With everything we’ve covered from self-love to finding love in a digital world, setting boundaries, communication and more, we feel it’s time to talk about money. Did you know that recent research shows that financial problems are the third leading cause of divorce?

Money seems to be a subject matter a lot of people shy away from. Talking about money is usually considered a private matter and those who dare to do it publicly are often considered braggadocious. When it comes to your household finances, the good news is it doesn’t have to be a public matter unless you hold some sort of public office that deems it be made public. One does not have to be an accountant or a math genius to stay on top of their household finances. You just need to understand your incomings and outgoings whether it be on a combined basis or singular one as we’re very well aware that not all couples maintain joint finances.

Not too long ago we stumbled upon an interview with Kim Kiyosaki, author of Rich Woman: A Book on Investing for Women, where she talked about how a lot of women still do not have an understanding of their household finances, oftentimes leaving them broke and in some cases bankrupt when their partners pass. Which is why she continues to educate women on the importance of understanding money. 

Below are some things to consider when it comes to your household finances. We are not financial advisers but merely providing talking points to encourage the conversation.

Bank Accounts

It is important to decide early on if you’d like to combine your finances or maintain individual control over your finances. Either way, having a separate bank account to tackle your combined household bills should be considered. That way you have an idea of the running cost of your household while you both take responsibility for it.

Incomings and Outgoings

You need to understand how much you have coming in, usually monthly earnings/salary or other income, and then weigh it against your household costs to ensure you can keep up with your financial obligations. Failing to understand your income against cost can result in overspend and poor planning. As the saying goes “he who fails to plan, plans to fail”.

It’s been said that the more you earn, the more you spend. And sometimes that spending can eventually outweigh your earning capabilities thus putting you and your household in a position of financial discomfort. All you have to do is ensure that you are earning more than you are spending. The only way to do this is to know what bills you pay and what you earn as well as your household income. Then you can prioritise on the essential things that keep the household functioning. The burden of leaving the understanding of the finances to one partner needs to stop as it breeds ignorance and complacency.

Savings

You can only get to this point after you’ve understood your earnings and expenses as discussed above. There’s no need to stress the importance of savings. It is part of the planning process. Either saving for holidays, school fees or even buying a house. You can save for personal and household goals but in order to do so, each party needs to take financial responsibility and act accordingly. You have to have discipline in order to save.

You might even find that you can’t afford to save for anything at the moment. But in understanding your finance, both personal and that of your household, you can begin to make financial decisions that can benefit you in the long run. You can decide to cut costs that add no value to you or your household, consider other streams of income and even find cheaper rental properties or household service suppliers. Basically, there’s always room for improvement when it comes to the way you manage your finances.

Life Insurance

This is something that should be considered especially if there’s only one person earning in the household. Depending on the policy you go for, the return on a life insurance policy could mean your mortgage gets paid off, as well as other key bills. It is a way to bring about some sort of financial security for you and your loved ones.

In Summary

Taking responsibility for understanding your household finances should fall on all parties. This can be achieved by paying attention to your incomings and outgoings which will allow you to plan for your financial future together.