Couples & Their Money: Nii & Renee

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.

wp-1472728735032.jpgIntroduction: Nii and Renee Darko first met as they were entering medical school. Fast forward 11 years, and they found themselves newly married with well over $800,000 in debt made up mostly of student loans. Starting October 2014, they embarked on a journey to pay off their student loans ($662,900) in 3.5yrs. Visit their site at Keeping Up with the Darkos, on Twitter and Facebook.

1) How do you divide financial responsibilities in your household and why did you choose this approach?

We don’t divide financial responsibilities in our household.  We have joint accounts and we do our budget together. We combine our individual incomes to become OUR income. From that, all our expenses are withdrawn. So, “pay the light bill with your money” is not the approach we take. However, there are certain tasks that we each prefer to take on. Nii likes making sure the bills get paid. Renée likes keeping track of our student loan payoff goals on a spreadsheet.  This approach allows both of us to understand and have a stake in what is going on in the Darko household. It’s important for us to live like a married couple and not like roommates.  Our futures are tied together and so are the resources we need, including our finances.

2) If you could change a ‘money habit’ that your partner has, what would it be and why?

We both have pretty good money habits. Having each grown up in very modest households, so we don’t tend to spend much money on things that we need, much less on things that we don’t need. Recently, we have become more mindful of planning ahead for events and occasions. For example, we started putting money away for Christmas gifts in October last year, rather than trying to budget all of it for December.

3) How do you and your partner agree on long term financial goals that affect both of you (i.e. retirement)?

Because we’ve known each other for almost 15 years, we shared our career and financial goals well before ever getting married. This might have prepared us for handling our money as a married couple.  When you have as much debt as we have, it’s hard not to be on the same page.  Having been married for less than 3 years, our financial goals revolve mostly around being able to be close to and available to each other and to our families. This ultimately means having the career freedom that comes with being financially independent.  As long as we have lingering debt, we’ll be forced to take jobs that just “pay the bills” even if it means being too busy for each other and our families.  We definitely don’t think of retirement as an age; it’s strictly a dollar amount for us.  How much do we need to be able to retire?  Right now, we’re in a race to see how fast we can hit that dollar amount.  The faster we do it, the younger we’ll be, the more years of career freedom we’ll have, and the more time we’ll be able to spend with each other and family.  That’s what life is all about!

4) How does a budget meeting in your household look like?

First and foremost, budgeting is about trust. We see budgeting as an expression of love and a commitment to our future together.  Our first official budget was on an excel sheet which we started in October 2014, just one month shy of our first anniversary. About one year ago, we started using the EveryDollar budgeting system. We typically sit down together with a laptop on the last day of each month to do the budget for the upcoming month. We itemize any upcoming expenses for the month, including living expenses, travel, birthdays, special occasions, and special items we’d each like to buy. We make monthly contributions to our IRAs and other investments. We give ourselves a small allowance of $50 a month for anything we’d like to buy. We usually end up spending it on each other. LOL! Finally, whatever remains goes towards our student loan payments. Because we are very modest about our spending, our student loan payments can range from 45% to up to 80% of our income! Paying off student loans is our number one financial priority, so we try to squeeze every dollar we can to paying them off quickly.  After we’re done with the budget, we usually high five! That high five reinforces that we worked on the budget as a team and will do everything we can to make Team Darko win with money!

5) Do you consider yourself a saver or spender? What about your partner? How has this helped/hindered how you manage your finances?

We’re both definitely savers. Having similar spending habits has really helped us manage our finances.  When we started this journey to financial peace, we had well over $800,000 worth of debt which consisted mostly of our student loans ($662,900) and a rental property.  We had very little savings, no investments, and little retirement funds.  When we got serious about our goals, we paid off $130,000 in 6 months!  Now, 2 years later, we’ve paid off more than half of our student loan debt and built up sizable savings and investments.  We are working towards a mutual goal, so we make a concerted effort to stay within our budget and our means. 

6) What approach do you use when resolving money fights in the home?

We NEVER fight… LOL! Truthfully, we only had a couple of fights about money before we started budgeting.  Budgeting was one of the best things we did for our marriage.  Our budget is our written strategy of how we will reach our future goals.  Since then, we rarely disagree about money.  When we do disagree about money, it’s usually because we don’t see eye to eye on how to reach a mutual goal. For example, we might not agree on how much to put towards our loans in a given month. Once we each listen to the others reasoning, we typically reach a compromise. Sometimes, we realize that a decision for the previous month wasn’t the best decision, so we readjust things the following month.  Our money “fights” are more like bumps in the budgeting process, typically lasting about five minutes. At the end of the day, what matters most is that we are both involved in the process.

