Every Thursday for the next few weeks I will feature guest posts from couples that share their experience on managing money with their significant other. There is no ‘one size fits all’ with personal finance, and couples finance is no different.
I encourage you to read their responses, leave a comment and be sure to visit their website and follow them on Twitter.
Intro: Vic is a simple, unassuming father living in a quaint house in a suburb of LA County. After having a daughter, he was inspired to become a budget nerd so that his family could live a better life. He realized that you don’t necessarily have to make a lot of income to be wealthy, you just need to pay attention to your money. You can find Vic on his blog Dad is Cheap or reach him on Twitter at @dadischeap.
How do you divide financial responsibilities in your household and why did you choose this approach?
For the most part, I handle my family’s finances. Before my daughter was born my wife used to handle everything. We weren’t bad with money in the past, we just rarely considered our future until my wife and I had a little one to take care of. Having a daughter changed everything. I finally started to care about our finances and became passionate about personal finance.
If you could change a ‘money habit’ that your partner has, what would it be and why?
If I could change anything, I wish my wife would be a little more involved with the management of our finances. While we do talk about our money constantly, there’s always that concern that my wife would be a little lost if something were to happen to me. We have sixteen (16!) different credit/checking/savings accounts so it’s a tad bit complicated. I’m kind of crazy w/ Travel Hacking and scoring sign up bonuses.
I do make it a habit to send her an updated spreadsheet with all the passwords and logins and notes to each account.
How do you and your partner agree on long term financial goals that affect both of you (i.e. retirement)?
We talk openly about our financial goals on a regular basis. Early retirement and making sure our daughter graduates with little to no student loan debt are two or our main goals. We do make sure to balance our long term goals with living in the present. What’s the point of saving for the future if you can’t enjoy today?
How does a budget meeting in your household look like?
Budget meetings are quick. At the end of each month we’ll look at the past month and see what’s coming up the next month. It takes 5-10 minutes. The important thing is that we talk openly about our spending on a daily basis.
Do you consider yourself a saver or spender? What about your partner? How has this helped/hindered how you manage your finances?
Spender. I do most of the household spending and being on a budget actually encourages me to spend a little bit. My wife is the saver. Since she’s not as dialed in to our finances as much as I am, she’s content with just not spending money whenever possible. This works out well for both of us. 🙂
What approach do you use when resolving money fights in the home?
After we started discussing money on a regular basis, the money fights don’t happen that often. For the most part I think we’re on the same page in terms of our financial goals. As long as we’re fitting these goals in our budget, we’re allowed to spend guilt free on whatever we want. Just last week I bought $40 worth of wrestling t-shirts.
How soon do you think a couple should start discussing the topic of money in their relationship?
I think it should happen pretty early. I personally think money should be an everyday topic much like sports, movies, and the weather. How a person spends their money says a lot about what they prioritize in their life. Now, asking someone how much they make or how much is in their 401k might be a little too personal. Questions like that can wait until the relationship is a little more serious.
If a couple has differing views around money, what can they do to come to a reconciliation and work together with their finances?
I think it’s all about reframing the conversation and taking money out of the equation. It’s asking ourselves what do we want our future to look like? Once you realize that how you spend your money is a big part of that I think it makes it easier to reconcile differing views between money.
What three pieces of advice would you give to other couples in dealing with their finances?
Discuss finances openly. Money fights often happen because couples just don’t talk about money or have differing views about how the money should be spent.
Get on a budget. It doesn’t have to be a super detailed (although that’s what I’d recommend). Budgeting is all about making sure you’re spending falls in line with what you value most.
Max Out Your Retirement. Easier said than done I know, but putting as much as you can towards your 401ks and IRAs will make your life a little easier in the future. Compounding interest is a beast!