Do You and Your Spouse Ever Fight About Money?
It’s completely normal to fight about money with your spouse or significant other. Acknowledging that fact, how do we work to maintain a healthy relationship with both our spouse and money?
Do You and Your Spouse Ever Fight About Money?
By: Scott Sturgeon, JD, MBA, CFP®
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It’s one of the most taboo topics a couple can encounter, often fraught with emotional and irrational decision making that can lead to heated arguments, nights spent sleeping on the couch, and no, we’re not talking paint color selection for the kitchen cabinets.
Disagreements around money are some of the most difficult topics spouses can deal with and ranks among the top reasons for divorce in the United States. If you’re married, there’s a strong chance you’ve encountered some kind of disagreement pertaining to your household finances and if you haven’t, you may want to consider writing a book (or alternatively, taking some time to confirm your family finances are indeed in a healthy place).
When it comes to your household finances, working with your spouse to ensure you maintain open communication, adhere to mutually agreed upon parameters, and being aware of each other’s financial identity are important. While financial disagreements are bound to happen, adhering to some of these basic principles can go a long way toward a happy relationship.
In this article, we’ll cover each of these principles and how they can impact your relationship with both your spouse and money over time.
1. Communication is Key
2. Agreed Upon Parameters
3. Understanding your Financial Identity
Communication is Key
Far and away one of the most important components of successfully sharing finances comes down to communication. Being open with your partner about the basics of your personal balance sheet and income statement is critical to then having an understanding of your combined household finances. How much are you earning from your career or business? What do you prioritize spending money on and why? What kinds of assets do you own and what are your goals for them? If you have significant amounts of debt, how much and is it ‘good’ debt or ‘bad’ debt?
Trying to actively or passively conceal or hide portions of these financial data points are some of the most common ways that financial discontent can start in a marriage. While at times uncomfortable, honesty and openness are almost always going to be the best policy when it comes to sharing financial information with your spouse. Beyond even having an initial conversation to ensure you’re both on the same page, consider making it a monthly or quarterly date night where you start by catching up on your combined financial picture, then move on to something more fun like going out for drinks or dinner at a new restaurant.
Agreeing Upon Parameters
Once you’ve taken the time to open up about your finances, it’s important to formulate a plan for what you and your partner are working towards over the long term. Is it the opportunity to travel the world? Retiring or becoming financially independent before 60? Maybe it’s starting a business together or allowing one spouse the opportunity to do so? Whatever those objectives or goals are, you’ll need a plan to get you there and that means agreeing upon financial guard rails for the household.
Financial guard rails or just financial rules are basically agreed upon parameters for how, as a couple, you give you money a purpose. This process often starts with a simple budget and deciding how you’re going to use your money. For example, every time you get your paycheck, where are those dollars going and why? Maybe a portion is going to your workplace retirement account, paying down your mortgage, savings for kids education, investing in a taxable brokerage account, and the remaining amount put aside for a vacation.
Beyond simply budgeting, it’s also good to have general rules for how you spend money. A classic example of this rule is to determine at what dollar amount is a purchase something you need to discuss with your spouse first? Answering that simple questions can provide a lot of insight into how each of you view your spending and savings, as well as where your priorities lie.
Understanding your Financial Identity
When it comes to money, we all have inherent biases and beliefs that we bring to a relationship. Some of those are just innately who we are, but many are shaped by past experiences or biases, all impacting our financial identity. We define financial identity as the way in which you interact with money for your own wellbeing.
Maybe by default you’re a spender, with less focus on the long term and more emphasis on prioritizing things in the here and now. Your spouse on the other hand, may be a diligent saver, running counter to the way you think about money and how it’s used. While these two kinds of people can undoubtedly be happily married, it will likely be important for them both to be aware of their specific propensities, how that makes their partner feel, and perhaps most importantly, how their behavior impacts the health of their relationship and their shared goals.
Just like many other elements of a relationship, ensuring you’re dedicating time and focus to keeping your household finances in a healthy place is important. While it’s perfectly normal to have disagreements or arguments in discussing and working to manage your household finances, sometimes it’s helpful to have an unbiased 3rd party to provide an outsider’s perspective. If you feel like you and your spouse are struggling with how to navigate your finances or if you’re just not sure how to approach your financial goals, consider working with a fiduciary financial advisor.
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