How do you manage your finances in a marriage? Like a recent movie title states, “It’s complicated.” First, I want to start off by disclosing that I am not married and I have never been married. However, as a financial planner, a sister, daughter, aunt, and friend, I have seen my share of couples wading through the money waters. My business is helping people with their money, and every day couples share with me the details of their financial lives. From this experience, I have developed some cautionary tales of managing money in a household.
Before a couple digs into the details of who is paying for what, and starts arguing about how much did he spend on new fishing gear and she spent on new shoes, they need to figure out where they are trying to get to. Like any journey, you need a map to provide you with direction, but first you need to know where you are going. What are the hopes and dreams for your family? Where does each of you see your family five, ten, or twenty years from now?
Another discussion that is critical is to talk about is each of your money beliefs. Everyone has a different perspective about money: what it is used for, what it represents, how they saw it used in their childhood, etc. How people save and spend money is a spiritual decision. Buying things is not usually about the “stuff,” it is about what the “stuff” represents. For example, a person may have developed the belief that having things represents success. In this case, a measure of a successful life is seen in the “stuff” we have. Others may use money as a form of comfort; it is their security so they either hoard it or perhaps use the shopping mall as a distraction from the pain of their life. Getting to the core money beliefs of your spouse can help each of you support your family’s finances.
Once you have a plan as to where you are going and you understand how each of you operates with regard to money, the next step is to develop a realistic household budget together. What does it cost to run your combined household? (I would recommend that each person have some money that they don’t have to answer for, money they can spend on things like new shoes or golf clubs.) Once you have figured out what things cost and where the money goes, you can ask the question: Is the way we are saving and spending going to get us to that vision for our family? From this perspective, changes can be made.
Next, you need to develop a system for monitoring and discussing the money together. I know it is easier to have one person pay the bills and monitor the checking accounts in the division of labor, so to speak, but everyone needs to know what is going on. I worked with a couple where she was responsible for paying bills, but when things got tight, she resorted to putting purchases on credit cards. Over time she racked up enormous amounts of debt that her spouse was unaware of. Similarly, I have worked with widows that didn’t know anything about the finances in their household, only to find themselves in a desperate situation when their spouse died. A monthly money meeting can be useful to see the balances and expenses and to discuss future purchases and plans.
Again, it is easy for me to lay out this strategy as a bystander to marriage. I know that money discussions can be like opening a can of worms; it is better left alone. I also know that money is the cause of most marital problems and the source of most divorces. I have seen firsthand the damage that leading separate money lives can do, eventually leading to altogether separate lives. Working out the money matters in your marriage is as important as anything else you do for your marriage. Money discussions can help build trust and communication, as well as a better understanding of your spouse. Like working out at the gym, it isn’t always fun or comfortable, but it’s necessary for health and well-being.
This is valuable information, Kristi. Thanks so much for much!