Romance & Money
Communicating About The Budget
Arguments about finances
Michelle in Chicago, Illinois:
"Help! My husband and I have been married for only two months now, and we
already are having arguments about our finances and how to handle them. He
thinks that we should take every extra penny we earn each month and pay down our
mortgage. I disagree. I think we should pay our mortgage each month and use the
extra income to open an investment account. He also thinks I spend too much on
shoes and personal services. I'm willing to cut back, but don't really know
where to start.
We both agree that we want to stop arguing but don't really have anyone to turn
to for answers. We've agreed that in the interest of our relationship we will go
along with whatever you say. We love each other too much to be so torn apart
over this issue. Please help!"
You're both right about the finances, and you're both right that if you continue
to argue over them, you will be torn apart. Statistically speaking, marriage
counselors say that most married couples argue over money, and it's the number
one reason for break-ups.
In finances the all-or-nothing approach is not always best. Every extra penny is
a bit extreme.
"All extremes are dangerous."
Divide those pennies and don't forget to put some aside
Develop an annual budget that compels you to set at least
one extra payment aside each year for your mortgage. The budget will give your
husband something tangible to look at by the end of each month and he'll see
that he's applying monies to the mortgage principal. The budget also will show
you how much you have each month to put towards an investment portfolio. The
act of investing and watching it grow should be incentive for you to cut back
on some (not all) of your personal services.
"I'm living so far beyond my income that we
may almost be said to be living apart."
Only you can decide what you can live without
and how those pennies can better serve your future. By doing all this in the
form of a budget, you will be reaching a compromise and will both be able to
watch your dreams grow on paper. And your husband will see where you are
cutting back. Hopefully, this will satisfy both parties and all financial
Review and revise annual budgets.
I'm a big believer in diversifying your monies. Before you
open any accounts or pay extra on your mortgage, make certain there is no
debt. If you have any credit card debt, then the best thing you can do is to
pay that off first. Set aside a minimum of six months living expenses as a
cushion in case of an emergency.
When all of that is done, then and only then, start an IRA or 401K and invest
If you have all that in place, and are comfortably
investing regularly, carry no debt and have liquid cash for a six month
period, then start paying extra on your principle.
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