Saturday, 19 February 2011 17:15
It's no secret divorces in America are a popular trend. According to the National Center for Health, about half of marriages will result in divorce, and with many families struggling to make ends meet and with the unemployment rate hovering around 10% this past year, stress and arguments over money are not uncommon.
If you and your spouse have been arguing over the finances, how can you prevent these disputes so your marriage doesn't end up in divorce? MainStreet asked relationship and financial experts to share simple tips on how to manage money peacefully in a relationship.
To reduce financial stress, first come up with a clear path toward financial success. If you constantly argue with your spouse about debt, then create a plan of action to crush it.
Joshua Duvauchelle, associate editor of Focus on the FamilyCanada, says to "talk about your financial goals, fears and shortcomings. For example, financial conflict sometimes crops up when one person doesn't think that a little credit card debt is a big problem while the other one does. The only way you'll be in mutual agreement is if you talk about it."
Be respectful and work together to dig yourselves out of your financial dilemmas; don't have a screaming match.
Organization is key to fixing your finances. Certified Public Accountant John Faggio recommends that couples "set up a common area for supporting documents where each spouse can easily see where the money has gone. Passwords or security questions should be common knowledge to both spouses."
When the bills arrive in the mail, pay them! Don't throw them in a drawer or leave them on the kitchen table where you're likely to forget about them. Keep your financial documents and bills in an easy to access area for each spouse.
*Create Money-Saving Rituals
Saving money and living frugally is a critical component to achieving most financial goals.
Patty Newbold, marriage educator at EnjoyBeingMarried.com, tells MainStreet, "There will be times you have to cut back. While you have enough, create your own low-budget traditions: camping, a walk on the beach at sunset, an inexpensive meal you both love, fixing things together or making crafts to sell."
These activities will spawn continued dialogue between you and your spouse about the importance of saving money and staying committed to your path toward financial success.
*Make a Date With Your Finances
Money isn't typically discussed on a date, but if you're serious about getting your finances on track and preventing financial arguments, consider setting up a "business meeting" between you and your spouse, as suggested by Danielle Marquis, adjunct professor of personal finance at Red Rocks Community College.
"Order takeout, get a bottle of wine and then work on some aspect of your finances together (and maybe watch a movie afterwards as a reward)," Marquis says. "In January this might be setting up a budget for the rest of the year, in February it might be tax prep, in March it might be asset allocation for investments."
*Consider Joining a Credit Union
To help bolster your finances, take advantage of the benefits credit unions offer. Savings accounts at credit unions usually offer higher interest rates than typical banks and credit cards with lower interest rates. Credit unions serve in the best interest of their members.
According to the Credit Union National Association, in 2009, lending to small businesses from banks dropped 18%, but rose 9.9% from credit unions.
Diane Tegarden, author of "Getting Out of Limbo: A Self Help Divorce Book for Women," tells MainStreet that "once you establish a relationship with your credit union, it will be easier to qualify for a loan if you need emergency funds."
Hiding debt from your spouse or lying about how you spend the family's money will only create more tension in the relationship. While a spouse might feel angered and upset if they discover the other spouse was lying about how much debt they had, it is far more beneficial to the relationship to maintain an honest and open dialogue.
"Keep no secrets. Be honest with each other about what you have spent (and on what) and disclose everything," suggests Ray Lucia, a certified financial planner.
If you notice that you and your spouse are achieving your financial goals and the arguments over money are virtually nonexistent, treat yourselves to a night out at the movies or a reasonably priced weekend vacation.
Spending quality time with your spouse will allow you to take a break from constantly thinking about and dwelling on the household finances. In the end, it's not just about excelling financially, it's also about improving your relationship with your spouse and ensuring that money problems don't destroy a marriage.
*Learn When to Discuss It
Timing is everything, so be sure you know the right time to bring up your finances with your spouse.
Duvauchelle also recommends that couples not "wait to communicate about finances when you're angry or when the bills come in. Discuss it when you're both calm. Otherwise, the underlying current of anger or the stress of a looming bill can make it counterproductive to discuss your budgets and financial settings."
*Know Your Spouse's Salary
Be honest with your spouse about exactly how much you earn. Chances are you both don't earn the same amount of money, which can cause further tension when deciding how much each spouse will contribute to bills. Instead of splitting the bills 50/50, use the same ratios, rather than equal sums of money.
For example, if you make $5,000 per month and your spouse makes $12,000 per month, then your joint income is $17,000. But if your monthly expenses amount to $4,000 per month, then divide $4,000 by $17,000, which is about 23.5%. That way both you and your spouse will contribute 23.5% of your monthly incomes to the monthly expenses, which results in different amounts. This is fair because even though you both don't earn the same amount of money, you're still contributing the same percentages to the household expenses.
*Don't Play the Blame Game
If the reason for your financial troubles is because one spouse was irresponsible with money and used the family credit cards to rack up thousands of dollars in debt, the other spouse must be supportive and not accuse each other of causing the financial mess.
Teamwork is critical and you won't escape your financial dilemmas unless both you and your spouse work together and commit to acting responsible with money. This will also result in fewer financial arguments.
(Scott Gamm is the founder of the personal finance website HelpSaveMyDollars.com.Â He has appeared on NBC's TODAY, MSNBC, Fox Business Network, Fox News, ABC News and CBS.)
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