Budget Special: Husband, wife and money

MARRIAGE BOND: If the partners have financial like-mindedness then the relationship can be enjoyable.

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Keywords: Partners, Relationship

Money is an integral part of our lives. Based on our circumstances, our experiences, our education etc., we develop certain attitudes and perceptions about money.

Some of us may be reckless spenders and some too stingy. Some may be good investors and some not so good. Some may be highly money minded and some least concerned about it. Some of these perceptions may be good and some wrong.

And, money is also an important parameter in our relationship with our spouse, apart from the other aspects in life. Therefore, the attitudes and perceptions that both partners have about money, play a very significant role in how the ‘financial relationship’ between them pans out.

If the partners have ‘financial like-mindedness’ then this relationship can be very enjoyable. Else one can have a potent source of conflict, which can wreck relationships.

Therefore, just as with other issues, the partners need to ‘work’ on developing a healthy financial relationship.

Understand your partner’s financial behaviour

Have you given a serious thought to your spouse’s outlook towards money? To his/her feelings, beliefs and attitudes? Or tried to understand the motivations and apprehensions behind his/her financial behaviour? In 8 out of 10 cases the answer would be ‘No’.

Therefore to start with, think - Is your spouse comfortable with money or is insecure about it? Is he/she a spendthrift or a miser? Does he/she keep detailed accounts or is careless about money? What are the saving patterns? Etc.

Having mapped your spouse’s financial conduct, match it with yours. And you shall have a fairly clear idea of the areas where you both generally tend to agree as also the points of differences. This becomes the starting point to developing a healthy and positive financial relationship with your partner.

Talk about money

Have an open and honest discussion. Express clearly your thoughts and perceptions about money. Listen patiently and objectively to your spouse’s beliefs, concerns, ideas.

Both need to appreciate each other’s good points about the financial behaviour, while the shortcomings & concerns should be handled maturely. The strong points should be strengthened and the differences ironed out.

It is the lack of communication, which usually aggravates the differences of opinion and can later lead to some serious problems. High-value purchases, important financial decisions, large investments etc. should be a joint effort. Consulting each other is necessary. Taking such decisions unilaterally can seriously undermine the relationship.

Budgeting and investing

Having understood each other’s financial outlook, we now need to go down to the actual business.

The first step is to jointly evaluate your financial situation – the incomes, the expenses, the liabilities, the assets etc.

Next, work out the financial plan

* How much you can allocate for household expenses? How will it be financed? Will you pool your incomes or keep it separate?

* What are the long-term goals – house, car, children’s education? What amount should be invested? Where? For what period?

* How much money should be kept aside for emergencies?

* What should be the retirement plan?