Money is universal in our lives. Every choice you make as a married couple will be accompanied by some sort of financial consequence. So if you can't agree on how to best manage your household finances, unnecessary and unwanted strife is sure to set in. No matter what you do you will have disagreements, but how do you avoid the unwanted difficulties caused by financial resentment that is so rampant on relationships? You talk about it!
So, let's talk about why you need to have the money talk, what you need to discuss, and how to discuss this topic productively.
Why you need to have the money talk...
Dealing with money issues is inescapable in a marriage. Hiding from the monster will only make it grow. By facing money head on and discussing it regularly, you can take what is already a great thing—your relationship—and make it stronger. Talking about money doesn't mean y'all will always agree on how to handle your finances. Though, you will understand your partner's viewpoint and then — hopefully — find a mutually beneficial compromise, comprise a plan, and create synergy towards building a solid financial foundation.
It is easy to skip this conversation, though, and this might be why:
You probably have a lot going on. You are trying to figure out your new careers and discovering how to live together. Most folks are busy doing life. You are presumably no different.
Money discussions can be uncomfortable. Y'all will grow as individuals and a team through the struggle, though. So don’t let a bit of awkwardness stop you.
Not having the money conversation creates a gap in your relationship. It can start out small. Over time, the gap grows like a creek carving out a canyon. Eventually, the gap may be unbridgeable—which is why money (or the way we interact with it) is one of the top causes of divorce.
So let's turn to why it is so important to have an open line of communication around your money. Think about the decisions you’ve made today. You probably started with what you wanted for breakfast. Did you grab a biscuit on the way to work? Did you cook? Did you have a bowl of cereal? Trivial, right? Maybe. All those decisions have financial consequences.
Then you probably moved on with what to wear today. Are you the type that wants to wear designer everything or are you the type that is more comfortable in shorts, a tee shirt, and flops—or crocs (don’t judge me). Once again, these decisions have financial consequences.
Remember how I said dealing with money is inescapable? Well, it is true. Money pervades every part of our lives. Communicating with your partner about your financial plans, dreams, worries, fears, and everything in between is crucial to a healthy marriage.
My wife and I struggle with these things just like everyone does. I frequently have unrealistic expectations for the amount of money we should spend on things—such as clothes. I joke that I haven’t bought a piece of clothing in over a decade. Which is true, but only because of Elena. She buys my clothes for me. And she does because she knows I won’t spend money on clothes. But we clash over these types of issues in our bi-weekly budget meetings. We come to the best solution for us — as a team — which is usually counter to my overly frugal perspective and we move on.
We don’t make financial decisions. We make life decisions with financial consequences. You will make a lot of life decisions together which is why it is so important to have financial discussions — or, rather, productive financial discourse.
So what should you talk about?
Start with the fuel that is going to run your financial engine…your income.
What is our household income? There is no longer my income and your income. There is just the household income. There is no breadwinner. There are just two people focused on winning and putting bread on the table. So pull out the W2s from last year (or make an educated guess) and add your individual incomes together to see what you can expect to be earning collectively.
Next, you should move on to the dead weight that will slow your engine down…your debts.
Again, it is no longer my debt or your debt. It is household debt that you should create a plan to defeat. Romans 13:8 might say it best.
“Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.” Romans 13:8
No one screams, “We invested $25,000 into retirement accounts this year", but they do scream, “WE’RE DEBT FREE”. Feeling the freedom of paying off your debt is unreal and working hard to accomplish the goal together is remarkably unifying. Elena and I found out firsthand.
Now you are rolling, so go ahead and create a budget. John Maxwell said, “A budget is telling your money where to go, instead of wondering where it went.” A budget will bring intentionality to your household finances. But, a word of warning—YOU WILL NOT GET THIS RIGHT. At least not to start. It takes a few months of budgeting together to begin to get it right. If you understand this when you start, though, it won’t bother you as much when you don’t quite stick to the plan. Be flexible and figure it out as you go. Elena and I like to do our budget bi-weekly, but most folks prefer a monthly budget. Find what works and stick to it.
Lastly, you should discuss, prioritize, and create a tentative plan to accomplish y'all's financial goals.
Common examples might be to:
pay off debt
save for an emergency fund
save for a down payment
invest for the future
take a once in a lifetime trip to [insert exotic destination].
Though it can be tempting to put the exotic destination at the top of the list, paying off your debt and establishing an emergency fund are probably the most powerful things you can do to set yourself up for success. I have found that the amount of “emergencies” someone has is negatively correlated to whether they have an adequate emergency fund. Needing a new alternator in your car becomes a speed bump — barely slowing you down — instead of a roadblock when you’ve got your emergency fund specifically earmarked for unexpected situations. This allows you to focus on what is truly important in your life instead of running from fire to fire just barely putting them out.
Once the two of you get through this first conversation — and most likely the second, third, and fourth conversations if you don’t complete it in one sitting — you will find that having these discussions will become more fluid and natural. The communication will strengthen over time. That doesn’t mean that you will always agree, but you will be able to discuss an emotionally charged topic, money, in a productive manner.
So how should you have this discussion?
Focus on Winning Together
Productive money discussions start with an open mindset focused on winning as a team. Money is emotional. Y'all may have differing money scripts so agreeing to disagree may be necessary, but don't let that bring the conversation to a dead end. Continue the dialogue toward productive compromise. Recognize that you don’t want to win an argument over your husband or wife per se. That means your spouse lost — making him or her a loser. That sounds odd to say but, once an argument begins, it is tough to stop until you feel like you've won. Remember, you want to win together. So be open to compromise.
Take Your Time
From I do until death do you part will — hopefully — be a long time. You don’t have to figure it all out in one sitting. Take your time as you move through the initial stages of talking about money and discovering an effective way to manage your household finances. The tortoise beats the hare every time the fable gets told, so don’t rush it. Make sure you keep coming back to the discussion if you are having difficulties, though.
Bring Values into the Discussion
Numbers are simply one side of the coin. If you create a plan based on the household income with both spouses working and don’t recognize that your wife values being home with your future children, then the plan is destined to fail. Your values should be the substrate of your goals which then guide your actions. So get touchy-feely here and discuss the softer side of money. A good way to do this is by starting with why. Ask yourself one question: Why is money important to me? Reflect on this and discuss it together.
For better, for worse, for richer, for poorer…
Ignoring the bad news your doctor gives you doesn’t make your illness go away. The same applies to your household finances. You have to lean into your money and the challenges that come along with it. You will always have bills to pay. You’ll want this and she’ll want that and y'all will disagree about it. Emergencies will happen, good fortune will come and go, and — hopefully — your relationship will endure. Don’t let money become a wedge between you and your spouse. Keep the lines of communication continually open and use y'all's money as a tool for building the life y'all desire.
If you'd like to see how working with a financial planner can help you move forward confidently, you can start by scheduling a free planning call. Feel free to contact me at firstname.lastname@example.org or (470) 228-0519 with good news, questions, or concerns. If you found value in this post, please like us on Facebook.
Disclaimer: All written content on this site is for information purposes only. Opinions expressed herein are solely those of Forward Focus Financial Planning, LLC, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.