Most people struggle to manage their own finances. Getting married and having to manage expenses as a couple is even more difficult. It’s no wonder so many couples face financial problems.
One of the best ways to keep your finances in order will be to have separate accounts for discretionary spending, a joint account for expenses, and a system of organizing the different financial commitments in your life together.
The husband should have his own account and the wife should have her own too. The money in these accounts will be for discretionary spending and both partners should be able to spend as they wish without judgment and blame from the other.
However, 2 rules apply here:
- Neither should take on credit card debt or use lines of credit to pay for small purchases.
- Money should be deposited into a joint account to pay the monthly bills and expenses first. Only the leftover money should be used for discretionary spending. In this way, both parties will be spending responsibly after taking care of the important commitments first.
You’ll want to get a bunch of paper files or folders to organize your bills/expenses. Alternatively, you can use an app or software to help you. Generally, the good old filing system is simpler and more straightforward.
However, as more banks go digital, you might have to print out your bank statements and so on. That’s fine. This is one area where you don’t need to worry about saving paper.
You must have a folder for each of the categories below…
- Retirement accounts In this folder, you’ll have your plans to save for retirement and so on. Both partners should contribute here. Keep track of your 401(k), IRAs, etc. in this folder.
- Insurance Your health insurance policies, receipts, premium details, and so on should be kept in this folder. You’ll know exactly how much health insurance and coverage you have.
- Savings Print your savings statements and file them here. If you have money in time deposits (also known as a certificate of deposit), you should have the details here. Your emergency fund details should be here too.
- Household expenses Keep track of ALL your household expenses and trim them where possible. For example, if you see that you’re paying for cable channels every month, but both you and your spouse only watch Netflix and Disney+, you can cancel your cable and save money.
- Investments If you invest in stocks, mutual funds, real estate investments, etc. keep all the details in this file folder.
- Estate planning In your later years, you may wish to make a will or living trust. The details will go in this folder.
- Debt If you have credit card debt, student loan debt, personal loans, etc. all details will be filed here. In this way, you’ll be able to refer to the bills easily and come up with a solid debt management plan.
- Social security Details about your social security go in this folder.
- Tax returns Everything about your taxes goes in here. If you’re hiring a CPA, he/she will find it much easier when you have such a folder. In fact, this method of using different file folders makes things very organized for them to calculate the taxes you owe and so on.
- Children’s accounts Any financial matters related to your children go in this folder.
Here’s where we stand…
Now that all your finances are organized into different folders, it’ll be much easier for you to look for bills, etc. Update these folders every month to keep them current.
It may look like a lot of folders, but once you’re organized, you’ll see that it’s only a couple of folders that are regularly updated. The rest just keep things in order until future needs arise. Use this method to keep your finances in order. You’ll be glad you did in the future.
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