7) How soon do you think a couple should start discussing the topic of money in their relationship? What approach should they take?

As soon as you start calling yourself a couple, you should start assessing each other’s money habits. That’s not to say that you should start pooling your money together and budgeting together right away. But, talk to each other about life and financial goals, then take note of money habits. Consider the following questions. Are you both impulsive? Do you frequently use credit cards?  Do you both live within your means? Are you both always buying expensive things? Are you both saving or investing?  Do you both see money as a means to an end or as a prized possession?  If you marry this person, what is the likelihood that you will retire at a decent age or need to keep working well into your elderly years?  You can tell a lot about a person by their financial habits, so don’t take that for granted. Remember… how your partner handles money will greatly impact your future.

8) If a couple has differing views around money, what can they do to come to a reconciliation and work together with their finances?

First, decide if the issue is the money or the relationship. Are you a couple or are you just romantic roommates?  If you are both on the same page and in constant communication about your life and your future, it’s not likely that you will have very conflicting views about money. If you’re a couple that does not plan together, then you don’t actually have a goal to shape your views around money.  You’d be surprised at how many couples don’t sit down to talk about their futures together. One couple we know was buying a house, but they didn’t know each others income. How can you commit to maintaining a household together if you don’t know the pool of resources that you have? As doctors, if we took a patient into the operating room without having appropriate instruments, that’s poor planning, not an just an issue of instruments. They thought they had a money issue because they’ve had ongoing disagreements about spending and saving. When asked if they had talked about a plan for retirement, their kids’ college fund, or debt payoff, they said “no, no, and no.”  So, what do they talk about? They have not established any life goals, not together anyway! We reminded them that if they are not planning to be together, then they are effectively planning to be apart. That has nothing to do with money. How they handle money is just a symptom of their overall lack of communication and planning life together.  So, they need to start by laying out all the important things upcoming in life and committing to a plan to achieve their goals. They should reinforce it by talking about their life’s goals (not just the money) very consistently, almost daily. Couples should dream big together.  A very common phrase in the Darko household is, ” You know what I wish we could do?”.  Many times, that’s the start of our new goal.

9) What three pieces of advice would you give to other couples in dealing with their finances?

Finances is less about money and more about planning your future. Money is like a car. It’s just a tool to reach your destination. If you were going on a long trip, you’d make sure that your car was in good enough shape to get you there. If you have a goal to travel, retire, pay for college, switch jobs, start a business… make sure you’re in good financial shape to make it possible.

A budget doesn’t restrict you; it puts you in control. Why are people OK being controlled by a GPS, but not OK with being in control of their money with a budget? You choose where your money goes, so put it towards whatever you want. Make a budget. Stop doing mental math. It’s probably costing you thousands of dollars a year. 

Show each other financial respect. Be open and honest about your money habits. If you like to spend or if you’re a money hoarder, just admit it to yourself and your partner. Don’t hide money or lie about debt. If you make a budget together, honor the pact. Talk about any unexpected purchases that you would like to make that might be outside of the budget that month. Maybe there’s room to readjust the budget or, perhaps, that item can wait until next month. Don’t treat your partner like a child where you’re dictating what they can and can’t have. Don’t treat your partner like your parent where you expect them to handle all the money issues on their own. You both are responsible for your household and how the money is managed.

10) Are there any other remarks you would like to add?

By no means are we perfect. We are learning a lot about money and the best way to manage it everyday. We’ve made many money mistakes and, no doubt, we’ll make more in the future. But, the more we learn, the better off we’ll be. We hope that our experience will help others the same way that others’ experiences have helped us!

Categories: Debt, Guest Posts, Money & Relationships

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6 replies

  1. I think it is great that you joined your money when you join your marriage. I find it difficult to do the same because I am a saver and my husband is a spender. We are working on different ways to come into agreement with our finances. Although we have our disagreement about money here and there, we are budgeting together now and I am finding that the fights are reducing as well. Thanks for sharing your story.

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    • That’s wonderful that you and your husband are finding common ground and starting to work together. Joining money can be tricky. That’s where showing each other financial respect comes in. If you both set a goal, you each have to do your part to assure you reach it…. TOGETHER! Good luck to you!

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  2. I love these people! They sound as though they really are acting as one – not easy to do for the majority of us. It was interesting how they referred to money as a vehicle to get you to a destination; that’s a very balanced way of looking at it.

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  3. I thought the entire interview very interesting. The 3 points that stood out to me were: 1. Finances is less about money and more about planning your future. 2. A budget doesn’t restrict you; it puts you in control. 3. Show each other financial respect.

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