Published on August 26, 2021
Written by The Servion Financial Advisors Team
“Being willing to share your financial picture with another person helps build trust,” according to Mandi Woodruff, chief consumer advocate at Ally. Talking about money is the first step to financial planning as a couple. It can be uncomfortable – most Americans are taught not to talk about money – but you need to understand each others’ financial position so you can build a stable budget.
The money conversation shouldn’t be just a one-time thing. Set up regular “dates” where you discuss finances, see how you’re progressing toward your goals, and then make any adjustments. Talking steadily helps normalize the money conversation and helps avoid surprises.
Both of you should track your spending for several months in a row. This helps you understand where your money goes. You can then find areas to cut back on, if necessary, and then create a real budget that you can stick to.
There are three common approaches to budgeting as a couple:
You might consider, for example, splitting expenses 50/50 if your salaries are about equal, but if one earns a lot more then perhaps that partner would pay a larger percentage.
You and your partner will have some shared savings goals, like a wedding or buying a house. You’ll also each have individual goals – maybe one wants to save for a vacation but the other would rather buy a car. You can have different goals, just make sure you’re honest about them and then document your spending and savings habits as you work toward them.
Visit the Servion Financial Advisors website for more tips.
Many couples benefit from consulting with a professional financial advisor. A good advisor can help each person talk through their goals, find common ground, discuss differences and eventually work out a realistic savings plan. Servion Financial Advisors helps people in this regard, as do advisors in your local area.
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