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Why It's Important to Manage Money as a Couple
While a lot of financial education continues to be geared toward men, according to ConsumerCredit.com, “Nearly 80 percent of women in relationships bear the responsibility of managing household finances – often with little help from their significant others.” (Source) This means it's important to manage your money as a couple to make sure you're on the same page as your partner.
I’ve certainly found this to be true during my 17-year marriage to my husband. In the early years, when we made about the same salary, we split our bank accounts and contributed equal amounts to shared expenses. We took care of individual expenses and bills on our own and had a bi-monthly money date night.
As my husband's salary grew (more than mine), we moved to a more complicated arrangement: paying a ratio of our income to shared expenses. Once we had kids, I became a part-time entrepreneur and began earning a lot less than him. At that point, we stopped having separate accounts and I fully took over managing the day-to-day money stuff.
“In part because we had kids and ever-increasing career responsibilities, we stopped talking about our money, which led to a lot of misunderstandings and conflict.”
The wife taking over the financial responsibilities is more common than we think. In my practice, it’s almost always the wife who decides it’s time to seek out some help, typically because she spends the most time managing and thinking about their finances.
It’s easy to assume you’re on the same page with your family’s spending and saving, however, this usually leads to a couple only finding out how the other feels when they get into a fight. In fact, there’s nothing more polarizing for couples than talking about money. Numbers are black and white, but the way people think and communicate about the numbers is very gray.
3 Things a Couple can do to Balance Talking About Money and Taking on Financial Responsibility
1. Review Your Finances Together
Look at your bank accounts and credit cards to get an idea of what’s being spent, see what’s in savings and retirement savings accounts, and most importantly, talk about why you’re each spending or saving as you are and whether that makes you happy.
2. Schedule Regular Money Date Nights
It’s a smart way to force yourself to talk. Maybe it’s important to one of you to have an emergency fund, while the other wants to save for an annual vacation. One of you may be concerned because you don’t think you’re saving enough for retirement. Unless you make the time to share these types of thoughts with your partner, they may not come out and lead to each of you feeling burdened by them.
3. Work With a Financial Professional
Using an impartial third party can often take the emotion out of dealing with money. I have couples who are new to my practice complete questionnaires about their financial satisfaction and the life transitions they have coming up. Sharing the results highlights the areas where each person is different, and where they’re aligned.
I can then ask deeper questions of both partners to uncover what’s most important to them in life before relating it back to their money. I’ve found that couples are often surprised by their partner’s answers, leading to a more engaging conversation.
I think just about every couple on the planet has, at some point, had a heated discussion when it comes to household finances; we all come to the table with our own experiences and relationships with money. One of the most powerful things you can do is keep the lines of communication open by having regular conversations about your finances.
And when your financial life gets more complex or you find yourselves in conflict, It can be helpful to work with a financial planner who can facilitate your money conversations and offer an unbiased analysis of your situation. Talking about money can be awkward and emotional, but if you’re ready to find out how a financial planner can help you, CLICK HERE.
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Disclosures
No investment strategy assures success or protects against loss. Investing involves risk, including the loss of principal.