Recently my wife and I celebrated our wedding anniversary. Another year to be thankful for who I’m married to and the wonderful family that we have. For a marriage to thrive, there has to be give and take and a great deal of teamwork. I got to thinking about the importance of teamwork when it comes to household finances. After seeing some other people’s failures and successes, here are a few suggestions.
Get On The Same Page
Talk about financial goals with your significant other. How much do you want to save per month for retirement? Do you have enough in the emergency fund? Review the monthly budget if you have one and find out areas that you can improve. Celebrate your successes. Envision together what life will be like 20-30 years down the road. Are you saving enough for that retirement lake house? Maybe you would rather stay in your home area and just retire at a young age. It is important to talk about these things so you can work together in unison.
I’m incredibly fortunate that my wife is thrifty and believes in keeping costs down when possible. She doesn’t need to spend $100 per month on her hair or have to buy new clothes every other week. In turn, I try not to spend foolishly on electronics and gadgets that turn into junk after a year. Since we both work we are able to save a good percentage for our retirement and our son’s college plan. This would obviously not work out as well if one or both of us were excessive spenders. We pull the rope together instead of ‘tug of war’ against each other.
Joint Bank Accounts
I’m a firm believer that married couples should have a shared bank account. A joint account is easier to manage and provides a transparent picture into the family finances. According to this recent article, roughly 25 percent of couples maintain individual accounts. In fact, in the small team I work with, two individuals stated to me that they have separate accounts from their spouses. Ironically, while the one person said it works well for them, the other team member routinely vented about her husbands spending and that she didn’t know what money was going in and out of his account. They are now recently divorced.
The separate accounts were far from their main problem but it was an example of their individualism versus teamwork with a shared purpose. Perhaps if they would have had one account, they could have held each other more accountable. Or, their relationship might have went to heck sooner. Hard to say and irrelevant now anyways. Maybe deep down they knew things weren’t going to last so they wanted to keep things separate for an easier break up. The key point is to be open and honest with your spouse.
Financial Teamwork Means Staying Involved
Both ‘heads of the household’ should be involved or at least very aware of the monthly transactions. What bills are coming in the mail? Which are automatically deducted? When do paychecks get deposited? Know the websites and logins to view investment accounts.
This is an area that needs some improvement in our life. I do the majority of the finances (which I enjoy) but if something were to happen to me, I can envision the frustration in figuring that stuff out on top of everything else that would be happening. It would probably be wise to construct a summary of accounts and instructions on how to proceed should the worst happen. Businesses have succession planning and disaster recovery procedures, home finances could be operated the same way.
Estate planning is super important and often overlooked especially by young couples. Unfortunately, accidents and health emergencies can happen suddenly, incapacitating even the most healthiest of people. Do you have a living will? Is there a power of attorney appointed in case you become unable to make financial decisions on your own? Are your beneficiaries setup on all of your retirement and investment accounts?
Sitting down together with a lawyer might not be everyone’s idea of a good time, but the peace of mind knowing your financial affairs are in order will be worth the fees.
Readers- Do you have any other suggestions to improve financial teamwork?