Adapting to the 'Great Recession'

What we are living through today may be a once-in-a-lifetime economic downturn. And chances are this "Great Recession" has created turmoil in your marriage. In a recession of this magnitude, tough decisions often need to be made. But smart couples who adapt well keep one eye on the future and respond quickly to the short-term realities. Here are tips that work equally well in good times and bad.

Share the chore of money management, regardless of who has been in charge of the finances in the past. This job may be more than one can handle and the support of putting two heads together can give you clarity about the issues. After listening to each other’s input and being open to compromise, make your major money decisions together. Take small or large steps, depending on your particular circumstances. At this time, taking out new credit cards should be an option rarely used as this is, in essence, living beyond your means. And that contributed to the financial mess in the first place. As difficult as it may be, commit to a simpler lifestyle.

The most important money management skill is creating a budget, enumerating what needs to be saved and what can be spent. Set long term financial goals, as well as short term objectives that will take you in the direction of saving. Any deviations from the budget should be discussed and mutual decisions made. Conventional wisdom speaks to having an emergency cushion – that is, enough savings for living about six months in the event of job loss or extended health problems.

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Relationships and Troubling Economic Times

Troubling economic times like these can take their toll on relationships. You may be worried about ending up like Brenda and Eddie, the couple in Billy Joel's song, Scenes from an Italian Restaurant:

They started to fight
when the money got tight
and they just didn't count on the tears.

But unlike Brenda and Eddie, who 'got a divorce as a matter of course,' that may not be an option. Many couples can't possibly sell their home in a depressed market, pay steep lawyers' fees or make ends meet without sharing expenses.

Of course, a perfect marriage would be free of financial controversy. But during this economic crisis, the reality is that you need to learn new money management skills and face tough financial decisions – while at the same time making your relationship work. Not an easy task. We'll be sharing practical tips all week that will give you and your marriage a better chance.

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