Wednesday, November 14, 2012

6 Things That Cause Couples To Fight About Money

If you and your “honey bunny” are like most couples, chances are, you argue about money sometimes. Hopefully not ALL the time! Many studies have shown that money fights are a leading cause of divorce. Here is what sparks the six most common types of arguments:

1.) Marrying Your Money. Should you merge everything you have into one joint account, or should you maintain individual accounts and open a joint one for household expenses? Many couples find that the ideal solution is some sort of blended system. They share a joint account for household finances, but each has a personal account to do with as they please. With this hybrid approach, the real decision is about how to divide the household income.
  • If you and your partner make roughly the same amount, you could contribute equally to the joint account, and then keep what’s left over in your personal accounts.
  • Some couples use a proportional system: If one partner earns 2/3's of the household income, then they contribute 2/3's to the joint account. After funding the joint account, the partners can do whatever they want with the leftovers.
  • A final option is to use the “adult allowance” system. In this case, both spouses put their entire paycheck into the joint account, and then withdraw a fixed amount into their personal accounts every month.
What’s most important is honesty and communication. Any system in which spouses are open about their money habits is a good one

2.) Dealing With Debt. Whenever debt enters the relationship, it’s good to remember that no one is perfect. The debt is not a way to keep a “scorecard” in the relationship. People in mature relationships accept that solving the debt as a team not only strengthens the relationship, but helps reduce the debt more quickly.

3.) Overspending. In many relationships, one gets labeled the “saver” and the other gets labeled the “spender.” Labels and categories never serve to make you feel closer to your spouse. They key here is to remember that you’re simply trying to avoid surprises, which a budget goes a long way toward fixing. You must both agree on how your money will be spent or you'll be in more money arguments than you can count.

4.) Bone Head Investments. Various studies show that men are more willing to take financial risk than women. It's far too common for a husband to make a poor investment decision which starts a marriage towards deterioration. However, investments are a secondary argument. The biggest issue is achieving agreement and understanding of how specific investments will be made based on your goals. Once a discussion of goals and time frames are clarified for different accounts and sums of money, it becomes much easier for couples to align themselves with common goals and objectives.

5.) Money Secrets. Let’s face it… Most of us have trouble not lying to ourselves, let alone other people. Lies about what we ate, what we spent. This is one of the fundamental challenges of a relationship, to be vulnerable and transparent in all areas (and not letting your own guilt and money secrets come to such a point they damage you and the people around you). Each must keep in mind that most relationships aren’t destroyed by one dramatic act, but a series of small, even individually inconsequential acts that chip away at your foundation of love and trust.

6.) Cash Reserves. Just like couples vary on the degree of risk they are willing to take, they also vary on the level of reserves they need to feel safe. Once a budget is clarified, issues of cash reserve savings become secondary. Discuss it, make a decision about it, then don't dip into it behind the others back.

With honesty, open communication and a willingness to look at your finances objectively, couples can avoid the top money arguments.

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