Amore is in the air as we approach Valentine’s Day. Couples are busy buying the perfect gift to demonstrate their love to one another. After all, love conquers everything—right? The romantic in me says “yes”. The financial advisor in me sadly says “no”.
Instead of a more traditional Valentine’s Day post, I decided to share some tips to help couples master the minefield of money. With almost 50% of first marriages ending in divorce (and the percentage increases in subsequent marriages), money is often cited as a contributing or the main factor in the dissolution of marriage. The good news? This is also something that can be fixed once we understand how money can ruin a once happy union.
How to Build a Strong Financial Union
I’ve worked with countless couples and I have seen how money can bring out the best and worst in people and marriages. While every couple is unique, addressing these four key areas can help keep money from being a source of stress and unhappiness in your marriage.
Open Communication is a Must
This is where many couples fall apart, so this is where I want to start. Money cannot be a taboo topic in a marriage. You should be talking about money before you say “I do” and afterwards too. You are no longer making money decisions just for yourself but now as a couple, and you need to actively adjust your money approach from “me” to “we”. You need to understand how each of you views and handles money and establish common ground. You don’t have to think and do everything exactly the same, but you do need to follow agreed upon values when it comes to how you will manage your money. Too many couples assume the other one is comfortable with how they spend their money, only to find out later that they are not, which can cause a lot of unnecessary friction. A few things you need to determine together:
- Will we completely commingle our money or commingle a portion to be used to pay bills, etc.? Will each contribute the same amount or a percentage of income? What about if someone earns significantly more than the other?
- We will keep money we had prior to marriage separate or commingle?
- How we we handle debt brought into the marriage by the other partner? Are they solely responsible for debt repayment or are we both responsible?
- How will track our expenses? Who will track our expenses? Who will pay the bills?
- Will we each have our own “fun” money to spend as we please? What types of expenses (or amounts) must we discuss first with each other before purchasing?
This is just a sampling of some the questions you need to answer. Once you start the conversation, you will discover money isn’t such a scary topic. Be open, seek to understand and supportive in your money conversations. Don’t hold grievances and let them fester until you explode. If something is wrong, talk through it. In many instances when we get angry, we are actually scared, so tell your spouse when their actions/decisions with money scare you. It’s unlikely they knew or were intentionally trying to make you afraid. As I’ve said before, money is emotional. Don’t let your money emotions, both good and bad, affect your marriage. Talk, talk and talk some more.
All Systems Go: Each Partner Recognizes and Accepts Their Responsibility
We’ve all heard the phrase “too many cooks in the kitchen” and it holds true when it comes to your money too. You absolutely must decide how you want to use your money together but then agree upon who will do what, follow through with your responsibilities in a timely manner and keep each other informed. Not surprisingly, I am responsible for our investments, but Chris knows what we are saving for and how our investments are doing. We celebrate our success together and cheer when the markets go up and remind each other that market volatility is normal when they go down.
Marriage is an Equal Partnership
Sometimes there is an imbalance of power in a relationship. It might be one earns more money than the other and feels this means their vote carries more weight. The reality is most couples don’t earn exactly the same amount of money. Sometimes the differences are minute and other times they are not. A healthy, long-lasting marriage looks beyond the amount of money one brings to the family and does not give one partner more power over the other. You are equal partners. You decided together to create a life with each other and that includes an equal say in how that life looks.
Create Goals for Your Life Together
It surprises me how many times couples have sat before me and have never once discussed their goals with each other. They automatically assumed the other one wanted what they did. And guess what? They don’t always want the same thing. It’s not a surprise that money tension exists since they weren’t working towards common goals. Sometimes they were even unintentionally working against each other. Don’t view this as a deal breaker, but an opportunity to create shared goals and get on the same page. Trust me, this is fun!
A Financially Strong Marriage
When we communicate openly with one another, it’s easier to calmly discuss money issues when they arise and focus on the life we want to create together. Chris and I are united in our love of traveling, our retirement vision and our desire to pay for Lauren and Taylor’s college education to name a few of our shared goals. We know what we’re working towards together and what matters most to our marriage, which is 23 years strong and I can’t wait to see what the next 23 years brings us.
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