by Jennifer Wallis
While couples may spend more than a year planning every detail of their dream wedding, they may spend far less time actually preparing for the marriage itself. After the last rose petal falls at the wedding reception, real life begins and unfortunately many couples find themselves unprepared to deal with their finances.
* * *
While they may have discussed the color of the flowers that would grace the aisles, they may not have talked about their attitudes when it comes to managing money. With financial issues being cited as one of the leading causes of divorce, it’s important to plan ahead to learn to communicate and compromise. If you are planning to get married, a conversation about money is vital to encourage open communication about this sometimes controversial topic. If you are already married and money is an issue, it’s never too late to start better financial habits in your relationship.
Depending on how we were raised and our current environment, values vary widely when it comes to money. First, it’s important to identify each other’s attitude when it comes to finances. If you are conscious of your differences, it will be easier to foresee any challenges that may lie ahead. If you know that a conflict may arise, you will be much better equipped to deal with it when it happens. Do you like to save money while your spouse likes to spend every dime? Is one of you very open about finances while the other thinks it should be a secret? Is one of you opposed to credit card debt while the other figures that they will always carry a balance? How did you handle your finances when you were single?
Once you have identified each other’s tendencies when it comes to money, it will be easier to talk about how to handle your finances together. Compromise is the key. It is a safe bet that money will be an issue at some point in every marriage. If you are aware of your differences, it will be easier to deal with conflict when it arises. Here are the steps to take to get started:
Discuss your financial attitudes, goals and values. Be honest and let your spouse know how you feel about money. Don’t tell them what you think they want to hear. Be honest! Find areas where you differ and figure out how you will deal with conflicts. If you discover how you will compromise ahead of time, it will diffuse the situation when you may be arguing and emotions are running high.
Review each other’s income and employment patterns. Decide if you will discuss any job changes with each other.
Review each other’s credit reports. Be aware of past issues, work to repay any outstanding debts and start building a positive credit history together.
Develop goals and a timeline for major purchases. One person may plan to buy a new car every couple of years while the other will drive a car until the wheels fall off. Talk about when you will purchase these items and compromise if you have different opinions.
Put together a written budget that you can live with and stick to.
Consider setting up an “extra money” allowance. Once you are sure of what your take home pay will be and your budget, you should be able to identify how much spending money will be left over each month. Decide on a comfortable amount and split it evenly. Let your spouse do whatever she wants with her spending money. This will resolve the fighting about how you each spend or save money.
In order to begin open communication about money, try to answer some of these questions yourself and ask your significant other. Then compare your answers.
* How did your parents handle money? Did one of them handle the finances or did they share the responsibility? Did they disagree about money?
* How do you feel about debt? How much debt are you comfortable with: 1) none, 2) car and house only, or 3) car, house and consumer debt? Should we have credit cards or not?
* Do you live on a budget? If we worked together, would you be open to trying that?
* Do you have money in savings? How much of your income do you plan to save? What is the lowest amount you are comfortable having in a savings account?
* Do you ever spend money when you shouldn’t? How disciplined are you when it comes to buying things you want? Do you buy them on credit or save for them?
Even if you plan ahead, conflicts will still inevitably come up. Here are a few money tips to help you minimize the disagreements.
Joint and separate accounts:
Consider having one joint account for household expenses and also consider each of you keeping a separate account. Decide how much each of you will contribute to the household account. This may be a percentage of your income. If he brings in 60% of the household income, he may contribute 60% of the household expenses.
Stick to the facts:
Keep emotions out of it and discuss facts and figures instead.
Avoid pointing the finger:
If both of you are spenders, sometimes it can become a contest of who can spend the most. If he buys an expensive stereo, she may feel justified to go on a shopping spree, just to get back at him. Couples must realize that this type of competition overspending is just causing more problems. If one of you makes an impulse purchase that breaks the budget, learn from it and move on. Your entire household loses when you spend out of revenge.
Share the work:
Divide financial responsibilities evenly so that neither of you feel that you are shouldering the entire burden. Managing the finances should not be a one-person job.
Compromise, compromise, compromise:
If one partner really wants to buy something that is not part of the plan, talk about it to see if it’s possible or if it will have to wait. Working together and adjusting plans when necessary is the only way to come to an agreement.
Seek budgeting advice:
If you and your spouse find yourselves at an impasse when it comes to money matters, sit down and discuss your situation with a credit or financial counselor. The counselor should be able to walk you through the practical budgeting process and help diffuse any emotional issues.
While money can be a very volatile subject in relationships, it doesn’t have to be. If you realize that at some point it will be an issue and you plan ahead for those times, it will be much easier to resolve. The most important thing to keep in mind is that honest communication is essential. It’s easy to fall into the trap of blaming each other for different financial attitudes. How your parents dealt with money, the way you were raised and your personal experience with money will all color how it makes you feel.
If you recognize those innate differences and learn to deal with them, you will never lose sight of the fact that money is just an object. While it is necessary to live, it isn’t worth losing a relationship.
* * *
Return to Budgeting Articles
Copyright © 2005 by Jennifer Wallis. All rights reserved.
