Personal finances can be an incredibly delicate subject to approach; money is something that some people will not speak openly about because they consider it to be crass or vulgar. How well personal finances are managed not only have an impact on your credit rating, but also have the potential to affect physical and mental health. Being left with a huge amount of debt can leave you feeling stressed, frightened and tense, and it can have a potentially devastating effect on relationships.
If one person in the relationship has a good financial history and the other does not, then it can create a lot of tension. The fact that somebody constantly seems to mismanage their personal finances can be a source of great frustration for those with a responsible financial history. They may see it as something so basic that they do not understand why someone would not be able to handle their own personal finances.
Mishandling personal finances in a long-term relationship affects both parties. Funds are often shared, and because one person is being irresponsible with money, the other person then has to suffer the consequences of his or her actions.
Being in debt and not telling anyone about it can be overwhelmingly stressful; the knowledge that you owe people a great deal of money will mean that it is always in the back of your mind. Feelings of despair and guilt are possible when you feel as though there is nothing that you can do. This can create a lot of friction in a relationship, mainly because one party seems to be on edge all the time and they will not tell the other person why. And since financial instability can have such a dramatic impact on mental health, people can end up with depression and other psychological problems.
If a couple wants to plan for future things such as holidays, homes and children, then their finances should ideally be in order. The mishandling of personal finances can mean that the couple’s long-term plans need to be postponed or stopped altogether. Many people will not want to have a baby until they are financially comfortable and unless you plan and save for the future then you will not be. Also if you have a bad credit rating then you will find it more difficult to get credit which means that mortgages and loans will be harder to access and you could end up paying a significant amount more than you should.
Mishandling personal finances does not only affect the future, but the present too, poor finances can lead to things such as difficulties paying rent which could in turn lead to eviction. Always prioritise your spending and any debts, rent, gas, electric and food should be at the top of your list.
Spending more than you earn will result in you being in debt. While this might sound like a simple enough thing to remember, millions of people all over the world still spend more than they earn on a daily basis. Mishandling your personal finances not only means that you will be worse off, but your partner could be too.