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By Joshua Goodwin
Money has caused
headaches for countless people. Never is that more true than in
marriages. In fact, more marriages collapse over financial problems
than for any other reason. The interesting thing is that very few
people divorce their partner because of a lack of money, but rather
from disagreements over how to manage the finances that they do
have.
Financial
incompatibility often is the result of radically different
approaches that people have towards money. Although psychologists
have many different groups that they like to categorize people into,
for financial purposes most people fall within one of two
categories: savers and spenders. You probably already know which
type of person you are and usually you perceive your spouse as being
in the opposite category. This is because opposites attract and is
not always a bad thing!
Savers are often
attracted to spenders because they see them as generous, fun-loving,
adventurous folks. Spenders are attracted to savers because they
think of them as grounded, fiscally responsible individuals. Having
both a saver and a spender in a marital partnership can help achieve
a good balance. Savers can end up living a miserable existence
because they can’t bear to part with any of their money. Spenders
can get so deep in debt that they can’t enjoy the things they spent
the money on in the first place. There has to be a balance achieved
between the two. Savers have to realize that financial security
doesn't demand stashing money in the bank to the exclusion of
everything else. Spenders have to realize they can’t just buy
anything and everything that they take a fancy to. So don’t despair
if your partner has a different financial outlook on life than you.
God put you together for a reason!
So what makes one
person a free spending spirit and another a frugal saver? In most
cases, people simply follow the example of their parents.
Financially irresponsible individuals have probably grown up
watching their parents make the wrong decisions as well. They simply
never learned how to do things the right way. However, regardless of
the type of person you are there are some actions you can take to
help you get your financial house in order:
Develop a budget
A budget is a good
first step in defining financial limits and long-term goals. A
detailed budget forces you to balance income with expenses, while
allowing you to make adjustments as needed. Constructing a budget
should accommodate the needs of both partners, even if one is a
spender and the other a saver.
Set long-term
goals
Couples often
spend more time planning their family vacation than they do
discussing their long-term financial goals. So you first need to
sit down and agree on your big-picture goals – things like saving up
for a down payment on a house, funding a retirement account, or
paying off the mortgage ahead of schedule, etc. Then set up a
schedule to achieve those goals.
Share decision
making
Develop guidelines
for making major purchases, starting with how you decide what to buy
and when. Going out and buying a big-ticket item without your
partner's knowledge or consent is definitely a recipe for disaster:
Decisions on major items should be arrived at jointly – where to go
for vacation, what type of new car to buy, etc.
Live on one
paycheck
In 2005, 51% of
families had both the husband and wife employed outside of the
home. However, even with two-incomes many
of these couples live paycheck to paycheck with total disregard for
the future. Taking this approach can be the beginning of future
money problems that can strain your marriage. Saving one of your
paychecks can help build-up a nice down payment for a house or the
expense of having children or just an emergency fund.
You may not always have that second paycheck coming in. So even
if you have two incomes, try to get by on only one paycheck and save
the other.
Create a wish list
Both you and your
spouse should sit down and create a wish list of things they would
like to do or have. These items could be regularly occurring (going
out to eat once a week) or they could just be one-time events
(vacation to Europe). The challenge for the spender is to realize
that they can't immediately have everything on the list. On the
other hand, a saver shouldn't try to force a bare-bones existence on
a spender. There should be items on your list that you can
compromise on and there should be others that are joint goals that
you both want. This is a long-term list and some things you may not
be able to achieve for several years, but it will at least give you
something to work towards. An additional benefit is that it helps
you understand what is important to your partner and what they value
the most. You may be surprised that some things that don’t cost
that much are actually valued very highly by your spouse.
Have the spender
pay the bills
If one person
tends to be the spender in the family – have them pay the bills each
month. This way they get a better understanding of how much money
is going out each month compared to the income you have coming in to
pay those expenses. It’s easier to spend money when you never have
to worry with how those expenses are paid. If you are the one
having paying the bills and you know there isn’t any money in the
bank account, hopefully that will be a deterrent for you not to
spend the money in the first place.
Set priorities
Spending time with
your family should always take priority over trying to earn more
money. Nothing can strain a marriage more than having one party
always working late into the evening or working weekends just
because they want to have more money. Having a higher standard of
living isn’t just measured in by the size of your bank account.
Spending
allowances
It might be wise
to set aside some money each month to feed the spender's need to
burn cash. The amount should be budgeted, but there would be no need
to keep track of where the money goes. This satisfies the saver by
keeping the spending within limits and gives the spender some “free”
money that they can use on anything they want.
Grow Up
There's a message in your quickly evaporating
checking account balance - you're not a kid anymore! You've got to
begin thinking about things like a mortgage, insurance, saving for
college, retirement, etc. No longer can you afford to buy anything
that you take a fancy to. Your responsibilities have to take
priority over your wants.
Start Saving
It seems that few
people these days actually save any of the money they earn. In
fact, beginning in 2005 and continuing into 2006 the U.S. personal
savings rate has actually been a negative amount. So collectively,
we are spending more money than we earn. This is a very disturbing
trend, because just 20 years ago people were saving more than 10% of
their income. It's never a good idea to spend every dollar that you
make. Set a reasonable savings goal each month and stick to it, even
if it's only $100 per month. You can even set up automatic deposits
from your paycheck.
 
In conclusion, you
and your spouse have many decisions to make, which means plenty of
opportunity to disagree with each other. How you’re going to handle
your finances is one of those key decisions that you can’t afford to
just avoid. The simple truth is that money issues are with us every
day. If you aren't in financial sync, your marriage could be in deep
trouble. Harmony in financial matters can help lead to harmony in
other aspects of the marriage.
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