5 Financial problems in marriage and how to avoid them

It’s not surprising that the leading cause of stress in married couples is directly attributed to money issues. In fact, nearly 41 percent of divorced Gen X couples cite financial disagreements as their cause for separation.   

Learn the best financial advice for newlyweds and married couples. With careful planning and smart decision-making, you’ll achieve a happy, financially successful marriage. Here’s how to avoid 5 of the biggest financial money and marriage problems that couples face:

Avoiding the topic

Keeping your spending and financial habits secret from one another is a sure-fire way to strain your marriage. Some people spend thousands of dollars on discretionary spending a month, while others become spend thrifts to pay off debt faster. Discussing finances and managing debt together is essential for a happy marriage, regardless of your spending and saving habits. Communication is key to financial harmony. 

Solution: Talk about money 

So how can a couple communicate effectively? Carve some time out with your partner for a judgement- and criticism-free discussion and do it regularly.  

People have various spending habits and priorities, so partners should communicate clearly and be willing to compromise with each other. Be honest, and work through differences with your partner. Allow mistakes to happen from time-to-time because old habits are hard to break.

Not saving for the unexpected

How many times in your life has something popped-up unexpectedly that cost you $1,000 or more? Add kids and pets to the picture and the list of potential financial disasters increases. After a stressful event, the last thing you want to fight with your spouse about is more debt. 

Solution: Build an emergency savings fund 

Plan for the unexpected and create a sizable emergency fund according to both of your specific needs. Take into consideration your family’s health concerns and condition, job security, vehicle condition, etc. A separate joint high-yield savings account is perfect since it allows you to sock some cash away with great returns. When life throws you an unexpected curveball, you can relax knowing that you’re in good shape to pay the bills.

Not allocating your finances appropriately

Don’t be one of those couples who forgot to pay their bills because they thought the other person was doing it. 

Solution: Open a joint account and set up automatic payments 

Open a joint checking account and set up automatic payments for household expenses. This includes the mortgage, car loans, and monthly utility bills. Allocate bigger expenses like vacations, or your dream kitchen into a joint high-yield savings account.  

Lastly, you should put what’s left into your respective personal accounts. You could appoint a family “CFO” to manage your joint accounts to pay your bills online. This method is useful because it combines your money equitably. You can also spend or save the rest without feeling guilty or judged. 

If one partner earns more, compare your salaries and decide on a fixed amount each should contribute to the joint account. For example, if you earn $80,000 and your spouse earns $50,000, the ratio is 62.5 percent-to-37.5 percent. This ratio should change as incomes change.

Not having a budget

Unless you’ve won the lottery, you need a budget for all of your spending. Even then, you’d still be better off with a budget!  

Eyeing that pricey Smart TV but not sure if you can afford it? Many people buy things without thinking. They say to themselves, “It’s fine, I’ll use my credit card, ” without considering if they can afford it. When financial stresses start creeping in, the blame game between the two partners begins. 

Solution: Track where you spend money 

“Honey, we’ve already dined out too many times this week!” People often find it difficult to follow budgets when they involve too many restrictions. Start small by tracking your expenses without setting any restrictions on your spending. Then in a couple of weeks, review your tracking spreadsheet to identify areas for improvement.  

Start by changing your habits little-by-little. For example, swap a few take-out meals for a date night in, opting to cook together. Little changes in habits can bring you closer together and save you money!  

Not having a financial plan

It’s never too early to talk about your long-term retirement and savings goals. Talking about your financial goals for retirement should be fun! Share your dreams. Maybe you want to spend your days on a speedboat in the Caribbean. Or perhaps you want to fish in the wilderness until sunset.  

Setting these goals is closely linked with creating a budget. This helps you understand how much money you need to live and enjoy your life. Being aimless with your savings means spending unnecessarily and out of budget. When that happens, you’re much more likely to run into financial problems. 

Solution: Seek counsel from an accountant and financial advisor 

Speak with an accountant or financial advisor about your tax advantages and liabilities. Married couples have different tax circumstances that could cost or save you money. If you’re not ready for either of the two, a good rule of thumb is to start by saving at least 10% of your income. Set your balance transfers to automate your savings into a joint  High-yield Savings Account or Individual Retirement Account. 

Whichever way you decide to manage your finances, it’s already a good start that you’re here reading this blog. Remember, your parents could also be your best source of financial advice and wisdom, reach out! Communication is key! We hope these tips are helpful to have a financially happy marriage. 

This article has been provided for educational purposes only and is not intended to replace the advice of a loan representative or financial advisor. Empeople does not provide tax advice. The examples provided within the article are for example only and may not apply to your situation. Since every situation is different, we recommend speaking to a loan representative or financial advisor regarding your specific needs. You may also want to contact your tax advisor for additional tax information.