Managing Finances Jointly

Finances are stressful…and complicated. Your personal finances sustain your lifestyle, fit into your value system, and inform your decisions. No two financial situations are totally alike. It makes sense, then, that finances are a common stressor in marriage.  People bring their finances into their marriage, usually resulting in two different methods and opinions on managing money. It can get fiery as these two views compete for the throne of “How things will be done in our household.” As a result, financial stress is the third most common cause for divorce in the US.

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The number one method for reducing financial stress in marriage has nothing to do with technical financial planning, strategies, techniques, tools, tips, advice, or guidance. It comes down to communication. Even if you do not have financial stress in your marriage at the moment, open communication protects you from building tension. Put simply, you cannot read your spouse’s mind. For some reason, our culture considers discussing your finances with anyone somewhat embarrassing or awkward. However, like any other topic, bringing finances to the table with your spouse and seeking to understand their view will be beneficial.
 
The Process
If this is the first time you are attempting to have a calm and honest conversation about finances in your marriage, it might be difficult to know what to say or where to start. What does it look like to get on the same page financially? Schedule some time to sit down at a restaurant or at your dinner table, and follow this plan to open up the financial conversation:
1.) Where do we come from?
2.) What are our tendencies?
3.) What are our common goals?

Where do we come from?

Whether we know it or not, our past shapes who we are today. A typical question that I ask new clients is “What is the first money memory that you can remember?” This can reveal some of your deeply rooted feelings and beliefs toward money that were instilled by your family of origin. For example, seeing your parents argue about finances might drive you to earn more than they did in an effort to relieve some of the pressure. Maybe you remember saving for a new toy when you were young or your first car as a teen. This might shape your views toward saving, purchasing, and debt. Here are some talking points:

What is your first money memory? Can you see it shaping your current financial thoughts?

How did your parents manage their money? Do you feel they did it correctly?

How did you manage your finances when you were single? Did you feel like this method worked well?

How have we been managing our money since getting married? What is working? What needs improvement?

What are our tendencies?

You probably understand your money tendencies and leanings to some extent. You probably know if you are spender or a saver. You likely know what financial topics you try to avoid and what topics are your strong suit. How well do your know your spouse’s tendencies? Not just the negative tendencies but their strengths and passions in the area of money. Are they exceptionally generous? Do they excel organizing a budget? How do you think they would like to manage finances? Our pastor likes to remind us that we should be experts in our spouse’s strengths, not just their flaws. As with all conversations, it is extremely important to just listen to your spouse. There might be a time to bring up negative tendencies you think they may have, but first, just listen. I use several surveys with my clients that pinpoint their financial tendencies. Taking a few of these together may make for a fun conversation and deeper insight into your spouse’s views. Some other questions to consider together are listed below:

Are you are spender or a saver?

How do you feel about having debt?

How do your feel about investment risk?

Who currently does what roles in regard to our finances?

Are there any things in our finances that are worrisome to you?

If you are a “non-earning” spouse, how do you feel towards that? How about if you are the earning spouse?

What are our common goals?

After getting a good idea of both people’s backgrounds and current beliefs and tendencies, it is important to discuss financial goals for the future. Without a unified picture of where you would like to be in the future, tension will arise over the slightest differences in destinations. Your common goals include not simply how much money you would like to have at “x” point in time, but also what you find important in how you manage your money.  For example, “We would like to give away $500,000 in our lifetime.”  “We would like to retire by age 60.”  “We want to buy our first home in the next three years.” “We want to teach our children how to handle money wisely.” If opposing goals come up in conversation, discuss some of the reasons why that is a goal for one of you and not the other. Consider thinking and praying about the topic and writing it down for further, on-going, financial conversations. Here are a few questions to get you started:

Where do you see our family in 3, 5, and 10 years?

How will be ensure that we are making wise financial decisions?

Where do our financial goals differ?

How are we going to keep open communication in our finances?

What’s Next?

Open conversation is important, but there also must be unity in decision-making. Unity in decision making does not mean that both spouses are 100% involved at every minor decision that touches your finances. This is where you can have the most variability in how your household will run. In some cases, one spouse might prefer to be minimally involved and live inside mutually agreed upon guidelines. My wife and I work in this capacity. I enjoy planning the details of our financial situation, and Lindsey likes to know that if we continue doing or spending “x” then our situation will work out fine, and if something needs to change, she trusts me to discuss it with her. This works well for us, but it is still important to have ongoing communication concerning goals, spending, saving, and current financial status. While this works for us, it is not the only way to go about it.

Decide who will be in charge of what. I remember meeting with a newly married couple one time that skipped this step. They bought a house and decided not to escrow their property tax payment. When the bill came in the mail, they both thought the other person would pay it. Long story short, they were hit with a late payment penalty, missed out on a financial planning tax opportunity, and encountered a lot of relational stress through the process. Figure out who will be in charge of the bills, your budget, taxes, investment accounts, bank accounts, insurance, and all of the smaller areas of your finances that involve an occasional “once-over.”

Don’t go at it alone. If we, as a culture, chose to open up about what has been so taboo in the past, many, many Americans would find themselves in a much better place than their current situation. Decide who will be the third leg to your stool. This might be a financial planner, an older couple, a counselor, etc.  Adding a third-party who can advise you on new approaches and hold you accountable bolsters your ability to maintain open lines of communication with your spouse and achieve success.

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