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.
Introduction: Life is impossible to predict, and everyone has a hard time guessing what will make them happy. Because of that, I’m a big believer in experiments, do-overs, and running towards big brick walls just to see what will happen. I want to encourage and equip other people to plan their finances, so that they can embrace the unplanned parts of life. Check out my blog site Unplannedfinance.com and follow me on Twitter.
1) How do you divide financial responsibilities in your household and why did you choose this approach?
We originally tried to split the work 50-50, but we found that too many things fell through the cracks. As a result, the only thing we split is investing our respective retirement accounts. We also create a budget together which is a date that we both love. I do most everything else (paying the bills, shopping for new insurance, managing our rental properties, tax prep, etc.).
I think that couples should work together on their finances, but 50-50 isn’t likely to work.
2) If you could change a ‘money habit’ that your partner has, what would it be and why?
I wish that he wouldn’t trust me with the money quite so much. When I ask his opinion, he often defers right back to me. Even though I always get my way, that can feel lonely.
3) How do you and your partner agree on long term financial goals that affect both of you (i.e. retirement)?
We try to incorporate long term planning into every single budget meeting. Right now, we aren’t super-focused on the long term because he is in school, and I work part time as a freelancer. We decided we were okay with this by talking about it for more than a year, during every single budget meeting. Our main goal is to earn enough to avoid debt. When he’s out of school, we will start focusing more on wealth building.
4) How does a budget meeting in your household look like?
Every month, I bust out cookies or ice cream and a spreadsheet. I recap our spending before the meeting starts, so we can discuss if we went over at all (we usually don’t because we have sinking accounts).
Then, we add up our income from the previous month, take taxes and tithing off the top, and decide what to do with the rest. In tight months, we have to talk a lot, but in months with high income, it’s pretty easy to just throw money towards saving.
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 cheap. Actually, I like to spend money, but on little things whereas he likes to spend money on big things. Because we’re both spenders, we’re able to keep each other accountable to spending less overall. Our budget is a promise to each other, so we don’t want to break it.
6) What approach do you use when resolving money fights in the home?
We try to only fight during the budget meeting. If a conversation turns to a fight, we agree to talk it over again during the budget meeting. I know this sounds like we’re avoiding the issue, but it’s especially helpful for Rob. He likes to think through his ideas, and he feels attacked if we’re in conflict. I like conflict, so I would happily argue all night, but it’s better to talk in more concrete terms during the budget.
7) How soon do you think a couple should start discussing the topic of money in their relationship? What approach should they take?
Money isn’t a one-time topic. It’s appropriate to discuss money with a broad stroke during the early dates. I know that Rob told me he didn’t like to spend money at restaurants after 3-4 dates. You can have a big money talk at some point before you get engaged, or you can sprinkle the conversation in.
For some reason, we both felt comfortable talking about money, so it was a natural topic for us, but I don’t think it’s that way for everyone. One drawback to such a casual approach is that we were married for several years before we started to understand each other’s money mindsets.
8) If a couple has differing views around money, what can they do to come to a reconciliation and work together with their finances?
Couples with different views don’t have to become single minded in their financial views, but they do have to work together. For couples that don’t naturally click (95%+ of couples), I recommend budgeting for two weeks at a time, and viewing your budget as a promise to each other.
When you work through specifics, you can eventually extrapolate to general ideas.
9) What three pieces of advice would you give to other couples in dealing with their finances?
If you’re married, you should work on your finances with an attitude of love.
It’s not loving to avoid financial conflicts forever.
It’s not loving to attack your spouse when they aren’t ready to talk.