This Valentine’s Day, when you’re looking for the perfect gift for your love consider seeking financial harmony. Considering 1 in 5 divorces are related to financial conflicts and over 70% of couples fight over money more than household chores, what’s for dinner and togetherness, aligning your money values will have far greater outcomes on your relationship than any box of chocolates or shiny piece of jewelry can.
Andrea Woroch is a nationally-recognized family finance expert, writer and regular TV contributor who has appeared on Today, Good Morning America, CNN and hundreds of top morning shows across the country, and she has outlined 5 common money mistakes couples make along with easy financial fixes below.
5 Common Money Mistakes Couples Make and How to Avoid Them
Money Mistake 1: Postponing the money talk.
It’s important to understand how financially compatible you are with your partner even early on in a relationship. Throwing it all on the table gives you a chance to identify potential problems before they grow into full on fights.
Money Fix: Get the conversation started by talking about your values when it comes to spending and saving. You can set the stage by offering information about yourself first and get the dialogue going by asking questions such as what your partner’s family’s attitude was toward money growing up and talk about your future goals.
Money Mistake 2: Hiding purchases.
If you and your honey are on opposite sides of the spectrum when it comes to spending and saving, ignoring this issue can lead to resentment and broken trust if either of you begin hiding purchases to avoid fighting over who spent what.
Money Fix: Set a household budget and outline shared savings goals to align spending and saving values. Linking your finances with a free app budgeting app designed for couples like to help you monitor your finances in one place. Just make sure to allocate some “free” money each month that both of you can spend without question!
Money Mistake 3: Neglecting credit health.
If you’re planning to apply jointly with your partner for a credit card, car loan or mortgage, neglecting to review each other’s credit scores and credit report in advance could result in trouble. For instance, you may get denied due to a poor credit report or face higher interest and other fees as a result. This can cause major tension between you and your partner.
Money Fix: Don’t put goals like buying a home or taking out a loan on hold. Take time to review each other’s credit scores and come up with a plan to rebuild your scores together. You can apply for credit builder loans through apps like Self which make it easy to get back on track together.
Money Mistake 4: Ignoring the “What Ifs?”
Talking about potential job loss, disability and death aren’t the most romantic topics, but tackling the what ifs are crucial for protecting you and your family’s future. Having a plan for the unexpected will make things less complicated and stressful during a difficult time.
Money Fix: Discuss how you’d pay the bills if you lost your job or how to manage personal belongings and assets in case of your unexpected passing. Build up an emergency fund with 3 to 6 months of living expenses. You can buy term life insurance online through companies like Bestow and set up a Will in a matter of minutes online at TrustandWill.com which will power of attorney, health directives and guardianship.
Money Mistake 5: Buying too much house.
When combining income, you may feel excited to shop for the biggest or fanciest home you can afford. However, this can lock you into a lifestyle that doesn’t offer much flexibility and ultimately cause tension when budgets grow tight or an unexpected bill pops up.
Money Fix: Aim for a monthly payment around 25% of your combined income. Use a free mortgage calculator such as mortgagecalculator.org to get a quick estimate for what your monthly mortgage payment will be with taxes, insurance and other expenses.
ABOUT ANDREA WOROCH
Andrea Woroch is a nationally-recognized money-saving expert, writer, speaker and frequent on-air contributor who is passionate about helping American families find simple ways to save more without radically changing their lifestyle. As a sought after media source on all things finance and savings, Andrea has appeared on hundreds of popular shows across the country including Today, Good Morning America, Dr. Oz, CNN, Inside Edition and ABC World News, plus hundreds of regional shows across the country. In print and online, her advice and articles have been featured in New York Times, Time, Money, Cosmopolitan, Forbes, Huffington Post and many more. When Andrea is sharing advice on budgeting or smart shopping, she’s busy chasing after her two young daughters. Read more about Andrea at www.andreaworoch.com, follow her on Instagram @andreaworoch.