If he thinks a new speedboat is a “necessary living expense,” and you think you should reuse paper towels to save money, neither one of you is demonstrating good money management skills. Getting on the same page and developing good money managing tools together can help you avoid an often touchy relationship issue.
Regardless of how much or how little income you have, tracking where your money comes from and where it goes is a strong money management skill. A budget can help you save money, manage your bills and control your debt load. All these behaviors add up to a strong credit rating and buying power down the road -- something you’ll be glad for when it's time for that first house or a new car. Decide how much you need to set aside for certain expenditures every month to cover your bills and build your savings accounts. Even if you just use a simple spreadsheet program or paper ledger, keeping a budget of monthly expenses -- and sticking to it -- will help you remain in a strong financial position.
It's not easy thinking about the future when you're young and enjoying life. After all, it can be tough to put off a Caribbean vacation to set money aside for the college education of kids you haven't even thought about yet, or to think about how much money you need to squirrel away to retire comfortably. However, getting into a regular savings routine is a mature financial habit that can serve you well in the future. Enroll in employer-sponsored savings plans such as a 401k and put in the maximum amount if you can. Open personal savings accounts and make a commitment to putting in the same amount each month or pay period. Having a nest egg to fall back on for both planned expenditures and emergencies can help you avoid financial stress.
Let's face it, financing what you want today is often a lot more attractive than saving up for something that it may take you years to afford. However, part of being financially mature means a willingness to embrace the idea of delayed gratification. If you really love the idea of a vacation home, but would stretch yourself too thin to get one right now, put it off until you're in better shape to afford it. Think twice about how much you really need that must-have item.
Couples tend to argue about financial matters more than any other issue. Open and honest communication about finances and financial expectations can help you establish a healthy relationship and a good attitude toward one another and toward money. Both you and your significant other should be on the same page about how you handle money, especially if your incomes and expenses are co-mingled.
Living Within Your Means
Just because your mortgage lender and real estate agent say you qualify for a $500,000 home loan doesn't mean you can or should buy a $500,000 house. Living within your financial means is a significant financial management strength. If you stretch your income to the limit, you'll always be living from paycheck to paycheck, and if you lose a job, get sick or have an unanticipated emergency, you could dig a black financial hole that will be difficult to get out of. It's better to buy less house than you need and save money than to buy more house than you need and put yourself under a lot of financial strain.
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