The household income is a very important part of your marriage. Believe it or not, money can end your marriage – or at least, it is part of what will destroy your relationship. A lot of people underestimate the power of money over their marriage. That is a huge mistake to make.
Love may have brought you two together – that is true. But you need to realize that love is never enough to sustain your relationship. There are many factors that can strengthen or weaken your marriage. Money is one of them.
According to an article from CNBC.com, money is not just a representation of your finances. It goes deeper than that. It can actually be used to express your feelings. Some people even use it for power, respect and even to punish. It is a very difficult concept to grasp because it paints our society as a very materialistic one. If you think about it, we do have materialistic tendencies. We use money to define our success. Sadly, that is even true for some marriages in our society.
This truth might hurt but you need to use it to ensure that it will not happen to your relationship. As twisted as it all may seem, you need to realize that there are ways for you to survive money problems and keep it from ruining your marriage.
It all begins with how you decide to handle your household income.
3 methods in the use of a couple’s monthly income
When you get married, your union is deeper than you imagine. You will be uniting your names, your families and your finances. As soon as you start living in one home, you need to consider how your household income will be dealt with to avoid monetary problems in the future. If you set up your finances right from the start, you can overcome a lot of financial difficulties that you will encounter. You will know what to do when tackling debt as a couple. When there is a major change in your financial resources, it will be easier for you to adjust because you have set up a system on how you will handle your money. This system is something that both of you talked about, agreed to and understood very well.
There are three ways that you can actually handle your household income. There is no “best” choice when it comes to these options. Any one of them will work – as long as you are both in agreement to use it. Discuss it well and ponder on what method fits your personalities well.
Everything is combined.
Your first option is to combine everything. Both of your incomes will go to one account and all your expenses will be funded by that account.
If you choose this method, you need to open a joint account where you and your spouse will have equal rights to. It is your decision if you want it to be a survivorship or convenience account. Most married couples will choose the former because it automatically makes one member the owner of the whole account in case the other passes away. There is danger here, of course, since any one of the owners can withdraw money from the account. In case you and your spouse will choose this method of handling your household income, you need to be very transparent with your financial transactions.
The great thing about this method is it becomes a unifying model for the couple. You are forced to cooperate and be transparent with all your financial transaction because both of you can look into the account to check the records. Any difference in spending will be more apparent with this method. Even if only one person brings home an income, this method makes all the transactions clear between the couple.
Everything is split.
The second method of handling the household income is the extreme. The couple will split their money. This is ideal for those who choose not to be aware of the huge difference in their financial behaviors. If both of them earn an income, they will keep their pay checks. If only one has an income, this money will be split into two so the one who stays at home has some money to spend.
The couple will also split the household expenses between the two of them. For instance, the husband will pay for the utilities, mortgage, car loans, and any expense when the family is travel=ling. The wife will take care of the food and groceries and all the expenses of the children. According to an article published on CheatSheet.com, this is usually the method preferred by those who are already in their second marriage. They probably wish to maintain their financial independence since this marriage can also end like the first one.
Although this method is great for establishing financial independence, it can also spark some disagreements especially when it comes to ownership. The other might think that he owns the car because he pays for its amortization. Or, one of them might feel at a disadvantage because they have a smaller income but they have to pay for the same amount of expenses each month. That leaves them with less discretionary income to spend as they wish.
Expenses are combined, but income remains split.
The third method of handling the household income is the combination of the two extremes. This is actually where equality is more at play. When it comes to the income, it is split between the couple. In case there is only one earning, they will split their income so the other one can also get some money. They will open a third account where each will deposit a percentage of their income. The combination of these deposits will be equal to the total expenses that the household incurs each month.
This method is the most fair but it is a bit more complicated to set up. For instance, calculating the percentage of deposit per couple is a bit tricky. But once you set it up correctly, you should be smooth going from then on.
How to avoid fighting about money issues at home
Any one of the methods discussed above can help you manage your household income well. Just make sure that both of you are in agreement that it is the best way for you to handle your money. If your first choice does not seem to work, you can always switch to a new method. It will always be a work in progress so make sure you are open to discuss your finances with your partner.
According to HuffingtonPost.com, arguing about money is one of the top predictors of divorce. A study was done in 2013 by a Kansas State University researcher that indicates how money arguments early in a marriage increase the chances of divorce.
Given that data, you should know tread carefully when you are discussing money issues with your partner. You need to understand that there are certain rules to follow so you can avoid money problems that can drive you to file for divorce.
- Communication. It is always important to communicate. Do not keep a financial problem from your spouse – even if you know that they will feel disappointed or angry at you. We all make mistakes. You need to be honest with your spouse about it so you can figure out how to solve it together. Anything can be fixed as long as you are willing to discuss it amongst yourselves.
- Support. This is also very important. Even if you are not at fault, you need to show support to the one who was in error. This is how you can use your money problems to make your marriage stronger. If one is trying to change a bad financial habit, show your support. If they have to cut back on expenses to save up for a debt payment, you may want to cut back on your own expenses too.
- Understanding. Couples usually have different attitudes when it comes to handling finances. You need to be very understanding especially when your partner is the one making all the mistakes. Be firm, but show them that you understand them so they will not resent the changes that they have to make.
- Cooperation. Lastly, you need to cooperate. When you got married, you promised to be together not just when you are financially abundant. You also promised to stay together even when the money seems to be going down the drain.
Here is a video that discusses 8 common money-related problems that marriages suffer from. You may be able to relate to these problems and might benefit greatly from the advice given.