Marriage and Finances: How my Husband and I make it Work for Us and Not Against Us
By Francine Lai
Money is the No. 1 reason couples fight so it’s no surprise that money-related issues are frequently cited as a reason for divorce. Money and stress very often go hand in hand, whether it’s because of an overextended budget, an unexpected financial emergency, or even the discovery of your spouse’s secret credit card.
A few of my clients have asked me how my husband and I deal with our finances and I thought it would be helpful to write it down! Below are 10 money-related activities that we have done and continue to do periodically. Please keep in mind that every family should develop a system that works for their household. Just to give you a little context, we are a dual-income family with an 18-month-old daughter and a giant golden retriever.
1. We are and have always been very transparent with each other about money-related issues. THIS IS CRUCIAL!
2. At least once a year, we discuss financial goals and priorities to make sure we are on the same page so we know where our savings should be allocated. If we have new goals or have differing goals, we have an open conversation about them and talk about their importance to each of us. Then, we compromise and meet in the middle.
3. At the end of the year, we total up how much we saved in our retirement accounts, investment accounts, 529 college account and make a goal to save even more the following year.
4. We review our budget every 6 months. We itemize our monthly expenses as: housing, car, childcare for our daughter and dog, entertainment, grocery, dining out, amazon purchases, etc.
5. We assess and track our net worth every 6 months. This includes updating our assets (investment accounts, bank accounts) and liabilities.
6. We keep a certain amount in our personal bank accounts and have a few investments accounts for specific goals. We know how much we each keep as our safety net in bank accounts and everything above and beyond that amount gets added to various investment accounts (joint investment account, 529 plan)
7. If one of us is thinking about purchasing a big-ticket item, we run it by the other person to make sure he/she is okay with it.
8. Individually, we are responsible for paying off our own credit cards once or twice a month to keep our credit scores high to make sure our actions positively affect the other person.
9. Dividing monthly expenses: in our household, I typically pay for childcare for our daughter and dog, my car expenses, my cellphone, wellness, and miscellaneous purchases. My husband pays when we eat out, groceries, entertainment and travel costs, his cellphone and housing expenses. We pay the mortgage and property taxes from our joint account.
10. We enlist the help of other professionals in talking things through and guiding us to help make the right decision. It is OK to ask for help, especially from an unbiased third party.
Marriage can be hard enough on a daily basis! Having a child, though is extremely rewarding, it can complicate marriage life even more. The last thing you need looming over your head is uncertainty about your spouse’s financial situation and not having a proper long-term financial plan for your family. It is in your control. One of the most important aspects of maintaining harmony in a marriage is the use of good and proper communication. Be honest with each other and talk to one another with an open mind and mutual respect. If you find it hard to initiate the “money” conversation, call your advisor and schedule an appointment with your spouse to open this dialogue. We’re always here to help.
Securities offered through LPL Financial, Member FINRA (http://www.finra.org/)/SIPC (https://www.sipc.org/). Investment advice offered through Gerber Kawasaki Inc, a registered investment advisor. Gerber Kawasaki and Gerber Kawasaki Wealth and Investment Management are separate entities from LPL Financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures the success or protects against loss.
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