Managing family finances properly is very important. This can lead to a happy and peaceful life.
Failing to manage family finances can cause disagreement and may lead to zero savings.
Here are ways to properly manage family finances:
Talk openly about your finances
While this is important throughout life, it is especially important to establish financial honesty before you get married. If one partner has a poor credit history or large debts that are not brought up before marriage, it can lead to resentment and problems down the road.
Before getting married, you should meet with your loved one and discuss his current financial situation, including how much he makes, where that money goes, his credit history, and any large debts he is carrying. This sets the tone for financial openness in the rest of your lives together.
Meet regularly to talk about money
Decide on a time of the month to get together specifically to discuss your finances. Perhaps this meeting can coincide with the arrival of the monthly bank statement or the due date of monthly bills.
In any case, use your time at this meeting to assess the previous month’s expenditures, mark your progress towards long-term goals, and to propose any changes or major purchases that you want to make.
Decide on an account setup
Families have options when it comes to setting up joint accounts. Some choose to keep everything together while others keep their finances mostly separate. At minimum, you should have a joint account to pay for household expenses and your mortgage payment.
At the end of the month, you can split these expenses and each transfer in some amount of money into this account to pay these expenses. Having separate account can prevent arguments that might arise from one person’s spending habits.
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Build up individual credit
Even though your finances will be combined, it is still important for each of you to have a strong credit score. A simple way to manage this is by having separate credit cards, each established only in the name of the spouse who uses it.
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