One in three couples say finances cause the most stress in their relationship, according to the American Express Spending & Saving Tracker. While money disagreements are common in all relationships, they often peak when couples hit their 50 and 60s, according to a new survey conducted for the American Institute of Certified Public Accountants by Harris Interactive.
Why do couples over 50 and over 60 fight about money?
1. How much can we each spend on personal wants and needs – things like clothing, the beauty salon, the fishing trip, golf clubs etc.?
2. How much should we spend on relatives – an ailing mother, a child going through a divorce, the child who has lost his job, the grand-kids?
3. What should we save for retirement and what expenses should we plan ahead for after retirement?
Create a Plan
You can avoid the stress of money fights. Setting it down on paper is not easy if you haven’t regularly been working with a budget, but now it’s more important than ever. This probably requires scheduling several meetings with each other over a few weeks instead of trying to accomplish everything at once. Some touchy subjects may be covered so a little cool down period is good. However, don’t avoid another meeting soon.
The easiest place to start is listing the fixed expenses. Discuss the monthly expenses. Which ones should currently be modified? Should you prepay some expenses to save on interest? Change some regular services? Do you foresee a new car payment in the future?
Don’t forget an emergency fund. Life is full of the unexpected. Also discuss backup plans. What if one of you loses a job? What if the house is severely damaged by weather? This is a good time to review your life and property insurance, and wills.
Discuss some options for dealing with emergencies. How would you raise a lump sum of cash in a pinch? Would one of you could get a second job or go back to work, would you tap your retirement savings, or would you borrow from a bank, from family? Would you sell some stock or liquidate other assets? If one of you receives payments from an annuity or structured settlement, would you be able to sell all or some of your future payments for a lump sum of money quickly.
Once the fixed areas are clear, you can move on to savings and the discretionary items. It can be tougher to reach agreement in these areas. Try creating several scenarios as options so that each of you has had a chance to really express your views. Sometimes just seeing a scenario clearly laid out helps to foster willingness to modify a viewpoint.
You may, or may not, each need exactly the same discretionary amount, but the point is to achieve some clarity in the situation.
Get Help From Apps
It helps to get things down on paper. A budgeting app can be very helpful. Two we like:
- Budgt – Simply plug in your income and monthly expenses, and Budgt will help you create a basic budget. You do not need to sync your banking and personal information with this app.
- Mint – A highly customized and fine-tuned approach, this app hooks up all your financial information in one place.
Decide on Social Security
Married couples have a number of strategic decisions to make in order to maximize their benefits. (Single and divorced people do too.)
Be sure you are aware of your choices. For instance, the lower earner might be able to apply early as a spouse with the higher earner waiting until age 70, letting it accumulate at 8% a year. The lower earner then applies on his or her own later. There are rules to digest.
Once you have some clarity on your financial situation, it may also help to meet with a financial advisor who can review your information with a professional view.
This whole process may sound daunting but it can be done over several sessions, a bit at a time. With perseverance, it will make your next years more enjoyable and less stressful.
Share This Article!
Sign me up for Free Updates and giveaways from ZestNow.com