how to talk about money with your spouse
according to an article published by psychology today, arguing about money breaks up more marriages than anything else. the article talks about everyone having a “money personality” and how we need to “develop a mutual recognition and respect for the other’s dissimilar personality.” it mainly talks about how people are either spenders or savers. i don’t think it’s that clear cut but i do think it’s vitally important to recognize and try to understand where your partner is coming from and why.
during the first few years of our relationship, ravery and i maintained separate bank accounts. it was really important to me to maintain my own financial freedom and i saw that as having my very own bank account. this worked fine, ravery was respectful of this and it worked for the time being. that was until he got a job that took him away from portland for months and i was in grad school not making any money. we had been engaged for about 1 year at this point (we had a 2.5 year engagement). the below picture is of *our* engagement rings over multnomah falls in oregon. i hope you can see the heart shaped water below the water fall because some people have challenged me on this.
without hesitation, we skipped to the bank (skipping burns more calories) and he put me on his account so i could pay rent, the bills, eat food and even get 2 lattes a week (we are always on a budget)! he set the precedence that he trusted me with the money he was earning and then said, “yes, i may be bringing it in right now but it is our money.” i’d love to be able to say i instantly gave him equal access to my bank accounts but it took a litttttle bit more time. after he got back from his tour (where he worked for a mobile marketing campaign with NIKE and drove this badboy around) -we sat down to talk about finances.
whether you are sharing all of your accounts, have 1 joint account or keep things completely separate, these were helpful things we did to be able to talk about money and what it would look like for our relationship:
1) sit down and talk about your first interactions with money and how it was talked about growing up
we sat down (i saved one of my lattes allotment for this conversation) and discussed how our relationship with money had started. i remember getting a small allowance and my parents giving me envelops entitled “savings, church, spending” so i would divide up the amount among them. this gave me a great foundation of realizing i should not be spending everything that comes in but rather distributing over things that are important. ravery also received an allowance and his parents were very good about if he wanted a car, then he would have to pay for it himself. if he wanted spending money, he would have to earn it. if he wanted to go to an out-of state college, he would have to pay for the out-of-state costs.
his parents were also very vocal about how much money they made, what things cost them and their investments. my parents didn’t really talk about money openly, it was seen as more of a private matter. this was important to note the difference because ravery is a lot more willing to speak very openly about finances, has been known to ask others point blank about how much their things costs while i am much more reserved about it and feel uncomfortable when he does such things.
2) identify core values and see how this relates to money
this took some time for us but was well worth it once we came to an understanding of how we wanted to divide up our money. we decided giving back was the most important to both of us.
we always wanted to be giving to organizations, causes and good things without just using whatever might be left over in our account. we decided to give 10% of our income to “good causes” and keep that in a separate account. traveling is also very important to us so we put 10% into our travel account for visiting family and friends, taking at least 1 international trip a year and other fun things related to exploring the world. our last important value we identified was saving for our future so we put about 25% into a savings account and use a small portion of that to try our hand at investments. the rest of our money ends up in the “everyday account” for bills, groceries, fun, clothing, etc.
3) create and then stick to a budget
i can’t tell you how annoying it was to track all of or expenses for a month but i can tell you how helpful it was to see where our money was being spent. from this, we were able to categorize what we were spending, ways we could cut back on spending (like my coffee habit thanks to grad school and living above a starbucks) and how much money we needed for just basic living without any of the fun things. after that base number, we could see how much was left for eating out, getting a new jacket or going to a concert. i know that mint.com is very helpful in doing this for you if you use debit/credit cards a lot.
we printed out our monthly budget and posted it in the kitchen so we could write down and then reference how much we had to spend on what. after your senses are hightened from a few weeks/months of doing this (and going through a slight caffeine withdrawal) it becomes second nature and you actually end up with a lot less stress over money, your relationship and saving up some money to not only eat out but get dessert afterwards too!
4) talk about a mutual agreement when it comes to spending on bigger ticket items
after dividing up our money on the first of the month between our “values accounts” we both agreed that whatever was left in the everyday account could be spent how we saw fit as long as the purchase was less than $100 since what we truly value has been covered. this solved a lot of our problems when i would come home with a new puzzle, more crafty things (i could/do spend hours in craft stores) or would buy my lattes. i also felt less annoyed when i saw him buying more ties (shout out to Tie Society for putting a stop to this tie addiction) and socks. if we did want to purchase something that costs more than $100, then we would put it out on the table and talk about if we could afford it and the use we would get out of it.
5) take a break from talking about money and go have fun together
it can be very exhausting to talk about finances and money, particularly if you have very different feelings towards spending and saving or even if you don’t. it’s really important to take breathers when needed and just to have some fine. cribbage is usually our go to game (it’s not just for grandparents people, c’mon!). sometimes we even get dealt matching hands and that’s how i know we are soulmates even more.
we used this system for about 4 years so far and it is still working even after starting our own business. this formula carried us through when ravery was working and i was in graduate school, when he got laid off and i was the only source of income, then when i got laid off and he was the only income and then eventually when we both had incomes from our non-profits. my point: we did this for multiple years on not a lot of income and were still able to get the things we needed, many of the things we wanted and still go to happy hour.
wife lesson: take the time to set up the system that works for you about money so both of you can feel confident about how your money is spent.
1) do you share bank accounts with your significant other?
2) what’s been a recent source of conflict for you around money?
3) what other tips would you add around talking about or spending money?
4) if you live in houston or have been here…i’m looking for a good happy hour here!