Monday, June 26, 2017

Marriage & Money: Learning to get along

June 1, 2017

By Dina Isola

If fighting about money has become a ritual in your household, you are not alone. Money is a leading cause of tension between couples. Before it goes too far, realize that you both have control of the situation. These steps can help you work together to fix your differences:

  1. Know both of your money personalities and create a plan/budget that works.
  2. Discuss the division of labor.
  3. Agree on the ground rules.
  4. Make sure long-term goals are in sync.
  5. Communicate regularly.

1. Know both of your money personalities and create a plan/budget that works.

There are three basic money personalities: hoaders, splurgers, and avoiders. Understanding why you treat money the way you do, and gaining insight into how your spouse feels about money, will make it easier to manage your situation.
Hoarders love to save and bargain hunt. Because they fear that they’ll never have enough, spending money makes them uncomfortable. Luckily, they are happy creating a budget, because they enjoy keeping track of their finances. By putting “splurge money” into the budget they can learn to enjoy their money without worrying that they are spending too much.
Splurgers are happiest when treating themselves (or others). Spending makes them feel loved and successful. The danger is that they will spend far more than they bring home. Because they like to be rewarded, they too can benefit from putting a line item in the budget for reasonable splurges.
Avoiders lack the confidence to deal with money. They ignore their financial responsibilities, such as balancing the checkbook or researching their investments. Their greatest risk is missing opportunities to make their money go farther. And, if they are married to a splurger, they won’t realize that debt is mounting up until it is too late. The best strategy for Avoiders is to take a class or read up on basic finances. Creating a budget is the best way to get familiar with the situation they were trying so hard to ignore. Because Avoiders tend to procrastinate, setting up automatic bill payment and automatic investments (where money is wired from your bank to the account) is a helpful strategy.
2. Discuss the division of labor. Make use of your natural talents and assign responsibilities accordingly.

Maybe one of you is efficient at bill paying, but the other is better at balancing the checkbook. You do not need to do all the jobs together, as long as you both remain informed. The same goes for recordkeeping and investing.
3. Agree on the ground rules.

Obviously, no lying and no concealing are mandatory rules. Another good one: large ticket items need to be discussed before purchasing. Just make sure you agree on what dollar amount constitutes a large purchase.
4. Make sure long-term goals are in sync.

Your husband may be counting on you returning to work, but you may plan on setting up your own business. Make sure you thoroughly discuss where you both see your lives in the near future. Now is the time to work any long range goals into the budget (such as laying the groundwork for a business). Be very specific about what you want saved and by when. That is the only way you can see if you are making progress.
5. Communicate regularly.

Even if one of you primarily controls the budget and bill paying, you both need to review what is going on. Make a monthly date to discuss your money.
Keep in mind, as you put together your budget, there needs to be a regular amount allocated to saving and investing. Work first on creating an Emergency Fund, and then fund retirement. Aim to save at least 10% of your income, then you can get started on college savings. Together, you can fix your differences and work towards shaping your future instead of your future shaping you.

Comments

4 Responses to “Marriage & Money: Learning to get along”
  1. We also use an easy online tool, mint.com so both of us can always see the big and small picture. It will track everything for us, our mortgage, credit card, our CD, checking account etc. It categorize expenses and shows you what you’re spending and in relation to other things at the click of a button. Some people may be nervous about using an online tool, but we’ve used mint.com for over a year now and haven’t had a single issue.

  2. Dina Isola says:

    Mint.com is a great tool to track your expenses and spending patterns. The only way to re-prioritize your budget allocations is to accurately track how you spend.

  3. Julee says:

    Definitely have the Emergency Fund….learned this from Dave Ramsey’s classes I took a while back. Financial Peace University is a great class. Anyway, I can’t tell you how many times we have used our Emergency Fund and avoided credit cards or possible overdraft fees (forgot to enter something into checkbook). Part of my Emergency Fund is in a easily accessible low interest savings account. The other part is in some stock at work, so it’s harder to get to. While I don’t condone using stock as a savings plan, I purchase stock at a discount so it saves me some money and I’m still saving.

    Though if you use your Emergency Fund, you need to repay it back just like a bill. It’s cheaper to pay yourself back than a credit card.

  4. Dawn says:

    I so needed this! It’s really the only thing that Hubbs and I fight over. Thanks Darla for all that you do!

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