How should a Couple Plan their Finances?

When a couple decides to call their marriage off, many people believe it to be due to infidelity issues. However, what many people don’t know, that finances, and not infidelity is the key reason behind two people untying the knot.

A recent report claims that 70% of the couples in the US talk about money and financial planning, but the truth is that talk alone won’t solve any problem. When two people come together, there are certain things they should keep in mind, regarding finances.

So, how can a couple make the correct financial decisions? What are some of the financial mistakes that most couples make? This article will try to address this issue while imparting some tips for personal finance of couples. Take a look:

#1. It’s ‘Our’ Money

The money that a couple brings in collectively should always be seen as collective money. Dividing money based on incomes is definitely the wrong approach. Many couples face this issue- if they should maintain personal bank accounts or if they should merge all the money into one joint account. Economists say that the latter is the right way to deal with finances as it equips a couple for the future.

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#2. It’s ‘Our’ Debt

Just like money should be merged between a couple, debts should be too. Say, if the husband has considerable debts, then the wife should never leave him alone to figure out ways to clear it. Rather, a couple should see each other’s debts as theirs and tackle it together. In fact, debt is ranked number one among the reasons that caused fights between a couple.

#3. Keeping A Budget

As different individuals, you often have different spending habits and tend to spend on different things. However, as a couple, you need to keep a check on the money that you invest in a given month. Spending is the second most common reason that makes a couple fights. The solution is to decide the budget for each month and then, keep tabs on it throughout. This way, you’ll end up saving more money.

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#4. Invest Wisely

Merely putting the money in a bank account won’t bring you much return. You have to invest. However, investment is full of risks and a couple has to sit down and discuss the amount of risk they are willing to take. It should always be a mutual decision. This way, you both can contribute equal amounts of money and stand a lesser chance of incurring huge debts. Poor investing is one of the biggest financial mistakes that couples make.

#5. Plan For Emergencies

Surely your life is merry and you don’t see why that will change in the coming years. However, life isn’t always mellow. Times change and the economy is volatile. So, always plan for the worst case scenario. You never know when a recession hits and you two lose your jobs. So, plan for the future. As they say, hope for the best, but prepare for the worst.

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So, there you have it. Here were a few key financial mistakes that couples make. Make sure that you manage your personal finances and never make these common financial mistakes. If you wish to add more to this, kindly use the comments’ section below to share your views and opinions.

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