Ten Ways Couples Can Avoid Money Problems | Stewardship Concepts Financial Advisors

Money is a well-known source of tension in relationships. Financial issues can strain couples significantly, often surpassing common stress causes, such as annoying habits. According to a study by SunTrust, finances are the leading reason for relationship stress. They're also responsible for 22% of divorces, making money the third most common cause of divorce, as the Institute for Divorce Financial Analysis reports. While this may sound disheartening for married couples, there are steps you can take to prevent money from undermining your relationship. Whether preparing to say "I do" or working through financial challenges, the following ten tips can help safeguard your relationship.

1. Avoid Trying to Time the Market

Attempting to time the stock market often leads to missed investment opportunities. Letting emotions dictate your investments is a common and damaging mistake. Fear-driven decisions to sell investments and switch to cash can result in significant losses.

Strategy: To avoid this pitfall, assess your insurance needs and ensure appropriate coverage. Consult with an insurance professional to determine the suitable types and amounts of coverage for your specific situation.

2. Prioritize Open Communication

Failing to discuss financial matters openly is a major mistake that can lead to misunderstandings, conflicting goals, and financial stress. Discussing financial goals, concerns, and expectations is crucial to aligning your visions and making joint decisions.

Strategy: Dedicate time to financial discussions, create a budget, and set shared financial goals. Consider scheduling regular money meetings to track progress, discuss upcoming expenses, and make necessary adjustments.

A couples handles crunching the numbers on their budget

3. Build an Emergency Fund

Neglecting to establish an emergency fund can leave couples vulnerable to unexpected expenses or job loss. Relying solely on credit cards or loans can lead to long-term debt and financial instability.

Strategy: Aim to save at least three to six months' living expenses in an easily accessible emergency fund. Start by setting aside a small portion of each paycheck and gradually build it up over time.

4. Tackle Excessive Debt

Accumulating excessive debt, like credit card debt or personal loans, can strain your financial health, limit your ability to save, and lead to high-interest payments.

Strategy: Prioritize paying off high-interest debt by allocating extra funds toward those balances. Consider consolidating debts or negotiating lower interest rates. Create a plan to minimize new debt and focus on living within your means.

5. Avoid Financial Infidelity

Hiding financial information or making major financial decisions without consulting your spouse can lead to trust issues and disrupt your financial stability.

Strategy: Practice financial transparency and honesty. Regularly review financial statements, share information about income, expenses, and debts, and make major financial decisions as a team.

6. Plan for Retirement

Remembering retirement planning can ensure your financial future is maintained. Consider the long-term implications of your financial decisions and take steps to secure your retirement.

Strategy: Start saving for retirement early and take advantage of employer-sponsored retirement plans like 401(k)s or individual retirement accounts (IRAs). Regularly review and adjust your retirement plan as circumstances change.

7. Protect Against Risks

Not having adequate insurance coverage, such as health insurance, life insurance, or disability insurance, can leave couples financially vulnerable to unexpected illness, injury, or death.

Strategy: Assess your insurance needs and ensure you have appropriate coverage. Consult with an insurance professional to determine the suitable types and amounts of coverage for your specific situation.

8. Understand Your Partner's Money Mindset and Compromise

Strategy: Treat your spouse as you would want them to treat you. Avoid using negative language or contemptuous labels when discussing financial disagreements.

A couple sitting at a table, frustrated with their budget

9. Set Financial Goals Together and Reassess Them

Keeping secrets about money can lead to marital problems. Instead of defending purchases, consider having separate budgets for discretionary spending. Include a "fun money" line item in your family budget that allows each spouse to spend as they choose.

Strategy: Meet once a year to discuss your financial goals, ensuring they are aligned. This is especially important when one spouse needs to earn an income. Ensure both partners have the same financial goals to prevent resentment and guilt.

10. Ask for help: Financial arguments are taking a toll on your marriage, and there isn't any ground being made on a resolution. It could be time to have outside help. A third party can bring a new perspective to help each person understand their origin.

Strategy: Seek the assistance of a third party, such as a financial planner, a church ministry, or a couple's therapist. Financial therapy is a growing field dedicated to helping couples navigate financial turmoil. Set a time to meet with one of our Spokane financial advisors today.

Please feel free to discuss money matters before it's too late. While these conversations may be challenging, addressing them with your partner can strengthen your relationship and set your finances on the path to success. Making a small change today will impact your life and your future generation in a significant way.