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4 Important Money Management Tips for Married Couples

4 Important Money Management Tips for Married Couples

Sometimes married couples struggle a lot with money management, especially when one spouse has no idea about home much money the other one intends to spend. If the couple is not communicating in the right way, late fees, missed bill payments and falling credit scores are the foreseeable results. Married couples should keep their finance on track and understand that successful financial plan starts with good communication with each other.

1. Know the exact income.

To better manage your money, first you should know your exact income and then you can plan the budget. Please remember that gross pay does not equal to net pay and situations may happen that your spouse has higher salary than you but bring home less due to the payroll reduction for 401k contributions and health care costs. If both of the couple are working on a commission-based job, you should review the tax returns for last few years so you can get an idea about the estimated commission-based pay amount. Again, before you plan a budget, you should know how much income you have.

2. Figure out fixed payments.

There are some fixed bills that your family needs to pay each month. Your spouse and you should work out a comprehensive list that contains all of the possible fixed expenses including mortgage and auto payment. Some bills may be fluctuating, for example, utility bills and credit card payments, but you can get an estimate by reviewing the past statements. Then you should decide which payment should be paid by whom so you will not be confused when the payment date arrives. Once you complete the list, deduct the fixed payments from your total income so now you are aware of how much you have left each month.

3. Plan for the future.

A married couple must sit down and having honest conversation about their long term plans. Discuss with your spouse about the retirement plans and try to figure out how much of your disposable money can be invested into the retirement accounts. You should also know that raising children, especially the college tuition and some luxury vacations, costs a lot of money. Look at the fixed payments and decide how much you can put aside into the retirement plan and be prepared for the future.

4. Make your spending discretionary.

Once you have decide the fixed expenses and the long term saving plans, you can think about how to make best use of the other money. Basically, you have three options: paying down debts, saving or enjoying the life. But before you make any decisions, please communicate with your spouse and reach an agreement on how to arrange the money. The easiest way is to set weekly budget individually and review the spending in the weekends, making sure that both of you are on track and you properly address the unexpected expenses. The more you talk about money right now, the less you will have to worry about when unexpected problems occur in the future.

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