Couples Cash: the dynamics of managing money with your Valentine
By Carla Hindman, Head of Financial Education, Visa Canada
When it comes to managing family finances, Valentine's Day might not be the best time to broach the topic of your financial future. The phrase, "Honey, let's talk about our financial future," hardly evokes romance! That being said, if you haven't already, you really should have that conversation to help keep your relationship on a healthy financial footing.
Major life changes may cause an adjustment of how you manage your family finances. Unfortunately, many couples don't make time to plan ahead and are later caught off guard around the financial impacts of having children, aging parents, planning for emergencies, or changing careers.
If you haven't had a financial heart-to-heart lately and aren't sure what to do next, here are a few suggestions on managing money with your valentine.
Make a financial "date". Even if you're in complete agreement on money matters, the family "accountant" should keep his or her spouse in the loop- if nothing else, so they can easily take over in an emergency. Set up regular meetings to discuss bill payments, progress or setbacks regarding savings goals, budgeting for upcoming expenses and strategies for coping with unforeseen expenses.
Don't postpone uncomfortable discussions. Should one of you accidentally bounce a cheque or miss a payment, don't wait until your next conversation to address it or hide the problem. You'll only make matters worse and create an atmosphere of mistrust. Address the problem and deal with the issue right away- you might even save yourself additional late fees or penalties.
Be united. When the news isn't good, communication is even more important. Whether you need to temporarily tighten the budget or make a major life-altering decision like postponing retirement, talk it through and be prepared to compromise.
Reaffirm your goals. Couples often start out with one game plan but then life deals an unexpected hand and goals change. Touch base periodically on how you both feel about such major issues as family size, home ownership, career changes, financing post-secondary education for your kids (or yourselves), financial risk appetite, when and where you'll retire, and taking care of elderly parents.
Update legal documents. Make sure your legal and financial documents are up to date and reflect your current wishes, including wills, financial and medical powers of attorney, life insurance policies, retirement accounts, investment funds and any other accounts where beneficiaries or people who control your health or finances are named.
Stick to your budget. Some of the worst marital disagreements occur when one or both parties disrupt the family budget. If you don't already have a budget, there are many tools available on Visa's Practical Money Skills website. The site features a guide to handling your debt and tips on creating a budget you can live with, along with interactive budgeting tools.
Seek help. If you discover that you've gotten off track or need help realigning your financial goals, consider consulting a financial advisor for assistance.
Bottom Line: There's nothing romantic about discussing family finances, but regular discussions with your partner can help you stay on the right financial track.
This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.