It may not be romantic, but finances are an important part of any marriage. When couples are not on the same page about money, problems can, and often do, promptly ensue. Poor financial decisions can also set a bad example for children. For all these reasons and more, families should work hard to improve their financial communication. Here are five tips an independent financial advisor would endorse.
1. Create A Budget
One of the most common sources of conflict in a marriage is unapproved spending by either spouse. When these choices are made unilaterally, without discussion, the other spouse tends to feel left out. Creating a budget or spending plan can help couples come to an agreement about what’s important to the family from a financial perspective. It can also help them avoid feelings of resentment that may stem from a perceived lack of accountability. Although they need not concern themselves with the dollars and cents of budgeting, children should be taught the importance of spending limits. Parents can do this by emphasizing the difference between wants and needs with regard to any spending decision. An experienced independent financial advisor can help families create a personalized spending plan.
2. Set Goals
The main reason budgets are important, especially for young families, is that they create financial focus. Whether the objective is a new home, braces for the kids, or a college fund, the only way to reach those goals is to save more and spend less. When created with input from an independent financial advisor, a spending plan can help families achieve that end much sooner than expected.
3. No Blame Game
All families have a person who is entrusted with making most of the spending decisions. To avoid playing the blame after every shopping trip, families should discuss what constitutes a wise or foolish purchase. When families agree on spending limits beforehand, the risk of conflict can be greatly reduced. Healthy, open communication about finances also teaches children valuable lessons that will last a lifetime.
4. Reduce Spending
One of the best way to encourage saving as a family unit is to actively organize and assign household chores. Both parents and children can get in on the act by handling tasks that would otherwise require outside help, e.g., cleaning person, landscaper, handyman, etc. Families can also work together to reduce monthly spending on household utilities. Shutting off the lights in unoccupied areas and lowering the thermostat a degree or two can reduce expenses by a significant amount.
5. Set A Good Example
When it comes to finances, the old “Do as I say, not as I do” approach never really works, especially when children are involved. As a result, the children of spenders often turn out to be spenders, while the children of savers almost always turn out to be savers. For parents who want to impart financial responsibility, it’s impossible to have it both ways.
With the help of these simple tips and an independent financial advisor, families can talk about money in a healthy, productive way.