Studies done by Money magazine found that 70% of married couples argue about money ahead of fights about household chores, snoring and food. Another study found that the most common points of disagreement among couples when it comes to money are: major purchases (34%), a partner’s spending habit (23%) and important investment decisions (14%).

Money management can actually be a rewarding way to bond with your loved one. Here are steps to take and tips to make sure you get on the right track for a lifetime of properly managing your joint finances.

Money matters and it can also make some spouses even lie, cheat, and overspend, and cause all trust within the relationship to be a distant memory. As a newly married couple, how can you prevent these tragedies from happening in your own marriage?

There is definitely hope, but you need to act early. In fact,

Write Down Goals

After you have determined your baseline financial status, discuss your long-term financial goals in-depth. For example, do you plan to retire at a certain age? Do you want to get out of debt and become a millionaire? If you’re planning on hiring a financial advisor, these are the kinds of things they’ll want to know.

Build an Emergency Fund

If you don’t already have an emergency fund, consider making this a top priority. An emergency fund is a money that is set aside in case something expensive happens unexpectedly, such as a lost job, family illness, natural disaster, or a major home repair. Aim to save about 6 months’ worth of your household expenses in case the emergency is that you have no income. Building an emergency fund should be a priority because it will bring financial security and protect your relationship in case disaster strikes. This money should be kept someplace where it’s easy to access. I recommend a Savings account so you can earn a little profit from your funds.

Design a Budget

As I mentioned, one of my goals with my husband is to ensure that we are within budget each month. So we don’t go into debt, we limit how much we’re allowed to spend in certain monthly budget categories, such as food, dining out, and entertainment. Personal Capital allows us to really dig in and get a good idea of where our money is being spent.

Track Your Budget

It’s not enough to just make a budget. You need to make sure you stay within your spending allotment and adjust accordingly as your situation, expenses, or income changes. One very effective way to stick to your budget is to use the envelope budgeting system. This is perfect for young couples who typically have lower incomes and must be careful not to overspend.

Share Responsibilities

Money management in a marriage is not about having a quick discussion with each other and then one person carrying the ball for the couple. It involves both parties working together and sharing responsibilities equally. For example, both husband and wife need to take part in decision-making, budgeting, and bill-paying.

Moreover, and we’ve seen this happen, if responsibilities aren’t divided and something happens to the “financial” spouse, the other spouse can be left clueless. Bills may go unpaid, debt may accumulate, and what once was a solid financial position can deteriorate rapidly. In the interest of preserving you and your spouse’s welfare, make sure each of you is aware of your entire financial picture and is in charge of managing a portion of it.

Work as a Team

To properly work as a team, you must have the same goals in mind. Work together to come up with ways to accomplish those goals. Always encourage each other and build each other up. Be aware of your own weaknesses and strengths, and play off the strengths of your spouse to bring synergy to what you are trying to accomplish.

Be Honest

Honesty is always the best policy, especially when it comes to money management in marriage. If you mess up or make a purchase you shouldn’t have, tell your spouse and own up to your mistake. Your spouse may be upset with you initially, but after he or she cools off will respect you and trust you because you were open and honest. Lying about money to your spouse has huge repercussions, including divorce, so don’t even think about going there if you want your marriage to last a lifetime.

Trust Your Spouse

Unless you determine that your spouse is indeed lying to you, trust your new spouse to handle money. Withholding responsibilities from your spouse or watching every move he or she makes is condescending and demeaning. Don’t ask how much money your spouse spent or made during the day. Learn to let go of the control and just trust. Combining bank accounts is a great way to practice this.

Learn from Each Other

Don’t think of yourself as the be-all and end-all of financial knowledge. There is a chance that your spouse knows more or is more experienced and disciplined when it comes to handling money. Even more likely, there will be some things you know more about and some things your spouse knows more about.

For example, I know more about making everyday purchases than my husband does, such as extreme couponing. On the other hand, my husband knows more about investing, so we are able to learn these things from each other.

EndNote…

Marriage and money can be tricky, but the best thing you can do is be open and honest. Start off on the right foot by talking about money management and coming up with a solid plan to deal with budgeting, spending, and investing. The sooner you do this, the better. If you form good money management habits as a newly married couple, you’ll be able to work as a team through whatever life throws at you for many years to come.

