Expert advice

Jan 19, 2015,14.10 IST

Six financial mistakes couples should avoid committing

Ramalingam K

Money management in itself is a task hard enough, and inclusion of your life partner in the equation makes it even more complicated. Many times it is observed that money matters lead to differences between life partners. Therefore, rather than being emotional or reactive on money related matters, couples should be clever, calculated and decisive. Here, we will try and understand what mistakes couples most commonly tend to commit when handling money concerns. And more important is how to fix these issues.

1. Keeping check on your partner’s spending:
Not too surprising but true, spending is another very common reason why couples resist each other’s beliefs. The blame game then begins over the spender and the saver approach. Research shows that men and women tend to spend equally, however differently. Because of this difference in the spending patterns, the perception too becomes a little different. The overall solution lies in identifying the real problem.

2. Investing solo:
When it comes to investment, men are more open to take financial risks compared to their counterparts. In financial investment, couples should always make wise decisions with each other’s mutual consent over their investment goals. Couples should review their investments together once a year, just to ensure that both of their portfolios balance each other.

3. Being secretive over money matters:
Talking about finances in a relationship may be delicate, but a very necessary topic of conversation for a couple. Talking about sharing your household expenses, big item debts such as cars, credit card payments, can always be helpful. You may also consider mapping out the logistics. Don’t ignore your long-term goals as that may assist your saving approach. Always remember that big financial secrets may even end up ruining a strong relationship.

4. Not planning for an emergency time:
Even with a well-settled career and a comfortable living without a worry for any kind of debts, one may sometimes find oneself sorely unprepared for an emergency. Lives nowadays (both personal and professional) are so stressful that one has a risk of any adversity happening to him/her.

In such cases, you may even find yourself completely off-track without an emergency fund. Couples usually have a tendency to raise their panic button in time of an unexpected emergency. This could even lead one to make incorrect decisions. Therefore, all couples should have an emergency fund investment equivalent to their 3-6 months of living expenses to be guarded in a safe place such as a bank fixed deposit.

Just knowledge of having an emergency stash can largely lessen your stress, as you have prepared yourself from crossing the line from comfort to calamity.

5. Ill-timing personal finance merger
Combining your accounts may seem quite a fascinating option for couples, but the same can also give rise to a lot of problems at the time of relationship break-up. With only one person’s name on the title of an investment in shared assets like a home or a car, can lead to chaotic and confusing split situations.

Looking at the other side of it, number of couples believe in having financial independence with separate bank accounts, keeping aside all the other legalities. Over time, merging finances may be a feasible option to go for. Till then, there is no urgency. You may consider keeping calm, until you have enough faith in your partner to be your ultimate soul-mate for life.

6. (Mis)Managing Debt:
This is one factor over which most disagreements tend to happen. Couples often overlook on things like what kind of debt are bad and how much debt can be too much to handle. Here, the married couples should pay down their debts as quickly as possible, without much delay. And couples yet to marry should ensure to protect one person’s assets from the other’s creditor.

In a relationship, no one would ever want that he/she has to seek permission from the other before taking any monetary decision. One would never want to get into a position of being a kid, where the other person (your spouse) may start behaving like your parent. You will want to have your own money sometimes in life, and just do whatever you want to. After all, it’s your money and you should be ensured of its whereabouts and management.


The author is Ramalingam K, CFP CM is the Chief Financial Planner at, a Financial Planning and Wealth Management company

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