holding hands

Relationships in some regards are a lot like your own personal finances. Personal relationships take a great deal of work, planning, communication, understanding, goal setting, deposits and withdrawals. Personal finances require the exact same amount of work, planning, understanding, goal setting, deposits and withdrawals. The two are inexplicably linked in many ways and if one encounters some sort of difficulty the other will be adversely affected. Here are a few ways you can manage your money and your relationships and help the two grow strongly together.

GOAL SETTING: Where will you be in 5 or 10 years? This is a perfect conversation starter for you and your partner. The beauty of this question is money management can easily be associated with relationship goals. Your partner may not be happy with his or her current job and has dreams of opening their own business or going back to school. Together you can discuss what steps need to be taken to accommodate each others desires and not sink the financial boat. If you keep this line of discussion open you can set realistic goals in money and in life.

 

COMMUNICATION: This is probably the most fundamental requirement for any good relationship. Because many fights are over money it is important to keep that an open line for communication in everything else so that talking about money comes naturally. This means that any major purchase should be thoroughly discussed. Imagine how upset you would be if your partner came home one day with a $1500 flat screen T.V. or a $1500 dress or $1500 in penny stocks. If you communicate well about money, that is one less thing that may result in disagreement. Communication is key in relationships and in financial planning as well.    

JOINT ACCOUNT: The age old question. Some feel that having a joint savings account is important because it displays an element of trust. Others feel that it is important to keep the personal finances separate from the relationship because of the freedom it creates. The problem is it can cause disruptions in the relationship. Why not have both? First you need to discover what your expenses are and what is left over for pleasure. In my opinion a simple formula to follow is each of you takes 20% from the paycheck every week to deposit into a personal account. That money is yours and yours alone. You can use it to buy a fancy pair of shoes, football tickets or whatever you desire. The remaining 80% is put into a joint account that covers living expenses such as food, mortgage, retirement planning, car payments etc..  That way if you choose to treat yourself, you are using your money to do so.

STAY ON THE SAME PAGE: This is extremely important. Stay informed. One of you may know a lot more about personal finances. There is nothing more exciting in a relationship then learning together and understanding the same things. If you both know where the money is going, how it is being invested and what investments to make there will always be an understanding. There is nothing more heartbreaking than when one person makes a solo decision and loses out. If you constantly inform each other of financial opportunities and financial decisions it will be harder to make avoidable mistakes. As the saying goes, two minds are better than one.

 Relationships are always a work in progress. It is inevitable that you will encounter problems and not see eye to eye with your partner about everything. Finances are one conflict that can easily be avoided with an open line of communication, goal setting, planning and understanding. If you and your partner can talk honestly about money and have the right plan in place, your relationship with each other and with money will grow stronger and stronger every day.

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