How to Manage Money as a Couple
You don’t need statistics to tell you that money is a major point of contention in many relationships. It would be hard to find a couple who hasn’t fought about money at least once.
It’s not surprising: most of us have never learned how to manage money, let alone how to talk about it.
In addition, we all have different experiences and beliefs about money stemming from childhood experiences.
Some of us grew up in frugal households and learned to never spend money on ourselves. Others grew up in families where it was important to have the latest thing or where having a lot of money showed you were blessed by God. Still others avoid talking about or dealing with money at all costs.
Here are some tips to help you manage your money as a couple:
Communicate
Talking to your spouse on a daily basis about every item purchased is excessive (I’m not going to check in with my husband every time I need new moisturizer or socks), but it’s a good idea to communicate regularly.
What that looks like might be different for everyone, but it is good to have a plan. Some couples check in weekly, while others choose a less frequent schedule. Another option is to do a yearly review and talk about any large or unusual purchases.
Work together to come up with a system that is agreeable to both of you, and then stick to it.
Identify goals and values
Many people get caught up in the nitty gritty of day to day money management. A spouse who is trying to save more money gets upset about the other’s purchases. Most fights end up being about specific actions or purposes instead of the larger issues.
To avoid this, start by identifying your collective values, goals and dreams for your life. This might take many conversations and evolve over time, but if you can agree on some big things, you can start making a plan to get there.
For example, maybe a couple would like to buy a house or do a home renovation. Start by figuring out how much you need to save and start working backwards.
Let’s say you want to buy a house for $300,000 and need to save up $60,000 for a 20% down payment. You can divide $60,000 by the number of months you have until you’d like to buy the home to find out how much per month you’ll need to save. Now start talking about how you can make that happen.
When you know what is important to you, it’s a lot easier to adopt habits that will help you get there. Besides, knowing your goals and future are funded takes pressure off the smaller stuff.
Talk about your money feelings and fears before numbers
Money isn’t just a set of numbers; it involves emotions, experiences, fears, and worries. You can’t start talking about who is going to pay how much for each thing without addressing the emotions and meaning.
Talk about your money experiences growing up and how they affected you. Share your worries about the future or the way you feel about having debt. Discuss how you’d feel about one spouse making a lot more than the other and what money lessons you’d like to teach your children.
Understanding how each other feels about money provides you with a more solid basis for making a financial plan together.
Design a money management plan that works for you
I know couples who keep their finances separate except for sharing responsibility for bills and others who have everything together. There’s no plan that will work for everyone.
Start by taking stock of your situation. List out bills, accounts, debts, and assets so you have a complete picture.
Develop a plan. Think about:
Who will pay the bills and what accounts will be used to pay them.
How any debt will be repaid
How you will handle day to day expenses
If you have a joint account, how much will each spouse contribute?
How to pay for things each of you just wants
What happens if/when one spouse earns more than the other
Clearly identifying the parameters and responsibilities can eliminate a lot of disagreements.
Consider having a combination of combined and separate finances
Another main source of money conflict between couples stems from different understandings of what is worth buying. Maybe one spouse is a saver and one is a spender. Or perhaps spouses disagree on what things are worth buying.
In this case, it can be helpful to pay your joint expenses from a joint account and maintain separate accounts for discretionary purchases.
Some couples also agree to still talk about any purchases over a certain amount even if the purchase is made from an individual account.
Make sure both partners have access to the information
Even if one partner is in charge of the money tasks (bill paying, etc), both partners should always know the overall financial picture.
Secrecy is a major red flag in relationships.
Automate as much as possible
Have part of your paycheck automatically sent to retirement accounts and any other savings accounts you have. Set up automatic bill pay. The more you automate, the less you have to think about it. Plus, automating your savings is by far the best way to make sure it actually happens.
Read more: Why You Should Automate Your Finances
Consider a prenup or postnup
If you’re like me, you’re freaking out about the thought of this right now. Prenups and postnups almost always throw people into thoughts of how much value they hold in a relationship. It’s hard to separate your personal worth from monetary agreements.
However, they are becoming increasingly popular and can be one way to address concerns, particularly in couples where people get married later in life and have disproportionate assets. If you enter a marriage with a thriving business, for example, and later get divorced, you wouldn’t want your business to be destroyed by the division of assets.
In addition, if you have a family from a previous marriage, you might want to set guidelines on how assets will be handled.
Most people do not need to get prenups, but don’t be afraid to explore the option if you have such concerns.
Check out this video interview with Ramit Sethi on how to negotiate a prenup and what he wishes he’d done differently.
Don’t be afraid to get help
If you find that you and your spouse are just too far apart on money issues, it can be helpful to work with a therapist, financial counselor, or financial coach.
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