Listed below are 7 common financial mistakes couples make. Read through this list with your partner and identify one mistake that you’d both be willing to change. After you’ve made that change, identify another mistake you could change. Continue until you’ve transformed all your mistakes into financial successes!
1. Acquiring debt It’s easy to acquire debt as a couple. There’s home improvements, remodeling, new cars, etc. If you’re carrying credit card debt make a commitment to stop using your credit cards. Pay off your debt as soon as you can by determining your monthly payment (make certain it exceeds the minimum monthly payment established by your credit card company). Do an on-line search for “credit card payment calculators”. For each payment amount entered, these calculators will determine how much you will pay in interest and the length of time it will take you to pay off your credit card debt in full (assuming you don’t accumulate any additional debt). Make your credit card payment automatic (by calling your credit card company and requesting an application, or using a bill pay service through your bank).
2. Poor timing Many couples discuss money issues immediately before bed, just before getting together with friends, in a public area or while under stress. Before you bring up a money issue Ask yourself if this is the best time to have this discussion? Challenge yourself to be with your uncomfortable feelings until there a more appropriate time to talk.
3. Not telling the “financial truth” Many couples are afraid to be honest with each other, fearing judgment from their partners. Make a commitment first to be honest with yourself about your financial situation. Be willing to look at your spending behaviors, personal beliefs around money and your debt total. After you have been honest with yourself, challenge yourself to share this information with your partner.
4. Merging finances Many couples assume they should merge their bank accounts. Take some time to consider what you want to do. You might have your own preferences about how you want to handle your money. You might want a “yours, mine and ours account” Or you may want to combine your finances. Discuss your preferences with your partner. You can always experiment with both approaches.
5. Maintaining the status quo As individuals and couples we tend to do the same thing we’ve always done and complain when we get the same results. Dan Kennedy, direct marketing guru and consultant to millionaires says the following about predicting personal income. “One year from today’s date, 90% of us will have the exact same amount in our bank account.” Do more than just maintain your current financial situation. Take financial action now!
6. Spending beyond your means Create a plan to reduce spending and start increasing income. Think of one thing you can do each month to increase your income. Maybe it’s selling something on e-bay, having a garage sale, or cutting back on your expenses.
7. Not having a rainy day account It’s important to have 3-6 months of savings set aside to cover your expenses in the event that you or your partner are unable to work due to illness or injury. Sit down with your partner and calculate your necessary monthly expenses. The key word here is necessary expenses - these are expenses you must cover each month; mortgage, utilities, car payment. An unnecessary expense would be $200 on dining out. If you were unable to work you would trim any unnecessary expenses from your spending. Start putting a predetermined amount of money aside each month into a money market savings account until you’ve reached your emergency savings goals.
