What’s the Best Way to Manage Money When You’re Married?Posted: May 25, 2012
Todays post is part of a blog swap and is by Jason at WorkSaveLive and if you hop on over there, you’ll see my post. And I do hope that you go over and visit his site! I love reading his blog and was really glad that we ended up getting paired up for the blog swap. (And one day I’ll update my blog roll so that you can know all of my favorite bloggers!)
Get on the Same Page
Financial stress, anxiety, and fights are one of the top causes of divorce in the United States.
If you really think about it though it’s not too surprising: we’re all raised differently and come from different backgrounds.
It wouldn’t be uncommon if you came from an affluent family while your spouse had more of a modest upbringing. OR, your parents may have been extremely frugal (borderline cheap) whereas your spouse’s parents bought every thing in God’s creation and even went into debt to finance their stupidity.
On top of our pasts being different, each person (whether you’re married or not) has their own unique goals, dreams, desires, and understanding of how to manage money.
While you might not be able to change your (future) spouse, it’s imperative you take some time and discuss your financial situation and money management habits BEFORE you get married.
What We’ve Done to NEVER Have a Fight About Money
Many people may not believe this but my wife and I have NEVER had a serious financial fight.
Being a financial coach and investment advisor, there are some definitive things that I think help people get (and stay on) the same page when it comes to managing money together:
- 1. Understanding that everything is “OURS”
I’ve never seen more toxic relationships than when two married individuals see everything as “hers” or “his”. Managing money separately creates for a multitude of problems in a relationship whereas managing everything jointly forces communication, admittance of unnecessary spending, and a sense of unity.
- 2. Using and Working Together on a Budget
Creating a budget TOGETHER allows for a clear understanding of (1) how much money is coming in, (2) how much money is left after the bills are paid, and (3) how much money is left to be spent on lifestyle and goals.
I’d venture to say that this practice alone has caused our marriage to grow and flourish more than any other. It allows us to talk about what the month is going to look like, and we’re able to plan out our finances BEFORE the month happens and BEFORE we spend all of the money.
Furthermore, we each know how much money is allocated for groceries, eating out, entertainment, clothing, etc.!
- 3. Compromise
I mentioned earlier that we’re all different. Despite my wife and I having relatively similar personalities, there are times where we have differing opinions on where money should be allocated.
It’s important to lose some battles so you can still win the war.
If I always have a heavy hand and never seriously take my wife’s concerns into mind then none of this would work. In our house my wife and I have an equal say in all things; sure, at the end of the day we have to come to a decision even if we disagree, but it’s EXTREMELY IMPORTANT that we both have a fair say in the matter at hand.
- 4. You Must Have Some BLOW Money!
I am undoubtedly the spender of our family and early in our marriage I discovered quickly that it’s NOT okay to spend all of your “families” eating out and entertainment money on going golfing or attending sporting events with your friends (while the wife works or stays at home).
My wife and I have $90/month allocated for eating out and entertainment…well, I was known for spending 60 of it on going golfing a few times a month with my friends. How do you think the wife felt about that when it was time for the both of us to go out on a date?
So, I highly encourage every married couple have something that I call “Blow Money” (aka. personal spending money). My wife and I get the same amount of blow money every month to spend on whatever we want! This allows for some freedom while still maintaining accountability to the family and to your spouse.
I will add that I believe it’s extremely important for the amounts to be exactly the same, regardless of spending habits or behavior. So, even though I’m the spender and I spend my blow money in the first 2-3 weeks of the month doesn’t mean that I should get more.
- 5. Grow up!
I never get more annoyed than when I hear a husband or wife that get upset when their spouse tries to limit their spending. Have you ever really thought that it might be for your own good? Have you ever thought that it might be that you’re just a big child running around in an adult’s body?
If you’re struggling getting on the same page with money, I’d quickly guess that one of you have yet to really grow up.
How We Handle Conflict
Even though we’ve never really had a financial fight, I don’t want to sit here and paint a picture that is all roses and orchids.
The reality that we’re all different will eventually play itself out over time. Despite the fact that my wife and I have very similar goals and dreams, it doesn’t mean there aren’t times where we disagree. This disagreement typically rears its head during periods of our life where there are MAJOR decisions to be made (buying a new house, changing jobs, etc.).
While I can’t say that I have the solution to everybody’s problems, here are a few things I do to help resolve conflict and come to an ultimate decision:
1. Understand that I have to lead. This isn’t a gender based thing, but the fact is that SOMEBODY in the relationship has to make the ultimate decision. If you both have an equal say and you both disagree then you’ll never get anywhere, so somebody has to step up to the plate and lead the family.
2. Take a breathe and give it a rest. When we disagree on a topic, especially one that I’m pretty passionate about, I’ve learned that I have to allow things to dissolve for awhile and think about things.
In the heat of the moment, emotions are high and you can make rash decisions and comments, so I’ve found it’s best to get my wife’s opinion, try to understand her point of view, and then let that sink in over the period of a few hours or days.
3. Understand she’s been placed in my life for a reason. Being the financial coach that I am, and being an overly motivated and self-driven person I know that I can be a little extreme at times.
I firmly believe that my wife has been put in my life to help me be the best ME that I can be, so if I don’t allow that to properly take root then I’ve limited a blessing that has been placed in my life.
Recently I had this insane idea to sell our $160,000 house (which we love) and buy a duplex for half of the price. I was so motivated that I started looking for places and making plans without even really having a serious conversation with my wife.
While she was initially on board, her feelings started to come out in the days that followed and I began to realize that I was going a little overboard. Instead of going off the deep-end and probably getting ourselves into a situation we wouldn’t have liked, I took my wife’s thoughts to heart and realized that we could still downsize AND also find a place that we’d both be happy living in for the next 5-10 years.
Most people acknowledge that two heads are better than one, and if you and your wife learn to work together and be a true “team” then this is definitely the case!
For many, managing finances together seems like a daunting task, but if you work through it together and can both come to the table as grown-ups, then managing finances as “one” will change your marriage in more ways than you could ever imagine!