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Here's how to budget for love

Discussions on "Here's how to budget for love" in "Married Life" forum.

  1. #1
    vijigermany's Avatar
    vijigermany is offline Supreme Ruler's of Penmai
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    Jul 2011

    Here's how to budget for love

    Here's how to budget for love

    As the effects of recession continue to bite, couples are often found struggling to bring their finances under control.

    While it's a trying time for most families, young couples tend to face the heat in their relationships, since they are still getting used to handling accounts and running their house as a couple and not as single-earning individuals. Studies have shown that over 20% of all new divorces cite financial problems as a cause for their marital breakdown. While it's a fearful statistic, it's not very difficult to work out your problem areas and remedy the situation.

    Here are a few commonly made money management mistakes and expert advice on how to tackle them.

    Mistake 1:
    One big money pot:Experts say it is a bad idea to have one big money pot for all your expenses since one ends up justifying all their purchases. You can't keep having a conversation on why you spent X amount on a said product. Since you've earned your money, you should be able to spend it how you please once in a while without sitting through a jury.

    What to do:

    -Have your salary paid into your own bank account. If you don't have one, open one.

    -Open a joint bank account for the mortgage or rent, utility bills and other household expenditures. Every month, both of you can pay a set amount into it by direct debit to take care of those expenses.

    Mistake 2: Running up debts:
    According to therapists, most couples struggle when dealing with their partners' debts. Be it educational or personal, coming into a marriage with a debt or incurring one as you go on, does take a toll on the relationship. It is critical at this point for you to be as honest as you can with your partner, and it is equally crucial for your partner to accept and support you through this. If you feel like you have a problem with spending and can't get a handle on your expenses, seek professional help before things get out of hand.

    What to do:

    -Stop hiding your debts - by not doing anything you could risk losing everything.

    -Go through debts together, draw up a budget and work out what you can afford to pay back regularly. Keep in contact with your creditors.

    -Cancel everything where you're wasting money, such as unnecessary insurance and extra mobile phones. Learn to be a little frugal, it pays off in time.

    -Work out what you can sell, such as clothes and gadgets, and use this income to pay off loans.

    Mistake 3: Failing to budget:
    Financial experts suggest for all couples to keep all financial communication as upfront and honest as possible. If you start keeping money secrets, your partner is bound to feel exploited when they find out.

    What to do:

    -Sit down monthly and go through your finances together. Have all statements to hand so you know who is spending what.

    -One of the best ways to avoid overspending is to draw out cash every week and use this for daily expenditures instead of cards. You spend about 30% more when using credit cards.

    -Agree on realistic money goals for the coming month, and also for the long term. If you don't talk about money goals, one person will be splashing the cash while the other will be trying to save, and this will cause arguments.

    -If your partner slips up, don't start a row. What's important is to acknowledge the spending mistake, work out why it happened and move on.

    Mistake 4: No emergency planning:
    Experts also recommend planning in advance. Couples avoid planning for emergencies because they think it's being pessimistic. But what if you lost your job, or became ill and couldn't work? You need to plan for a rainy day.

    What to do:

    -Sit down with your bank statements, imagine that one of you has lost their job then look at your outgoings. How much money a month do you really need to live on?

    -Do you and your partner have enough savings to cover this amount, and for how long?

    -Set up a separate savings account, such as a mutual fund or SIP, and treat the outgoing as an essential. Put aside as much as you can afford at first to build up three months outgoings, then drop the amount to a realistic monthly sum.

    -If you receive any unexpected cash, remember to put some into your savings.

    -If you're lucky enough to receive a pay raise, increase your monthly savings amount.

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    rubesh likes this.

  2. #2
    rubesh's Avatar
    rubesh is offline Citizen's of Penmai
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    Jan 2012

    Re: Here's how to budget for love

    A very good informative thread.....I would like to say few things........20 percent of salary amount must go to saving account... It may be mutual funds or recurring deposit or saving account... If you receive any unexpected cash, it should go to Term Deposit.........

    -If you're lucky enough to receive a pay raise in every year,it must go to recurring deposit account......It will yeild good harvest..... Once again thanks viju....



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