Tips for Handling Money With a Spouse
Communicating about finances and following these steps can help you manage your money as a team.
Finances can be a tricky subject for married couples, but it's absolutely necessary for both parties to be on the same page about money. Otherwise, not only will funds suffer, the relationship may do the same. A study from Jeffrey Dew at Utah State University1 found that couples who disagree about finances once a week are more than 30 percent more likely to get divorced than those who do so a few times a month.
Another study by Ameriprise Financial2 found that only two-thirds of couples have "developed financial harmony over time," meaning that one-third of couples are still struggling with money issues. If you think the money-handling aspect of your marriage has some room for improvement, the following tips may help.
What Works for Others
For starters, look no further than the findings from that same study. It identified five top money habits of happy couples, which include: making money a priority, agreeing on financial goals and shared responsibilities, setting spending limits, sharing responsibility for retirement planning and investment decisions, and having a joint bank account.
Don't Divide Expenses
Some financial experts advise couples not to look at expenses as belonging to one person or the other. Think of all the money coming into your household as belonging to you both, and all the expenses as well. Establishing a joint bank account and openly discussing all the money going into and out of it can help you work together as a team to make financial decisions.
"In our relationship, I make quite a bit more money right now," says financial blogger Millennial Money Man3. "However, I NEVER talk about it like it’s just mine. It’s both of ours, and that’s the agreement that we made when we got married. We enjoy the money together, and truth be told, if my wife hadn’t supported us when I quit my job to run this business…we wouldn’t have nearly as much. I also have zero right to hold my income over my wife’s head or have a bigger say in where the money goes. We both have equal access to all of our various financial accounts, and it will always stay that way."
Open Communication
One of the most important things to do is keep an open line of communication when it comes to finances. If you're concerned about excess expenses, spending, investment choices, or any other aspect of your shared financial responsibility, you need to be able to talk about it with each other. The key is not to get too emotional and to keep your partner's feelings in mind. Share why you're concerned and more importantly, listen to your partner's responses and concerns. Some compromise may be in order, but that's part of what makes a marriage work.
Live Within Your Means
Both of you should actively keep up with your finances and understand exactly where you stand in the fiscal sense. Taking the time to set up a budget for your household4 can make easier to make spending choices that are within the bounds of what you can afford. Open communication about where you are spending money will help in this department as well.
Be Willing to Make Sacrifices
You need to be willing to make financial sacrifices for the betterment of your bank account and your relationship, especially if you expect your spouse to do the same. If your budget needs a makeover, figure out ways that both of you can cut back in a way that is fair to one another.
The reality is that you will likely not always agree with your spouse on money decisions. As much as you have "become one," you are still two different people with different minds. However, if you can be open to discussion, listen to one another, and ensure that you both have an equal say in matters, handling money with your spouse can run smoothly.
1. http://www.divorcesource.com/ds/main/u-s-divorce-rates-and-statistics-1037.shtml
2. https://www.ameriprise.com/retirement/insights/ameriprise-research-studies/couples-and-money-study/
3. https://millennialmoneyman.com/how-to-be-awesome-at-handling-money-with-your-spouse/
4. Click here for a Two Cents article on family finances and budgeting.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.