Finances

Taking control of your finances: 5 financial mistakes to avoid

Having only a joint bank account

What a mistake! When one spouse makes a splurge on him or herself and takes the money from the joint account, the other spouse may find it superficial in regards to family expenses. However, if both spouses keep a personal bank account, they can splurge without having to justify themselves. The joint account should be used for rent, groceries, monthly bills, etc. The personal accounts should be used for personal needs.

Splitting the bills equally

The couple's’ situation does not always allow for everything to be split equally. If both partners had small salaries in the beginning of the relationship, it might have been the only way to go then. When the spouses’ incomes change, it's important to rethink each person’s contribution. For example, if Mrs.' income represents 55% of the family income, she should be responsible for 55% of the spendings.

Finances are a taboo subject at home

We must avoid situations like: “I think he spends too much, but I don’t want to say anything” or “I find her much too frivolous, but if I tell her I’ll hurt her feelings.” Everyone’s relationship with money is different, so it is normal for both spouses to see things differently. What isn’t normal is for couples not to talk about finances to avoid hurting the other one’s feelings. Even if it is not easy, it is important to talk about money with your spouse. The best way to talk about it is to redo the family budget and take into account every little or big splurge. This realistic view of your spending will enable you to make decisions. The Canadian banker’s association offers a budget example to start with. Many programs are also available to help you achieve this task.

Managing finances alone

It is normal for one of the spouses to handle the finances, either because they’re competent or they enjoy it. However, family finances should not rest solely on the shoulders of one individual. Finances are too heavy a load to carry alone, especially if you’re in a relationship where money is taboo and there is only a joint account!

Spending and getting into debt

The arrival of a first child is a great way to get into debt! You want a house to welcome the baby, new furniture, a bigger car and everything else that the baby will need. It's said that a couple’s expenses increase by 30% when they have a child… If you overspend on a house and everything that goes with it, your finances will suffer and debt will inevitably follow. The person managing the finances is stuck with the burden of proof (is the budget well managed or not?) and the other spouse is left in doubt (is the budget being managed properly?). If both spouses agree on a monthly sit-down to talk about finances, or take some time to do an update and take a look at bills, the pressure won’t be so intense. That’s a promise!


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