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It's always been a good idea for partners to share the financial responsibilities of running their household, but it may be even more important in today's shaky economy. With so much uncertainty, it's nice to have someone to bounce financial ideas off of.
But besides having a sounding board, there are other reasons why couples need to handle the household finances together. Here are five things to consider:
1. Both partners should have a say in financial decisionsâ€¨
Today, in many households, both partners are working and earning money. That means more money is coming into the house, but it also means that there are two people working equally as hard for those two pay cheques. Both parties should have a say in how that money is used. It's not only fair but given the fact that money is said to be the number one topic couples argue about, it's also prudent to have open lines of communication on the subject of finances.
2. Be prepared in the event of illness
â€¨The longer people live the more chance there is that one spouse will get sick. If it's the person who handles the finances, the other one could be left in a quandary about what to do and how to pick up where their partner left off. Bills and investments don't care who's laid up in a hospital bed so it's important for both people in a relationship to be informed and educated about shared financial decisions.
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3. Be prepared in the event of divorceâ€¨
It may sound cynical, but the truth is that far more couples get divorced today than they did 50 years ago. That means it's imperative that both spouses know how much money is coming in and going out.
Not only will you need to have a clear financial picture for divorce court, but what are you going to do when two incomes suddenly becomes one? It's important to become financially self-sufficient in case something unexpected happens.
4. Work toward common goalsâ€¨
Let's say you need to pay for your children's university education, but don't have enough money to get you there. If both partners understand the finances and investments, then two people can contribute funds and ideas to help reach that common goal. If one person isn't willing to cut back on something, then it'll be impossible to reach your financial target.
5. Keep your partner in checkâ€¨
When couples understand their finances, there's less chance someone will make an impulsive or unwise financial decision. Say someone wants to buy a risky investment, but the other spouse has no idea. If the stock falls, it could devastate the household finances … and that's a problem for everyone! It's imperative that both people are on the same page -- that's really the only way you'll be able to build wealth for the family.
Money is such a big issue for families, so it doesn't make sense for one person to be in the dark. Be open, honest and share the burden -- and the costs -- that come with running a home.
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