Removing the roadblocks to financial harmony
If you want to learn how to deal with money in a marriage, then this is the article for you. Good marriages are built on a healthy amount of sharing and compromise, which makes money a sore subject.
Why? Because sharing money is measurable, unlike anything else you share. It has a clear, quantifiable value based in work done independent from your partner. With money, you can actually put a number to how much each spouse gives and takes. That quantification makes it hard to ignore. Money dredges up trust, control and independence issues that you may have avoided in other aspects of your marriage.
It’s no secret that financial disputes are a leading cause of divorce, and it’s not a mystery why. Yet, time and time again, couples are caught in the same financial traps, having the same arguments that led other couples to divorce. To divorce-proof your marriage, couples should know how to handle these arguments when they arise.
Try implementing these solutions, and don’t let financial roadblocks become a dead end in your relationship.
Spender vs. Saver
The problem: You take issue with your spouse’s spending. He spends too much, and she is too stingy, or vice versa.
The solution: You absolutely, positively need a household budget.
Together, you should decide how to share, invest and spend your incomes. Allot an entire day to design your financial plan, because it will take that long, if you do it right.
Even if one of you is more financially savvy, this is a problem you tackle together. You will learn invaluable insights about your partner’s fiscal priorities when you budget as a team. Plus, budgeting is not always easy, and it helps to have some support.
To being, establish your discretionary spending, or the money each spouse won’t be sharing. Keep it fair, and try using a percentage. For example, maybe each partner keeps 5 percent of their monthly income to themselves, but pools the rest with their spouse’s income.
Now, calculate your combined monthly income. If you’re unsure, use projections. Subtract necessities like utility payments, groceries, gas, etc. Be honest with yourself while setting these figures, and be prepared to make compromises. If your spouse insists on designer clothes, then they should be prepared to sacrifice in another area.
Next, plan for emergencies like job loss, car repairs or medical disasters. You should find a number you both agree upon, but typically, putting aside $100 per month is a safe practice. Take into account your insurance coverage and other safety nets.
And what about a family? Are you serious about having kids? Or perhaps you already have them? Either way, you want to plan for your family’s future.
If kids are not on your radar, then set goals for yourselves. Maybe it’s a new house, or a vacation, but whatever it is, start working toward it.
Rework it as needed. Setting monthly budget meetings with each other is a great way to stay on track. In general, a shared budget will alleviate issues with spending habits because each person knows exactly what is and is not permitted. Also, working toward, and achieving, common goals will foster respect and appreciation of one another.
Keeping your independence
The problem: Feeling like you’ve lost all control in your finances.
The solution: Sharing a household budget does not mean you have to share a bank account. Unless you feel strongly about a shared bank account, avoid it.
As long as the agreed-upon budget is satisfied, then there is no harm in keeping your money separate. It is an easy and effective way to restore your sense of financial independence. It ties your name to your money and provides a concrete form of ownership.
Also, respect your spouse’s discretionary spending. If you agree upon how much money is discretionary (and you should) then don’t judge them for how they’re spending it. If your spouse wants to spend all their independent money on lottery tickets, let it go even though you think it’s a bad decision.
If you don’t have a budget (tsk, tsk) and you feel your spouse is monitoring your every penny, then it’s time to— at the very least—set a notification limit. This is the amount of money you can spend on a single purchase before you have to run it past your spouse. Anything below the limit is an insignificant purchase and shouldn’t require approval.
For example, let’s say your notification limit is $400. Any purchase you make that’s $400 or more will need approval from your spouse. Anything less than $400 is free game. This way, you’re on the same page and held to the same standard. If you set a limit, stick to it. Trust that your partner will tell you when the limit is reached.
The problem: Your love isn’t being totally honest about their money. Maybe it’s a secret credit card, or maybe it’s a complete lack of sharing money, either way, the other partner feels slighted.
The solution: It goes without saying that you shouldn’t lie or keep secrets from your spouse. Finances are no exception and should be kept transparent.
If your spouse refuses to offer details about their expenses, then they’re being unfair to your relationship.
You should have a system in place that holds each of you accountable. Keep bank records in a lockbox that you both have access to, or have monthly meet-ups where you confess major expenditures.
Usually, you can tell if your spouse is spending excessive amounts of money. If you ever find yourself wondering “How did he/she afford that,” then it is a red flag. Likely, your spouse has a hidden cash flow they aren’t telling you about.
Spouses who consistently hide money are good candidates for a shared bank account. If they are prone to abuse their financial freedom, which can hurt both of you, then you should seriously consider combining accounts.
Hiding money stems from a lack of trust, and can be indicative of financial baggage. Because of their upbringing, your spouse may have deep-seeded fears or insecurities surrounding money. Try talking in-depth about their relationship with wealth to unearth the true cause of their behavior.
The problem: One spouse makes significantly more than the other. The low-income earner feels guilty and the high-income earner feels resentful.
The solution: Unless your household is struggling to stay afloat, then you shouldn’t feel resentful about how much your spouse makes.
If you are feeling bitter as the breadwinner—even though your household is financially stable—then it may be because you’re unhappy in your career. At an unfulfilling or high-stress job, your salary becomes the sole motivator to continue working. Naturally, you will feel very possessive of that income. Be honest with yourself—is your resentfulness about the money or is it about you? Projecting your professional unhappiness onto your marriage is not fair.
But perhaps you are struggling to keep financially solvent. First, you need to have a discussion about why your spouse is working a low-paying job. Are they following a passion? Do they lack training and education? Were they laid off? How do they feel about their measly earnings? Answering these questions is an important first step.
If your basic needs aren’t being met, then it’s probably time for the low-earning spouse to step up their contributions anyway they can. When your household is at risk of going under, it is a dire situation. You should avoid going into debt if possible.
Another possibility is you simply have different expectations. As a high-income earner, you want a budget that allows for expensive restaurants, luxury cars and other indulgences. As a low-income earner, you may be fine with frozen dinners, used cars and bare necessities.
The most important step is empathizing with your spouse’s needs. Breadwinners should understand their spouse may not place a high value on money and material things. Likewise, low-income earners should respect their spouse’s desire to reward themselves for their hard work. The key is to figure out a compromise that works best for you.
Remember, even if you make more money, it shouldn’t matter. The key is running a successful household in which you are both happy. So hopefully you’ve learned more about how to deal with money in a marriage.