Household Finances

• Tips on Having the Money Talk

Household Finances 101

The jump to married life means adopting a new way of handling finances. There’s no single correct way to manage the household account. What’s important is to figure out what works best in your relationship and to hold regular financial meetings with your spouse – preferably every month – to review your spending and savings, financial goals and budget. Here are some important steps to take with your new spouse.

Set financial priorities and timelines. Make sure you and your spouse agree on which financial goals are most important and when you would like to reach them. If you both value saving for retirement but your spouse would like to save for a bigger home first, you may run into problems when deciding where to put the extra funds from your tax return, for example.

Delegate bill payment. If one partner is better at managing bill payments or figuring out a monthly budget, it’s OK to delegate these jobs to that person. However, be sure to keep the other informed of your budget so that person can understand the spending and saving decisions. Also, automatic bill pay systems will allow you to eliminate most of the work – and avoid bickering about late fees if someone forgets to pay the bill on time.

Set guidelines for discretionary income. Discuss how to handle “fun money” – the costs that often spur disagreements simply because two people value things differently. One spouse might think the $100 treatments at the spa are necessary, while the other might think $100 on tickets to a sporting event could be a good buy. Even if you keep your accounts and “fun money” separate, it’s important to set specific guidelines for when to consult each other before making the purchase, say when the price tag for your splurge reaches $50, $100, $200 – whatever suits your budget. Also be sure that you don’t try to out-spend each other – if you use your discretionary income to fund your passion for cooking, for example, don’t throw your money into pricey equipment that you don’t really need just because your spouse spends more on his or her gym membership.

Tell us what works best for you!