Differing opinions about finances can trigger marital arguments, tension, anger, stress and worry. Money differences can drive a wedge between loving spouses.
If you’ve been married for a long time and the way you handle money in your marriage evolved over time, it’s time to revisit those assumptions.
If you are a newlywed, you need to figure how to manage money as a couple.
It is important for all couples to work together and develop a way to manage money—not just when bills are due, or when the debt is overwhelming, or when a large purchase needs to be made, but every day.
Many couples divide the financial responsibilities so they each have certain bills to pay without ever creating joint accounts, or a joint strategy on financial matters. What happens when one of them loses their job? What happens when some of those financial responsibilities are related to the children? What happens when one of the spouses wants to be a stay at home parent?
In our experience the couples who pool their money and manage money as shared resource have much stronger marriages because they are working together as a team.
One of you can be the family accountant who is responsible to pay the bills and keep track of the budget. But the other person should know where everything is and how to pay the bills. There are apps, spreadsheets and software to track income and outgo. The important thing is to define a plan that works so both of you know how much money is coming in each month and where it is going. Otherwise it seems to slip through your fingers and you find out you have too much month left at the end of the money, and that leads to arguments and frustration.
Along with determining how to manage money, define your decision making process related to money. If there is a big decision and the two of you are not in agreement, how do you come to a conclusion?
Creating a list that documents each other’s thoughts and feelings regarding the decision helps clarify each position. The list needs to include facts and figures showing the long and short term financial impact of different options. Once the facts are available, it’s easier to make a smart joint decision.
The husband and wife should agree on all major financial decisions, because they will both experience the consequences of bad or good decisions. Even if their joint decision proves to be disastrous, there are no grounds for an “I told you so” fracture in their relationship.
No matter how well you communicate an plan, there is always something that pops up and ruins our best laid plans, and that means deciding how much you feel comfortable having on hand for emergencies. An emergency fund is an absolute must have.
Obviously more is better and the amount may change as you move through different stages. But if you don’t talk about and plan for it, that emergency fund will never become a reality, and when there is no emergency fund, you can be sure a budget buster is going to come along.
We recommend building the emergency fund to $1,000, then 3 months income, then 6 months income, then one year of income. Even if your emergency fund is $200 when disaster strikes, you are $200 better off than you would have been without one.
In addition to an emergency fund, discussions about long and short term savings need to occur. Short term goals can be money for Christmas or vacations; mid-term goals can be to replace a car, buy a house or renovate your existing home and long term goals can be retirement or sending the kids to college.
Each of these savings goals are important and with different time frames, there are different vehicles to use for saving. The critical thing is to be on the same page about your goals, how much you are saving for the goals and what savings vehicle suits your purposes best.
Hopefully you and your spouse are on the same page spiritually, if you aren’t, giving to the church can be a bone of contention. Start by talking to your spouse about an amount that they are comfortable giving on a regular basis. It is important for you both to agree—peace in your marriage is much more important than giving a specific amount. Continue to revisit the amount you are giving as you review your budget each year.
Having a discussion about debt limits helps keep you out of financial bondage when the debts become overwhelming. The average household credit card debt equals a little over $16,000. Student loans average $40,000. Car loans add $15,000 – $30,000 per car, and the average mortgage is in the neighborhood of $150,000 to $200,000. When it’s all added together, it’s easy to see how a couple could have $300,000 – or more in debt
Nobody planned to get into that much debt, it just happened gradually over time. We highly suggest you have a discussion about limiting the amount of debt you have. Maybe it means you stop using the credit cards once your unpaid balance reaches a certain amount. Or you decide you will never have two car payments at the same time. Or you set a cap on the mortgage amount, or decide not to buy a house till the student loans are paid off. Plan together to avoid being a slave to debt payments.
Staying out of debt sets a great example for your kids and helps teach them to be responsible with money. Other ideas for teaching them will vary based on how successfully or unsuccessfully your parents taught you, and how your childhood experience helped or hindered you when you became an adult.
Will you give your children an allowance? Will you have the children save a portion of any money they earn or get as gifts? How will you teach them to be generous?
There are no right or wrong answers. The important thing is for you two to be on the same page and to be consistent with the children. If one of you is the ‘bad guy’ and the other bails the kids out anytime the need money, you really aren’t teaching them anything.
All of these suggested money decisions are to help you communicate about money so it never becomes an issue in your marriage.
Here’s a little Bible math: when it comes to marriage, 1+1 = 1. Jesus himself tells us this fundamental truth: “So they are no longer two, but one flesh” (Matthew 19:6). This unity is designed for every aspect of a couple’s life together: physical, emotional, spiritual, and even financial.