Money struggles are common among most couples, with the American Psychological Association survey reporting that 71% of U.S. adults consider money to be a significant source of stress. Examining your finances doesn’t always mean throwing a wrench into the machine. It simply helps you make better informed decisions for a better outcome. By incorporating good spending and tracking habits into your routine, you can reduce the stress that could affect your personal relationships and mental peace of mind.
Structuring Your Budget
You won’t want to spend more than you are making. This means that you need to track what you are spending, breaking your numbers down into segments for bills, groceries, discretionary items, entertainment, and other basic spending categories.
Expense tracking can be done through a spreadsheet, an online budget/money tracker, or budgeting software. Your bills can be paid with an Ria money transfer and should always be deducted first on your budget. Some programs can be directly linked to your accounts to minimize the time you spend entering expenses. You might be surprised to see where your money is actually going and where small changes in your spending habits could make a big difference.
Working as a Team
You and your partner want to have a successful partnership when it comes to spending money. To avoid distrust and stress from financial burdens, don’t hide your finances, spending, or money plans. Set a specific dollar limit, and discuss purchases over that limit to keep the bigger buys mutually agreed upon.
Find the money-sharing system that works best for you, whether you are keeping accounts separate or joining them. There are a number of ways to agree on spending, such as choosing to divvy up the bills, selecting a “breawinner” who pays for everything, or putting money from both parties into a main pot to be divided among expenses.
Accumulating Savings and Rainy Day Funds
It is important to avoid living paycheck-to-paycheck. Set aside some money from each paycheck to be added to your savings. Don’t get your savings confused with your rainy day fund — which should be another fund set up for the snags you will hit. Your rainy day fund should equal a few months of salary while your savings should be a pot from the regular amount you pull from your paycheck each month.
When something breaks down, someone gets sick, or you need cash immediately, your rainy day fund is available. You should avoid dipping into your savings at all costs so it is there for your future or if something really bad happens, like you lose your job and can’t find another position for a while.
Considering Good Debt and Avoiding the Bad
Most families should go into debt over investments like a home or college education that they can realistically pay back. Bad debt results in no true assets with high interest rates, such as credit card expenses that cannot be paid off at the end of the month. A good rule of thumb is to use your credit card like a debit card, carefully spending no more than you actually have in your spending account and paying it off in full each month. This allows you to earn points back and improve your credit score while eliminating nasty fees and high interest rates from leftover balances.
Avoiding Impulse Buys
You might be surprised at just how much of your money is spent on items you don’t need or even plan to buy. According to research gathered by Milo, 14% of impulse buys are food items, and 88% of all impulse purchases are made because the item is on sale. To reduce your impulse buys, stick to a list and plan your shopping trips. Milo found that unplanned purchasing is 23% higher during an unplanned shopping trip.
Don’t be afraid to keep the channels open, and discuss finances at least once a month with your significant other. Though the discussion is often a bit uncomfortable at first, the openness will go a long ways towards recognizing common ground and finding solutions to problems that might arise in the future.