Understanding Your Financial Compatibility
Making sense of the dollars in your relationship can be a challenge, particularly when you’d prefer to talk about something more fun. Just starting the conversation can be difficult, so Libro’s Coaches have come up with some discussion-starting topics for every couple.
What’s Mine is Yours?
Should you combine bank accounts or keep everything separate? There is no right or wrong answer. Some couples opt for a combination approach, pooling household funds into one account while each partner maintains a personal account. No matter which option you choose, open discussion is key! Understanding that each partner’s spending habits differ and budgeting money for individual spending allows each partner the freedom to spend their portion without criticism.
Debt is a Four-Letter Word
Debt is a particularly difficult topic to talk about, and coming to agreement on how much is too much and what is worth borrowing for may be a struggle. Create a list of debt you are both comfortable with (mortgage, car payment, line of credit, etc.) and avoid the type of debt that doesn’t make the list. By establishing early on the type and amount of debt that works for both of you, you’ll avoid the ‘blame game’ later.
Financial Security Blanket
From savings accounts to investments to cash on hand, not everyone has the same idea of what financial security means. It’s important to know how your partner feels and how much you need to have in savings for both sides to feel comfortable.
Who is the financial CEO?
It’s important to have an open discussion about who is going to manage the money so all the ownership doesn’t fall on one person. A great strategy is to assign one person to manage the household expenses for the year – AFTER both partners have discussed and agreed upon a spending and savings plan for the next 12 months! “Managing” means ensuring bills are paid and funds transferred to designated accounts and investments, not making all the decisions on where the money is going. The most important part of this strategy is that both sides maintain equal say and the lines of communication between partners stay open.
Planning Your Route
What are your goals? What do you want for the future? Without a roadmap it’s hard to get to your destination, and the same is true with financial goals. By setting goals that are important to both of you and creating a plan to get there, you set yourself up for success instead of years of disappointment and resentment over why you never got your dream home, trip around the world, or that retirement cottage. Sit down with your Libro Coach and work through a Prosperity Planner together – by laying out your goals and the steps needed to reach them, you’ll have a clear map to keep you on track and milestones to celebrate along the way!
Dos and Don'ts of Couples Finances
There will be mistakes. A few Dos and Don’ts will go a long way toward keeping harmony in your relationship, with fewer surprises.
- Don’t keep secrets about spending or borrowing
- Do create a savings and spending plan together and revisit it every year
- Don’t put one person in charge of all the financial decisions
- Do have a back-up plan and emergency fund
- Don’t blame one partner for all the financial challenges in your relationship