Did you know that money and finance is the most common reason for divorce in America? Yes, it is true, and is increasingly becoming common here in India too. With double-income families, not only has the money and the bargaining power increased, but also the number of conflicts over this. In the current financial situation worries about money are greater than ever and are likely to result in even more arguments on the subject.

But you'll be surprised to know, most fights occur not because of the amount of money spent but because of unspoken expectations that couples have and are often afraid to talk about. Sometimes it's clashing styles, sometimes mismatched agendas, but people get so rooted in their own money views that they can't see that their partner simply has a different perspective.

In one counselling session, the husband described his goals for investing, insurance, retirement saving etc. Next the counsellor asked the wife to describe her goals and the husband was shocked to know that his wife had goals-and they were different from his! This is hardly surprising considering that most couples talk about everything, including sex and personal matters, yet evade talking about finances-often until its too late.

If you are among the few who have talked about money with your spouse, you will also know that talking alone won't do the trick. And the reason is, people tend to be emotional and reactive while talking about money, and when emotions run high, one tends to make mistakes.

So the solution is in approaching the family finances as though you were running a business. Consult all board members while taking decisions, weigh the risks and gains together and check if it takes you towards the long-term goals.

Points of Discussion

1. Ask your spouse about his / her financial upbringing - and be willing to explore your own. Like almost everything else, the way your parents managed finances would have taught you how you would like to manage your finances.

2. Pick a good time to talk about money-not during meals, just before bedtime or when inebriating substances are flowing! Pick a time when you can both be practical and rational, not after a particularly tiring day at work.

Simple Pointers 

Set up a Budget
Even if you had one when you were single, you need a new one after you get married. This must include both partner's incomes, bills and debts. Most couples make the mistake of labelling one as the "spender" and the other as the "saver". Usually that is not accurate though-both spend equally, but on different things. One on daily expenses (groceries, bills etc.) and the other on the bigger purchases (plasma TVs, cars and computers etc.). So while budgeting make sure you decide how much to allocate to the "daily-ness" of life and how much to save for the large purchases.

Decide About Your Accounts

Whether you use separate or joint accounts, consider using "yours", "mine" and "ours" accounts. It's like saying, "You should have some autonomy money, I should have some autonomy money, and we need to learn how to practice being a couple together with our money". Experts agree that if a couple cannot share their money; it's probably a signal that something is wrong in their relationship. When loans and children are in the picture, couples often find it easier to merge all their money. But unless you are both comfortable with the idea, don't push it.

Dealing with Debt

 This is one of the topics couples fight most about. Like it or not, once you're married, your spouse's debts can become your problem. Granted, you're not legally responsible for the credit-card balances run up before you got married, or for any loans opened in your spouse's name alone-provided you keep your finances completely separate.

However, the best practice is to work together to figure out a plan to pay it off. But don't officially commingle your debt; allow existing credit card and loan accounts to remain in the original holder's name.

Investments 

This again is a bone for contention. One might be a complete risk-taker while the other may be risk-averse. If you cannot decide for yourselves, discuss with a financial planner and if even that doesn't work, decide one portion of the saving that could be risked while the other sits safe. Remember this might be just another aspect of your spouse's personality you have to make your peace with-just like you have done with the smelly socks and the time spent on make-up!

Whatever your investment choices, review your investments together at least once a year and make sure that, overall, your portfolios balance each other out.

Financial Secrets

It's wrong to think, "What she doesn't know won't hurt her/him". Remember financial secrets can ruin a perfectly good relationship. But it is also true that most people at some time or the other lie to their spouse about the price they paid for something. So if you find out that your spouse saved the extra five-thousand-rupees from her/his monthly money to buy the designer outfit or golf clubs s/he claims to have spent "only a-couple-thousand-bucks" for, it is not that big a deal! It is a matter of concern however, if this is repetitive and the amounts are large.

Emergency Planning

Assess your emergency fund. Every couple should have enough money to cover three to six months worth of living expenses. Keep your emergency fund in a way that both you and your husband can access it, if required. It is also important to update your paperwork, including wills, beneficiaries, life insurance policies etc. Also make sure you both know about each other's investments as well as loans. Your financial obligations to your spouse don't end at death. And should you die prematurely, you don't want to be leaving behind a real mess for your family to deal with.

As with all issues in marriage, the key is not to avoid the topic nor to insist that one's own view-point is the only correct one, but to discuss openly and with as much clarity as possible. And if you need further help with this or any other issue, our counsellors would be glad to help.