One of the biggest challenges in personal finance can be managing money with your spouse or partner. Make sure to follow these money management tips for couples.
If you don’t agree on money basics, like budgeting, spending, and saving, that can cause serious problems in your relationship. But don’t worry—if you’re fighting about money or don’t think you can ever see eye-to-eye, there are ways to settle your differences.
You can learn more about specific techniques that couples can use to improve their financial lives. Here are 5 money management tips for couples that can dramatically improve your relationship:
Tip #1: Know Your Money Personality
Understanding your “money personality” is the key to ending conflicts about finances in your relationship for good. Your money personality is the distinct way that you think about and handle money.
See if you recognize yourself in one of the following 5 money personalities:
- The Saver – Likes to pinch pennies, hates parting with money, and thinks everything is overpriced. This type likes to research purchases and rarely spends impulsively. It is found that Savers are organized and trustworthy with money.
- The Spender – Loves to buy for themselves and perhaps for other people as well and gets a thrill from making a purchase, even if it’s something inexpensive at a thrift store. Normally, Spenders live in the moment, buy on impulse, and don’t differentiate between wants and needs.
- The Risk Taker – Gets excited about possibilities and is willing to lose money for the potential financial return of an investment or business opportunity. This personality type thinks conceptually and doesn’t get hung up on the details. Risk-takers can be impatient and make decisions without consulting others.
- The Security Seeker – Likes to plan for the future so they never have to experience a financial crisis. Willing to sacrifice today so they can save, invest, and have adequate insurance to cover their needs tomorrow. Security-seekers are very conservative with money, and are never caught unprepared.
- The Flyer – Flies by the seat of their pants because they don’t like to think about money at all. They’re not motivated by money, rarely make financial plans, and are unorganized. Fliers may end up making financial decisions based on fear rather than good advice.
Each person typically has 2 of the 5 money personalities—a primary and a secondary. To get clarity about your money dynamic as a couple, you should identify your own and your partner’s money personalities.
Tip #2: Have a Money Huddle
Understanding your “money personality” is the key to ending conflicts about finances in your relationship for good.
A “money huddle” is a regular meeting you should have with your partner where you talk openly about your money relationship. This is the time to discuss how to blend your money personalities into a system that satisfies both of you. You might have a 45-minute money huddle once a month over dinner, for instance.
The purpose of a money huddle is not to crunch your budget numbers or to let tempers flare—it’s to acknowledge your money personalities, discuss how you relate to money, and decide how to move forward as a couple. You should begin your financial conversation with the END in mind, which is an acronym for how to structure your money huddle:
END >> E = Evaluate N = Needs D = Dream
I’ll explain each of these in the last 3 tips.
Tip #3: Evaluate Your Financial Situation
You should spend the first 15 minutes of your money huddle evaluating your debt and savings. Quickly review each of the debts you have, such as credit cards, mortgages, and auto loans. Know the balance due on each debt and the interest rate you’re paying. Next, review how much you have in savings and investments, like retirement accounts, brokerage accounts, and bank accounts. Remember that this is just an overview, so don’t let it consume your entire discussion.
Tip #4: Discuss Your Money Needs
The money huddle should be spent by discussing one of your most pressing money needs. You might want to save for a vacation, increase contributions to a retirement account, purchase life insurance, or buy a new toy. Listen to what your partner has to say and set a date for when you could research both of your items, take action, and meet your needs. It is easier to discuss and record these money management tips for couples as appose to not.
Tip #5: Remember Your Dreams
Take the last part of your money huddle to remember the dreams you and your partner had earlier in your relationship. Think about what you really want your future to look like. Do you want to buy a home? Have a cushy retirement account? Move? Start a business? Whatever it is, starting a dialog about it is the first step to making it happen.
More Money Management tips for Couples
Knowing your money personalities, and having regular money huddles that begin with the END in mind, is key to successful money management for couples .