Get the Spark Back!
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Get the Spark Back!

Feb 5, 2018, 08:50 AM by Krista Olson
Healthy Finances Make for Happy Couples
This is one of my favorite blog posts from last year, so much so, I decided to run it again.  I've got bonus coverage on the topic too, a video from the Steve Harvey show that covers the same topic: https://goo.gl/FjSiuq

I “love” Valentine’s Day…pardon the pun. It’s the perfect reminder of what being a couple is all about. A day dedicated to rekindling the spark that brought my husband and I together. Trust me, with two growing young boys to contend with, we could use a spark or two!

It’s been said money matters are the #1 source of strife in couples and divorce in marriages. If this describes your situation, maybe the quickest route to romance is to treat each other to a “Money Talk”.  It might just transform your relationship.

Whether you are married, engaged, or just in a serious relationship, talking about money and finances is not easy to do, especially among the millennials. A recent poll from the American Institute of CPAs and the Ad Council found couple ages 25 to 34 only 42% have discussed their financial goals.  Yet, 88% stated financial decisions are a source of tension in their relationship.

To help you avoid financial issues as a couple, I put together these suggestions on money management.

Create a Financial Plan of Action Together
Many couples dread discussing finances; however it is very important to come clean about your financial situation so that you and your partner can devise a financial plan of action together.  Like most aspects of a relationship, communication is the key.

Your views are going to be different, so understanding each other and respecting those differences will allow for healthy conversations.  It is a good idea to approach family finances like running a business, this will help you become more strategic about money decisions and less emotional.

Set aside time each month to go over the household budget and re-evaluate your financial situation making adjustments to malign with your financial goals.  By working as a team not only will you become stronger financially you will also have a stronger relationship bond.

Merge or Not to Merge Financial Accounts?
One of the biggest questions couples face is whether or not to merge financial accounts or set up individual accounts.  The truth of the matter is it comes down to preference and t trial and error to determine the best way to manage your money.  

That being said, according to Forbes, allowing your partner to keep a separate personal account actually shows trust in them to not keep financial secrets and contribute responsibly to the family financial plan.  Also, your own personal account gives you the feeling of having more control over some money building confidence.  

The strategy that seems to work well for a lot of couples is to have one pooled checking account and each partner keeps a separate account for other individual expenses.  The joint checking account is used for shared expenses such as groceries, house payment or rent, and other living expenses.  Each person will contribute monthly to the account.  I suggest basing the contributions off percentages your monthly income instead of splitting it 50/50. After deciding how much you will contribute, set up an automatic deposit into the joint checking each month. This strategy will help with overall household budgeting as it forces you to review how much you expect to spend each month.

Dealing with Debt
When it comes to money management, one of the places couples disagree the most is how to deal with debt.  In many situations one partner will have more debt than the other.  Instead of looking at it as “your” debt, you have to start looking at it as “our” debt.  Once you do that you can decide how you are going to go about paying it off together.  

Saving Together
As with monthly household expenses, you should also set up a joint savings account for emergency expenses.  You never know when the unexpected might happen, be it illness, job loss or accident. By having an emergency stash available if needed can greatly reduce your stress and help out in a time of need.

Besides the emergency fund you also should set up a joint savings account for long and short-term goals you might have, such as buying a new car, going on a vacation and saving for retirement.  Designate how much each person will contribute each month to the savings account and make sure to set up automatic deposit, this will get you in the habit of paying yourself first!

Creating that Spark
Money issues are the trickiest part of a relationship, but if you are open and honest with each other, and work as a team to reach your goals financial then family success is not far behind. And now that the stress work is done – you’ll have more time to create that spark in your relationship.  Happy Valentine’s Day – I hope you find romance this year!