Money, Health and Romantic Relationships

March 28, 2011 - PRLog -- The 5 Key Steps to Healthy Finances in Your Relationship

You cannot have a great relationship until you can communicate and agree about money. If you have ever been in a relationship for very long, especially if you were married or living together, it can almost be guaranteed that you have had an argument over money. One of the biggest causes of problems in relationships is differences in values, goals and habits when it comes to money and especially communication about money issues. Therefore, it is important to learn how to talk about money and learn to align your financial goals. If you can do those two things, you have done more than most couples and you have done a lot to keep your relationship on a solid foundation.

1.  Sit down and talk about financial goals and values. Many couples neglect this step, even when it seems obvious and common-sensical. Because talking about finances can be uncomfortable, they leave these important things unsaid and often do not think about them individually. We all have goals and values when it comes to money that are not examined. That is a recipe for disaster. One partner might want to be frugal in order to save for future goals, while the other might like to spend and enjoy things now. The differences often come from different upbringings and they can be emotionally charged. Talking about finances does not have to be difficult, though. Tell your partner you would like to sit down and have a talk about the future- what your goals are and how you can work together, as a team, to achieve them. In the beginning, just start enumerating the different things each of you wants; a house, children, college education for the kids, a healthy emergency fund, travel each year, nice clothes, gadgets and computers, etc. Then begin to prioritize and see if you can come up with things in common. If you want different things, it is important that you talk about why and consider the other person’s desires. If that is what makes the other person content, you should want to make them content. That is the basis of a good relationship. However, relationships are not one-sided, so you should be able to be content as well. The point is that both sides should be considered, and you should look for a win-win solution or compromise that you can both feel satisfied with. It might take a few meetings to get to actual written goals, with a timeframe for each, but that is where you ultimately want to be.

2. Remove emotions from financial talk. From your first meetings about financial goals to your subsequent weekly talks, it is important that the two of you stay calm and steady, do not get hurt or angry over any of the issues and try to look at these issues objectively. Often financial issues are tied up in all kinds of emotional issues, stemming from childhood, from issues of security to feeling like your way is better to feeling hurt if your way of spending is criticized in any way, and much more. These emotional issues are tangled together with financial issues. It is important that you untangle them and just deal with financial goals and habits. First, do not use emotional, accusatory, or inflammatory language. Do not blame the other person or even be negatively critical. Simply talk about your financial goals, developing a plan for getting to those goals, developing a system for dealing with finances, and so forth. Also try not to feel like you are under attack if the other person talks about your goals or habits — let this be an open discussion. If you feel under attack, stop and take a breath and remember that this is not a discussion about you personally but about how the two of you are going to meet your goals- together. Again, think of this as a team effort and not as a you-vs-me effort.

3. Come up with a plan to meet your goals. Once you are able to come up with common financial goals (a huge step — celebrate!), you need a plan to get you there. This will take into account your joint income, debt, savings, how much you can put towards debt and/or savings each month, whether you want to cut back on certain things in order to meet your savings goals, how long you want to give yourself to meet financial goals and so forth. Start by having a definite timeframe for each goal and then figure out how much you need to save (or pay towards debt) each month to get to your goals. Create a spending plan (if you have not done so yet) for each month and see if you can adjust it to meet that monthly goal. You need to cut back on some things or earn extra income or both. You might discover that your goals are not realistic and you need to cut back, reprioritize, or push them back a bit in order to meet them. This plan to meet your goals is how you will align your daily and monthly spending with your long-term goals. It is also a great way to resolve minor short-term disputes (i.e. you should definitely buy fewer shoes and I should buy fewer  iPods, iPads, and iPhones, so we can buy that house in four years and travel to Europe in two years).

4. Develop a system for finances that works for both of you. In order to put your financial plan into action, you will need to figure out how you are going to pay your bills, pay debt, deposit into savings, have money for various spending needs, and so forth. Someone will have to take responsibility for each part of the system. It is better if you are both involved but you should find what works best for you as a couple. For example, one person might go to the bank while the other updates your financial program (like Quicken or Money) or your check book to make sure you are in balance.

The following are other steps in creating a financial system as a couple:

Separate Bank Accounts
It is a good idea to get a separate bank account for the both of you to put spending money into those different accounts each month. It will help to eliminate most of those big arguments between the two of you regarding who might of spent more money than each other each month.

Joint Checking Account
Keep money into the joint checking account for the household expenses each month. You should have enough money in there to pay everything with a little extra money left over at the end of each month if you budget the money properly.

Savings Account
A savings account is needed for those months that you want to take a vacation or need to repair your car or something else. A savings account will help reduce the stress level by keeping some money in a savings account for any emergency or vacation. You will have something to fall back onto if you accidentally overspend on some months.

5. Have monthly financial meetings. This is very important and it is a step that many couples overlook. Just because you have common financial goal and a system does not mean that everything is moving according to plan. If one person takes responsibility for the finances, for example, and the other is out of the loop, there will likely be problems down the road. To prevent problems like this, have a monthly meeting where you sit down and talk about finances. You can review your accounts, your spending plan, what is coming up in the next few weeks that you will need to budget for, any problem areas, what to do with your annual bonus, where you are with your goals, and so on. Make sure you are both caught up on everything and that you are working well as a team.

Above all, stay positive and be honest.  Remember that you are a team. You have the same goals and you want each other to be happy. Team members can help each other out and encourage each other, or they can tear the team apart by being negative, by blaming, undermining and by working against common goals. If you always keep the lines of communication open and stay positive, you will succeed as a team.

Be encouraging, stay focused on solutions not blame and make sure love is the foundation of everything you do.

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