One of the most pressing, painful and significant issues within a marriage can be the problem of finances. For some, this presents no significant hurdle whatsoever — often because the money is flowing, and there are no pressing concerns. However, this can be a bandaid over problems that eventually show themselves when the (inevitable) crisis strikes.
Most of these are in denial. The rest of them are looking for a quick fix. Even a financial planner can’t help unless the couple is willing to make five simple commitments. You can always choose to find something to fight about. But if you are serious about removing the financial obstacles in your love life, you should commit to the following money management rules.
Whether you are in crisis or not, there should be at least five major commitments within a marriage on the proper handling of money. Abiding by these principles will only bring you and your spouse closer together, and will help you to signal to one another that you are committed to partnership in every area:
1) Do the hard work of ensuring that you are fully open about your finances. It’s a fact that I’ve seen that most arguments within a marriage aren’t about to spend money in the future, but, in fact, about how the money was spent in the past. The surest way to avoid these sort of issues is to provide one another with an open and honest accounting of how money has been spent … which will only breed confidence for how it will be spent in the future.
2) Pay yourselves first. This is a common staple of investment and savings advice, and it’s all the more essential to make a commitment towards this within a marriage partnership.
Take the time to come together on an appropriate savings + investment rate, and do it in a way that will be easy — i.e. automate it.
When you automate your savings (and your investments), you protect yourself against the concerns of the month that might sap your resolve. It’s far too easy to not write that check to an investment or savings account when Johnny needs a new bicycle, or Jane needs braces.
Automate your savings, and consider those amounts sacrosanct.
In certain cases, making the commitment towards savings may even need to be a priority over reducing debt. Dave Ramsey and others speak about the “debt snowball”, and it is wise advice. First adjust your lifestyle so that you are spending less than what you make. In this way, you can avoid making the debt spiral worse.
This leads to my next piece of advice…
3) Agree upon how you will use credit. Credit cards can be very advantageous for many couples … but these advantages become serious disadvantages when they are not handled in a previously agreed-upon manner.
Silo your credit card spending into specific budget categories (like gas, groceries, etc.), and avoid using them for “impulse” categories such as eating out, or other such optional spending.
One of the problems couples face with the use of credit cards is that it enables the ability to not face their financial problems. It makes spending easy, and can lead couples who are facing financial difficulties into worse ruin.
Give each other the ability to “veto” the use of credit cards altogether, or for particular categories, and you will have done well in your financial communication and care for one another.
4) Agree upon a “slush spending” amount. Anything that represents a significant budget item is best agreed upon in advance — but that doesn’t mean that you must check in with each other over every purchase within a marriage.
Young couples can set this amount to a low number, and as they get more experience (and cashflow), move that number to a higher level. But it should be clear that any purchase above that level would require and trigger a mutually agreed-upon decision.
5) Finally, agree not to stick your heads in the sand! It’s probably wisest that finances shouldn’t be handled only by one spouse in the marriage. Sometimes problems arise within a marriage because one of the partners decided “not to care”. If that’s you — well, you’re probably not reading this — or if that’s your partner, do the hard work to come together in this area. If you aren’t taking the time or interest to be involved in the finances, you might be problem. Get some help, and start the process of discovery.
Look, I’m not a marriage counselor. But I DO know good communication when I see it. And that’s what I’m here to help you with.
“Lots of people want to ride with you in the limo, but what you want is someone who will take the bus when the limo breaks down.” – Oprah Winfrey