Marriage and Money: Six Mistakes to Avoid

April 8, 2021
Written By: Michael Collins

When it comes to marriage, you want to do things right. The same thing with finances. Money doesn’t have to be a difficult topic. Here are six money mistakes you and your spouse can avoid:

Set goals. He is a spender; she is a saver. Or, he has an ever-expanding list of toys he would like to add to his collection, and she spends most of her time thinking about growing the family’s emergency fund and how she can max out their 401(k) contributions. Does that sound familiar? It is too late to have “the talk” after you have put a big purchase on your credit card. So, sit down and have a money date. Talk about your goals and write them down. Without goals, you will not know where you are headed. Share your feelings and (this is important) actively listen to the other’s viewpoint. Compromise may be needed but agreeing on common goals will allow you to move forward in a unified fashion. When you have completed this task, I am confident you will feel an enormous sense of satisfaction.

All for one and one for all. Marriage is about unity, but not the absorption of oneself into the collective whole. Our interests will not be perfectly aligned. The same can be said about handling our finances. A joint checking account and joint credit card are perfect for joint expenses, but separate accounts for separate interests are a good idea too. When you set your goals, establish boundaries regarding spending and saving patterns.

Money secrets are a no-no. It is OK not to disclose the secret handshake you learned from your college fraternity or sorority. It is not OK to keep money secrets hidden from your spouse or partner. Major secrets may be a symptom of bigger problems that can threaten the stability of your relationship. Do not destroy trust that can take years to rebuild.

Who handles the monthly bills?  It is a good idea to put as much as possible on autopay. It is not a set and forget. But you do not want to get caught flat-footed with overdue bills or late charges that may slip through the cracks and ding your credit report. Therefore, who takes care of the bills? It may make sense for one person to be in charge so there is no confusion, and regular payments are not missed. But checking in monthly or bi-monthly is a good way to keep both individuals on the same page. Check-ins also allow you to make any adjustments, as a couple, to your goals.

It is the age-old but unanswerable question. Should we go in the direction of retirement savings or college savings? Having children means putting your kids before yourself more times than you will ever be able to count.  But when it comes to saving for retirement or college for your kids, put yourself at the front of the line. Pensions are disappearing and Social Security is not enough. You must consider your retirement needs first. There are exceptions, and we can look at ways to fund both goals. But do your best to maximize retirement savings. At a minimum, capture the full amount of your company’s match. Keep this in mind: If you do not fund your retirement, who will? The burden could fall on your kids.

Stash away cash for an emergency. Did you know that just 39% of Americans have $1,000 to handle an emergency? The rest would have to use a credit card or borrow to cover an unexpected need. You may have ample reserves, but sadly, that is not the case for all Americans. If you received a stimulus check and you do not have an emergency fund, please save it.

Money is a difficult topic. I truly understand that. Treat each other with respect and actively listen when you set goals. Goals provide you with a roadmap, and they can reinforce the bond you have towards each other. If you are not sure how to get started, please reach out to us. We are here to help and get you pointed in the right direction. There is one more thing I should mention. Procrastination is the enemy. Get started today.

 

Michael Collins

Michael Collins

Senior Wealth Advisor

Senior Wealth Advisor Michael Collins is passionate about developing and refining a process that helps his clients grow, protect, and distribute their wealth in a risk and tax-efficient manner. Michael joined TCG with over 30 years of experience in financial planning.

Michael is a proud husband and father to two young men, Marcus and Mitchell. On sunny days he and his wife Becki can be found socializing and playing a round of golf on the green. The two spend time outside playing frisbee with their 2 dogs, a Rottweiler named Sasha and a Bullador named Sadie.

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