"Money has more to do with emotions, family history, and personal expectations than it does math. You could spend a lifetime exploring and applying the non-financial aspects of money and it would be well worth the time. Talking about your feelings and expectations before taking a look at the numbers can do several great things for your relationship." – Derek Olsen of Mintlife
Next weekend my husband and I will be attending the wedding of a dear friend of ours and I am so excited to witness two really great people join in the best adventure I have yet to experience. For the longest time, money has been on the list of things you try not to talk about in polite company, but it is my personal belief that taking the time to sit down and talk about your finances periodically with your spouse can really benefit the health of your marriage. Not only does it help both parties communicate their spending habits to each other and align their goals, but it also assures that both spouses understand the financial state of the family in the event that something happens to the other spouse. I’ve heard too many unfortunate stories where one spouse passed away or left and the other spouse was completely in the dark about where the money was invested or who to call. While it can be incredibly intimidating to sit down and talk about who is spending what and where you can save, consider the following tips and tricks that may make the conversation easier and hopefully productive.
As the aforementioned quote alluded to – money isn’t just about math, but it’s about emotions. Before you even begin talking about the numbers, lay out your expectations. One of the best conversations my husband and I had leading up to our wedding was a conversation about shopping habits and our expectations for ourselves and the other person. If you can understand how you and your spouse think when you spend money, I believe that it helps you better understand how they spend money and why they spend it that way. I like to buy things that are pretty. My husband likes to buy things that are useful. Understanding these habits help us understand how best to budget our money to make sure both of us are on the same page. Take some time to talk about how your family spent money when you were growing up and how you feel about spending certain sums of money. By taking the time to communicate where each of you are at and how you feel about money helps take the pressure out of the conversation.
Create a budget. Together. I cannot emphasize enough to my clients the importance of having a budget. Having a budget prevents you from making impulse buying decisions and it helps you save for your goals. This is the hardest part of the conversation (and the most likely to cause arguments), but the long-term benefits of having a budget that you both created, and hopefully therefore believe in using, are immense. One great idea that I have heard when it comes to creating a budget with your spouse is creating his and her “buckets” for spending. For example, I know a couple that has delegated $100 to each spouse every month to spend on whatever they want. He spends his on outdoor equipment and she spends hers on clothing and because it is a “no-questions-asked” bucket, they avoid tense arguments about whether to spend “their” money on her things or his things. Another great idea is to create family goals. When you have a mutual goal like a family vacation or a first home purchase that everyone can contribute to and benefit from, everyone is more likely to save for that goal.
Have an “emergency contacts” list for your money. This is especially important if one spouse does the majority of the household finances. Sit down together and list out all of your accounts, where they’re located, how much is in each one, and who to call in the event of an emergency. That way, the less financially involved spouse at least has a basic understanding of where the money is and who to call if something happens.
Olsen, Derek. “Money and Marriage: The Emotions Behind the Numbers.” Mintlife. Sept. 29, 2015. http://blog.mint.com/planning/money-and-marriage-the-emotions-behind-the-numbers-092915/.