How do you and your spouse manage money? What are some of the things that have worked best in your situation?

Khurram Zahid

The post How to Get Financially Organized with your Life Partner appeared first on Smartchoice.pk.

You can become a money management expert even with a limited amount of earning. Implementing the idea on your day to day life will help you become a better and independent person in lesser time. The world is full of people who are not good at handling their money and end up in financial hardships. Today we will be talking about the most common mistakes that lead to the financial hardships in Pakistan.

The aim of this article is to highlight the most common financial mistakes people make that lead them to financial crises. If you are already facing financial crisis excluding these habits this articles will help you in some way.

1. Excessive Spending:

It is not a big deal to have a cup of mocha coffee a pack of cigarette or dine out or order food to watch a movie at the cinema once a week. However, if you are doing such expenses,  now and then it will lead you to no benefits. Spending more than PKR 2500 means that you are spending PKR 130,000 per year. If you want to stay safe financially, then this is not a good idea to spend that much money every week. Such spending habits may lead you to bankruptcy and other financial crisis like debt.

An average person in Pakistan is either registered in a gym or has to pay the lease payment for a car or a property in the latest housing society. Apart from such periodic expenses, every person, in the modern world has to pay utility bills or mobile recharge etc. Handling all these financial matters in-time is the key to stay secure in future. At first, if you have a limited income, recommended is to avoid any such luxury and focus on the basic needs of life. However, if you can afford any of these, recommended is to go with the flow. Pay all the bills on time, and never skip paying the monthly installments.

Just like owning a car on lease, using credit cards is also a common trend in Pakistani society. Many people are using credit cards for shopping and paying for other luxuries of life. These cards are also used to pay bills including restaurants bills, shopping, phone bill and Petrol etc. In most of the cases, people are seen having issues with spending more than their earnings.

Avoid making such mistakes, spend a limited amount of money that you actually have. Do not buy anything or go for any activity in your life that your bank account does not afford.

2. Living From Paycheck to Paycheck:

One of the most common mistakes the job person make is that they live from pay-cheque to pay-cheque. Such mistakes are based on some specific habits. These people do not pay attention to managing their expenses, making a budget and following it, understanding and differentiating between needs and wants and trying to save money from each salary they get. At the same time, we can find many employees who do not pay attention to their deductions and consider using the bonus wisely. Such habits lead to an empty bank account at the end of each month.

Such habits are surely not good for a person who is looking forward to becoming independent, financially.

3. Not Investing:

There are many people who are good at making budgets or have the ability to control their expenses but only a few of them have the idea of using this saved amount in a way that they can earn some benefits on it. Let’s say a small investment that can earn them profit in long run. There are a number of investment companies including banks that offer investment opportunities. You need to be careful while making a decision for investing in these plans as there are many different types of investment scams, people become a victim of. If you can deal with the matter efficiently, you can earn a profit on your saved amount.

People who are good in saving but are not working with any kind of investment plan also end up facing financial issues in their hard times. For this reason, it is not necessary to have a big amount to invest, you can look for small investment idea and opportunities that can earn you benefits in hard times.

4. Not Having a Plan:

A plan in life is a must. Today the world is full of opportunities and if you are not focused on what you want to achieve and which way you must go, you will end up facing issues in your life. To perform well, in terms of financial benefits, you must formulate and stay stick to a proper plan. This plan must help you in achieving your long-term goals. Setting up the aim and working on it with a plan will help you to stay consistent and productive.

5. Spending Too Much on Living:

Just like a car, a house is the core necessity for a person. However, better is to stay focused on basic needs and do not fall for luxuries. Bigger the house more the expenses including utility bills and maintenance. Go for a house according to the size of family you are living with. Do not focus on borrowing a big amount to buy a house. There are many options offered by different housing societies. They can offer you homes with easy installments, you can choose any of the offers you find suitable for your needs and do not become a victim of financial issues.

Monitoring your expenses is of core importance to remain financially independent in your life, It is also important to define what exactly your needs are. Another important thing is to focus on your savings as they are the only best friend that can help you through your hard times.

Khurram Zahid

The post 5 Mistakes Pakistanis Make that Result in Financial Hardship appeared first on Smartchoice.pk.