If only that were true.
The fact is that many marriages don’t last. It’s very difficult to say what percentage of marriages end in divorce but we do know, thanks to the Huffington Post, that about 30% of the people that got married in the 1990s did not make it till their 15th anniversary. We also know that at this time, 21% of men and 22% of women have been divorced.
Why so many divorces?
Why has divorce become so prevalent here in the US? There are a number of reasons for this. According to Relationship Counseling, the number one reason people say they got divorced was because they had married too fast. Coming in second was communication breakdowns followed by cheating and infidelity.
However, money is a major problem in many marriages. In fact, the majority of surveys regarding divorce suggests that one of the biggest reasons why couples divorce is money. There are even couples that have been married for many years that rate their marriage as “in trouble” due to strong disagreements about savings, spending and financial decision-making in general.
Another reason for problems is “financial inequity” which translates into who is bringing what to the table and who has the biggest say when it comes to making financial decisions.
How problems start
When you stop to think about it money problems are often related to the number two reason for divorce – communication breakdowns. Most newlyweds find it easy to talk about things like planning a weekend trip or buying a new piece of furniture. However, where problems often start is when it comes to talking about bigger issues like debt and overspending as this is where it can easily deteriorate into arguments.
Discuss your financial goals
Your first tip for financial peace and harmony is to recognize that money can be a big issue and that its importance needs to be acknowledged. One way to handle this is to sit down and define your financial goals for the next year, for five years and for 10 years. This gives both partners a voice in financial planning and can uncover differences that need to be resolved. For example, his 10-year goal might be living in Manhattan and working as a financial advisor while her goal is to be teaching in an elementary school in a small town. If you discuss your goals and find major differences like this, you have the opportunity to talk them out and try to find compromises. The alternative, which can be serious, is just stumbling into a problem when it’s too late to do much about it.
Watch that spending
A serious mistake that many newlyweds make is purchasing things beyond their ability to pay for them. It’s easy to want everything immediately but overspending is a sure path to big debt. You may want to surprise her with a new car but if you’re carrying a load of student loan debt, that just wouldn’t make good sense. Plus, a used luxury sedan might please her just as much. So how do you avoid overspending? First, set a limit as to how much you’ll spend on any large purchase. She might want a $2200 San Mateo dining room set but if you’ve agreed on a budget of $600 then she’ll just have to shop for something different.
Get a joint checking account
Many young couples have a hard time merging their finances immediately after getting married. A good start is to open a joint checking account. This account should be used to pay for things like cars, houses, utilities, childcare and so forth. And, of course, you’ll want to work together to create a monthly budget for the account.
There is no one right way as to how couples contribute to the joint account. The two of you will just have to decide what’s reasonable and what’s not. For example, if the two of you agree you need to put $2,000 a month into the account the husband may agree to take responsibility for contributing $1500 while the wife contributes $500. In other cases, it might be the wife that contributes the $1500. When you have a joint account it not only forces you to discuss finances on a regular basis it makes it impossible to have secrets.
Newlyweds need to discuss money on a regular basis
It’s crucial for newlyweds to talk about your finances on a regular basis and to be both transparent and honest with each other. A major cause for problems between couples is when one of the two discovers the other made a major purchase without first discussing it. You can avoid this by sitting down at least once a month and having the money talk. This provides an opportunity for the two of you to discuss and decide on things together. This can be especially true when it comes to investments. If an investment goes south, it’s important that the two of you agreed on it because it will have a serious effect on the both of you.
Create an emergency fund
As newlyweds it’s important for the two of you to work on building an emergency fund. There is no if you’ll have an emergency, it’s a when. You could be contributing equally to a joint account and then one of you loses your job. If don’t have an emergency fund this could lead to big problems. The financial experts say your emergency fund should be the equivalent of six months’ of living expenses. As newlyweds this may seem like mission impossible. So try for at least the equivalent of three months of your living expenses.
Blend your lifestyles
It’s not only important to blend your finances is equally important to blend your lifestyles. Couples where there are discrepancies in income may find this fairly difficult. There may be times when she wants to go out for a luxury meal or take a two-week cruise but he feels he can’t afford it. When this is the case you will have to learn and accept compromises. If you don’t plan together the result is that the two of you will be basically living two different lifestyles under a single roof and your financial problems may never end.