Every responsible adult and partner should have a family budget. Managing the household finances is often put on the shoulders of one partner of the family rather than both. While this is generally not an issue, it can become one when the partner not involved in the household finances needs to take over. This need to get involved can be because of illness, time, and other issues that draw the need for involvement.
While it is strongly suggested that both partners be equally involved in the household finances from the beginning, that is not always how it goes, and now one partner will need to be caught up to financial speed. You need to address five issues with your partner before handing over the household finances’ responsibility.
Financial Communication
Communication with your partner is key overall with any relationship. However, even if one partner is taking on most of the household finances’ responsibility, financial communication needs to occur. If this has not been done throughout the partners’ joining, it will need to be the first conversation you have, leading to the shifting of responsibility. Both partners need to be keenly aware of the current state of household finances.
Shared Goals
If you have not already done so, now is the time to sit down and figure out your financial goals as a couple. What do you want to accomplish financially, including short-term and long-term goals? These goals could include significant purchases such as vehicles and a home. It could also include luxury items such as a boat or an expensive vacation and retirement, nest egg, savings, and future investment goals. The most crucial thing in this part of the discussion is that all the shared goals are agreed upon before moving on to transfer power.
Household Budget
At this point, the household budget should be a well-oiled machine and no surprise to any household member if it is being followed. But for transition purposes, you should select any past budget to inform your partner of the budget’s fine details. These are the essential points of the budget that need to be discussed and understood.
- Savings goals
- Investments
- Monthly bills
- Monthly Income
This budget meeting is another way to discuss money-related problems and make any changes to the household budget concerning both partners.
Spending rules
In most partnerships, one partner spends more than the other. There are some cases where both partners are big spenders or thrifty, but this is rare. If spending rules have not already been established, this would be an excellent time to develop them together. If both partners create the household’s agreed-upon spending rules, it is more likely to stick to the rules. There are no hard and fast rules except for two. Don’t spend more than you earn and keep credit card usage to a minimum. Outside of those two rules, you and your partner can decide what is best for the household.
Debts
It is not uncommon in a partnership for one or both of the partners to hide personal debt. Most people find debt embarrassing or worry it will anger their partner and cause problems in the relationship. This transitioning of responsibility is a great time to lay all debts out on the table and plan together how to overcome it. The important thing is not to be judgmental but rather to be kind and merciful. You are partners and in this together for better or worse.
Shift a Few Responsibilities
If one of the partners has not been involved in the household finances, it may be in their best interest to only shift one or two financial responsibilities to them until they can take on more. The best idea is to both remain involved in the household finances for the duration of the relationship. But if this shared responsibility is not possible, and the transition does not need to be completed immediately, make the transition slower to make the shift seamless.
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