Since one of our core competencies is providing financial advice for widows, the team from Merit Financial Advisors has seen firsthand how money can put a strain on a marriage. Although a stable financial footing can lead to a happy, successful marriage, we’ve all heard the saying that with more money comes more problems. Unfortunately, this can ring true when it comes to finances, especially dealing with those who’ve lost a spouse or people going through a divorce.
Below, we wanted to touch on some of the ways that money can complicate things in a relationship, so read on!
1. Dictating Cash Flow
One of the foremost issues when it comes to money and marriages is when a couple has a financial situation where there’s a sole breadwinner and this person is dictating how the money is spent. Doling out cash to your spouse can quickly lead to resentment and issues, placing one person in control of the budget for both parties and the other in the position of occasionally having to ask for cash when they need it; an unpleasant scenario for everyone involved.
It’s always recommended that regardless of who’s bringing home the bacon, couples share financial responsibilities like budgeting and paying the bills, using an account for joint living expenses, and assuming different financial roles in the relationship.
2. Keeping Financial Secrets
You’re supposed to feel comfortable telling your significant other anything, including when you decided to splurge on that new set of clubs or go on a spring shopping spree. Keeping financial secrets is a quick way to create trust issues among partners and chances are if you’re hiding what you’re spending from your spouse, they’ll likely find out about it sooner or later. Keeping financial secrets can often have an effect on your relationship, so, like most things in life, it’s better to simply tell the truth.
3. Communication Issues
For some, talking about money in any way, shape, or form can be tough. Some might be touchy when it comes to financial matters or embarrassed about their spending habits, the amount of money they make, the list goes on…But open communication between couples about financial matters will help create trust and help you reach major milestones in your relationship, like successfully buying a house or beginning a family. Even those whose financial opinions might differ can find ways to work together and get along, balancing each other out in the long run. By budgeting properly and taking into account your financial strengths and weaknesses and those of your partner, you’ll be able to pave the way for a strong and financially-sound future.
Early on in the relationship, discussing your financial philosophy with your partner will help you both build a strong foundation of trust to base important financial decisions upon. Also, divvy up roles and responsibilities. For example, if your husband is a numbers cruncher, have him manage the monthly expenses while you take care of more long-term investments.
4. Budget Clashes & Poor Projections
When a partner goes above the budget or disregards your financial advice, it can create serious issues, right? Many might immediately jump to the conclusion that their partner doesn’t care about their mutual financial goals, but often this couldn’t be further from the truth. Everyone makes mistakes, especially when it comes to finances, so there should be a bit of flexibility and understanding among partners to avoid serious clashes when it comes to the monthly budget.
It’s important to be understanding when it comes to overspending or little budget hiccups because you and your partner likely have different financial backgrounds. Just like your relationship, you and your spouse bring each of your life experiences to the table, based upon how you were brought up: finances are no different. Money can be an emotional thing, so a certain amount of sensitivity often goals a long way.
Also, piggybacking on what was mentioned above, making assumptions when it comes to financial matters is never a good idea. Being open and talking about money problems in a respectful manner is the best way to avoid serious budget clashes and arguments about poor projections and investments.
5. Blending Family Budgets
There are a lot of moving parts when two people decide to get married, making the financial landscape more complicated. This is further complicated if it isn’t your first marriage, as parties can often bring things like real estate, life insurance, children, and other factors to a new marriage. Sometimes, unexpectedly, these assets can be placed at risk in a new marriage. One of the best ways to avoid issues is by being as transparent as possible upfront.
Before tying the knot, sit down with your partner and discuss your financial goals, outline your assets, and talk about your liabilities. Creating and signing a prenuptial agreement is also another way to avoid financial difficulties and misunderstandings down the road. By doing so, you can clarify what assets will be kept separate and which ones will be shared by you and your new spouse.
At this time it might also be a good idea to discuss things like life insurance and retirement benefits as well. This is especially true for those who are on their second or third marriage. However, since things like life insurance and retirement planning are so complex, working with a wealth management advisor is often a good idea, to ensure the very best decisions.
Contact us today for more financial advice for widows!
If you’re in need of financial advice after your spouse has passed on or you’ve recently been divorced, contact the team from Merit Financial Advisors now. You can reach us online or by calling (866) 628-3508.