“Everybody lives paycheck to paycheck,” you say? True, most of us are more concerned with today’s expenses rather than tomorrow’s nest egg. It’s so easy to get caught in “keeping up with the Joneses” that we forget what we’re spending (and giving up) to do it. Here are seven mistakes couples make with their money and how to start fixing them now.
- Living for the moment, with no safety net?
Have any last-minute spending you can’t remember this month? Aw, come on. Most of us do.
Did you forget those souvenirs the kids wanted, grabbing a fancy dessert for a party, or the drink with friends that turned into dinner? Such unexpected purchases should make it into your budget via a miscellaneous or “fun money” category or something.
Start Your Fix: Don’t have a budget, or spending plan? Think about your wants and needs, then list the categories where your money goes. Be sure to include a category for emergencies and saving. Find a free template here.
- Spending in secret?
Ever hide receipts from a spending spree or a casino weekend with buddies? Do you know where your spouse spends? Is it your money or our money?
A survey funded by CESI Debt solutions revealed 80% of married couples don’t tell partners about some spending and 73% said it wasn’t acceptable to spend $100 or more without telling your partner. Hiding purchases and/or debts, having secret accounts or getting credit cards in only one name signals trust issues.
Start Your Fix: This is a good reason to order your credit report annually, which you can do free here.
- One person is the financial workhorse?
Relying on one partner to shoulder the financial load may be convenient, but what if something happens? Work out a plan to involve both of you (maybe the kids too) so you’re in sync.
Start Your Fix: Discuss financial chores—budgets, bills, investments, bringing in income, etc. Here’s a starting point.
- Different goals, no money harmony?
You want a vacation, he wants a new car, the kids want new cell phones. Your budget points to compromise?
Start Your Fix: When your family can’t have it all, it’s time to have a family money talk. Here’s a script.
- Building debt, not wealth?
Most of us use credit often. Student loans, car loans and revolving credit card balances keep us in a cycle of making monthly payments – which often includes hefty interest or finance fees. Unfortunately that leaves little spare cash for building up a nest egg.
But the earlier you stash some savings, the more the magic of compound interest works. Even small amounts add up!
Start Your Fix: Try opening a savings account for each goal (college, new car, vacation) and put in money every paycheck. Save automatically – start small, think big. Get tips to build wealth here.
- Being late…or forgetful?
You planed to save last month, but you didn’t get that account opened? You knew a credit card bill came, but you missed the due date? Life gets busy; finances get ignored. Months pass.
Start Your Fix: Save yourself time, frustration and late fees by putting financial to-dos on auto-pilot. Direct deposit your paycheck and make an auto-deduction to savings. Use auto bill pay, get electronic statements. Use email reminders for deadlines, like filing taxes. As you might expect, there are apps for that, rated for you here:
- No backup docs, memory failure?
Yes, life gets busy…so financial paperwork is often tossed in the “to-do-later” pile and we fail to write down transactions, assuming “surely I’ll remember that,” right?
Wrong. Good recordkeeping means written documents and receipts – because the IRS (Internal Revenue Service) and others won’t let you rely on memory.