finances with your spouse/significant other, things can get murky if you go about it the wrong way. Money problems can lead to estrangement, and even divorce. Here are a few tips that might help you manage your finances as a household better. Please note, you don’t have to follow every single point of advice here–every situation is different.
- Be honest. You don’t have to disclose every time you went and bought a cup of coffee, but when it comes to major purchases, it is important that you are honest with your partner about it. Don’t skirt around this issue. Hiding money things from your significant other is never a good idea.
- Create a joint budget. Whether you are married or not, if you are living together and share household expenses the best idea is to create a joint (or household) budget. You can create anything from a grocery budget to a “play” (going out, clothes, entertainment) budget in order to keep you both in check. Use our monthly budget spreadsheet to get you started.
- Contributions made based on income. If one of you makes $100,000 and the other $40,000, the division of household expenses should reflect that. Taking this example, if rent is $2,000, partner A pays $1,400 while partner B contributes $600.
- Try and live on one income. This is probably the soundest but also hardest advice to follow. You need to make sure there is an understanding of how finances will be managed if one of the incomes would disappear, and how to invest and save the money of the “invisible” income.
A lot of these things come right down to communication. For some people, keeping finances separate during marriage or cohabitation is ideal, but for others it is more difficult to keep track. Be sure to talk with your partner thoroughly about your options and what works best for you both and your situation.