The number one reason why couples break up is over money.
The median age for first time marriages in around 30. At this time it is normal
to combine finances but it is not as simple as our parents/grandparents have us
believe. Times have changed and more people are independent and have already
developed their way of managing their finances on their own and are used to
spending their money on the things that make them happy. So couples are
bringing financial baggage into the relationship. Most people at this age
already have invested in their 401k, have student loan debt, maybe even
investments or mortgages. Because of this it is important for couples to talk
about their separate finances and develop a plan together.
Did you know:
40% of people say they do not completely trust their partners to manage their
combined finances
Only 38% said they were only somewhat aware of their significant other’s debts
21% said they sometimes hide their spending from their significant other
So how do we learn to agree on our household finances with
our significant other?
First thing is first- find out the reason why you fight.
Reason #1: One person is the spender and the other is the saver.
You have very different ideas and values when it comes to money. The spender
feels constrained and the saver feels insecure. Learn to find your partners
financial strengths. For instance- My husband and I are in the process of
buying a new family car. He is the spender and is wanting something brand new
and fancy. Me on the other hand, the saver, would be happy with an inexpensive
used car. So to compromise we test drove a few brand new SUVs to decide which
make and model we liked the best and my husband has allowed me to search and
find the best deal. The point is to aim to make a better decision as a couple
than you would as individuals. Before you make a decision make sure you
communicate you needs and expectations and that you set a limit of how much you
are both wanting to spend.
Reason #2: Having a single-income household.
The person bringing home the bacon expects to be in control of the spending,
while the non-earning partner usually believes the decisions should be made
jointly. This creates stress, conflict, and imbalance of power. What this boils
down to is control and a marriage is a partnership: using money to control your
spouse can seriously damage a relationship. Start by talking about the subject
at a calm time, not when you are in an argument about money. A good way to
establish balance is by setting a specific dollar amount for each partner’s
spending and by agreeing to discuss any purchase over a certain limit before
buying it. Finding balance on this issue will not happen over night. So if one
of you breaks the new rule, talk about why and make necessary adjustments. If
you still find yourself arguing over the same situation consider speaking with
a marriage counselor to get a third party’s point of view.
Reason #3: Disagreeing on spending priorities for the kids.
Are you really arguing over private school versus public school, no you are
arguing over values. You need to talk about the real issue or you will keep
having the same fight over and over again. These conflicts arise from the way
the spouse was raised. For example, my husband was raised in the suburbs
getting brand new name brand clothes while I was raised on a farm with 2 older
sisters getting hand me downs. Either way, just explaining the emotions behind
each of your beliefs will help you find common ground.
Try to reach a compromise. Always ask “will we need to sacrifice anything to
spend the extra money?” Maybe the common ground is sending your kids to private
school but have them buy their own clothing with allowance money, or send then
to public school but pay for extracurricular activities to provide the extra
enrichment.
Reason #4: One of you have debt.
Dragging around the extra baggage of debt will always cause stress. Especially
if you disagree with your partner about saving for a rainy day or paying off
your balances. The easiest way to fix the situation is buy tackling the debt
head on. You can possibly do this on your own or you can talk to a financial
advisor to help you crunch the numbers and decide what is a realistic way to
take care of it. Be sure to talk about your priorities and goals. One of you
might find security as being debt-free while the other feels safer having a
large savings account. Once you find out where each other is coming from it
will be easier to find balance.
Reason #5: A lot of people think that keeping your bank accounts separate
reduces the risk of fighting over money.
This isn’t always true. Maybe one person takes on more of the fixed expenses,
mortgage, car payments, insurance, while the other handles variable expenses
such as, clothing, food, household items. These variable expenses can’t be
predicted, so one partner can often wind up “in the hole”.
A good way to fix this problem is to divvy up the monthly expenses based on the
percentage of income each person contributes to the household. For example, if
you make $25,000 and your partner makes $50,000 he/she should be able to
contribute twice as much. Be sure to sit down together at least once a month
and go over what is being spent on what so each person is aware of the entire
financial picture.
Reason #6: One of you is a Secret Spender.
It may be that one of you isn’t used to
being accountable for your spending habits or that you fear the reaction of
your partner. But when your sprees or debt are discovered your partner will feel
betrayed, and you will be in the hot seat. You are more than likely already
deep in the relationship when this secret is revealed. If that is the case, get
a separate bank account for the spender and give him/her a fixed amount each
month to spend. If the situation is far worse than this then find a counselor
to help find out why the spender needs to keep secrets. The best way to avoid
this fight is to discuss spending habits before you merge your finances. Also
be sure to focus your conversation on the importance of trust.
Reason #7: Someone isn’t paying the bills on time.
The cause of this fight is because the person who was designated the “money
manager” is failing to meet the financial obligations and putting the family in
financial danger. Not paying the bills on time causes bad credit ratings, late
pay fees, even foreclosure or eviction. The person may be feeling overwhelmed
and might not want this responsibility. If that is the case discuss splitting
up the responsibility of paying the bills. Set a date each month to discuss
your state, goals, and any issues that come up. That way one person won’t feel
like he/she isn’t holding all the burden. Sometimes signing up for automatic
bill payments is the best solution to this problem. Just don’t place blame, try to find a
solution together.
Reason #8: One of you borrows money from family-without the other knowing.
Borrowing money from family is like working with family. It is not always the
best idea, especially if you are keeping it from your partner. Sooner or later
they are going to notice you’re making a monthly payment to daddy. This also
includes loaning money to a family member without discussing it with your
partner first. This fight comes down to trust. Discuss why this decision was
made alone. Your partner should always be your first stop when it comes to
solving financial problems. The first step is to check with your partner, if
he/she disagrees with borrowing or lending, talk about alternative options.
The best way to get financially organized and to view your entire financial
portfolio all on one page is by creating your own LBS site. We use the very
best security technology so your data will always be safe!
