We make financial decisions every single day – from planning a birthday party to setting aside money for the children’s college education, among other important life choices can affect the whole family. With debt per capita increasing from $51,810 in 2005 to $67,010 ten years later, healthy financial management has never become more relevant. According to the National Resource Center for Healthy Marriage and Families, financial planning and money management plays an important role in family relationships.
*Bad Spending Habits May Lead to Divorce*
When partners disagree on how the other spends money, conflict is inevitable, the National Resource Center for Healthy Marriage and Families says. Not getting the right loan or not studying the financial impact of a
particular loan, for example, can cause disagreements and resentment especially if the financial savvy of one partner is not of the same level as that of the other. Spending too much on unnecessary items can become a point of contention, too. This is supported by the Institute for Divorce Financial Analysts based on their 2013 survey. According to the organization, financial issues is the third leading cause of divorce.
*Financial Savvy, Happy Marriage, Happy Family*
Knowing one’s rights when borrowing money and determining if the loan is truly needed reflects good financial education but couples also need to understand each other’s attitudes towards money to ensure a healthy discussion about their finances. This does not only apply to loans but is also applied in other day-to-day decisions that affect the household’s financial standing or the financial education of its more impressionable members. According to the American Psychological Association, opening a dialogue about money is healthy and involving each family member is a good idea. The APA also stresses that choosing the right words can also inspire better spending habits. Instead of saying, “We can’t afford it,” parents are encouraged by the APA to say. “That’s not how we choose to spend our money.”
*Taking Care of Household Finances*
Families need to be comfortable with money discussions as each financial decision can affect not only their budget but their future. With money being a taboo subject in 36% of American families, according to the APA, changing our attitudes towards money matters is the first step to better financial management. Households who budget and plan together are also happier than those who do not talk about money.