A Lesson Learned about Marriage and Finances
Today I’m going to tell you one of the biggest, most impactful lessons I’ve learned in the last six years of my life. It’s one of the secrets that will allow you to improve your marriage, master your family finances, tackle debt, invest like a pro, and retire like a boss.
What is this secret you may ask?
Is it an expensive degree in finance from a university? A contract with a financial adviser that will dot all of your i’s and cross all of your t’s for you? A fancy stock-trading system that is fool-proof and guaranteed?
No, no, and no!
The secret is: You’ve got to work as a TEAM with your wife, husband, or significant other.
But before you close down your laptop and put a check mark next to finances on your to do list please remember that is is never as simple as understanding that you need to work as a team. You have to believe it. You have to live it. You both have to admit to each other that you are co-responsible for your marriage and finances and in order for you to be successful you will have to start doing things together.
Why is Working Together So Important?
My wife and I have been on the same “team” since well before we were actually married. Our children (twins!) were born when we were in our early 20’s which is a time in which most people are still trying to figure out exactly who they are and where they are going in life. We had some short-term plans and a general idea of what we wanted to do, but children was not something that we had on our radar at the time.
You’ve Got to Make Decisions Together
We learned very quickly that children will solidify your plans VERY QUICKLY!
As new parents with no money and without much of a safety net we were forced into survival mode early on in our relationship. The babies were our number one priority and we would do whatever it took to ensure that they were happy, healthy, and taken care of to the best of our ability. Although we did not have much money we firmly knew our priorities and what we needed to take care of them.
Even though we didn’t have much money and neither one of us really had a firm handle on what we “should” be doing with our finances we had one thing mastered:
We did not make purchases without discussing it first.
This included groceries, baby toys, entertainment, clothes, everything!
Finances Are the Most Common Problem in Marriages
I’ve heard so many horror stories that involve couples fighting over how the other person is spending money. Most of these stories start out with something like this:
“Well, I have a job and she has a job. I have my own checking and savings account and he has his. We split up the bills, but for the most part we each do our own thing. We have issues when it comes to planning for big vacations, future medical expenses, the kids’ college, and that kind of thing. We’ll just cross that bridge when we get there because we don’t like to talk about it because we’ll just end up arguing!”
Does this sound familiar?
Notice that nothing about this scenario sounds like a team effort? I’m not saying that you HAVE to completely merge your finances, but if you don’t then you’d better have a unified plan that you can both agree on. When you are “doing your own thing” with “your money” it can create resentment, blame shifting, and an inability to plan and save for the future.
What’s the solution?
Creating a Plan for Your Marriage and Finances
My wife and I don’t fight about money. We never have. Sometimes, we get frustrated that we don’t have enough money, but choosing what to spend it on has never been an issue because we talk about everything as a team.
You’ve got to create a plan for your finances and how they will fit into your marriage. There are enough things to worry about in a family besides money. In an ideal world it should be the least of your concerns. Obviously everyone’s situation is different in terms of income, but everyone’s plan should include these basics.
Step 1: Defining Success
What does success look like to you? What does it look like to your partner? Here’s what my situation looks like:
Me: I would like to have financial peace. I want to have a stable and growing income (hopefully with more and more independence), live in a nice area with a great community, own my own house and vehicles, be debt free, and have things like the kids’ college and my retirement to be automated and on track. When we’re able I would like to travel more and maybe live in a different part of the world.
My wife: She wants a nice house (preferably in New York City!). She also wants our girls to be able to do all of the extra things they want to do (dance, gymnastics, piano, etc) without having to worry about paying for them. She wants to have all of our finances under control so that we have more spending money available so that she can spend money without feeling guilty about going out to eat, having a night at the movies, travelling, or going on a nice vacation every year.
These ideas aren’t that much different, but you can see how we each have slightly different drivers towards the same idea. I have a 9-to-5 job so independence and growing my income is more important to me. She runs a business from home because she wants to make sure that we don’t sacrifice important things now and doesn’t want to feel guilty about paying for them.
Our idea of success with marriage and finances will certainly change as time goes on, but we are pretty closely defined.
Step 2: Aligning Your Priorities
- Are you trying to work 80 hours a week so that you can climb the corporate ladder?
- Do you want to be home on nights and weekends so that you can be with your family?
- Would you rather live modestly most of the year so that you can splurge on a big vacation once a year?
- Do you want to be debt free and she wants to max out the credit cards?
It doesn’t matter what it is that you want to do, but you’ve got to have these priorities set pretty firmly.
In my case family is a huge priority. We made the decision very early on that my wife would not work so that she could stay home with the children and make sure that they had all the attention and love that they needed. It made things harder for us financially, but looking back I’m very happy that she is able to stay home with them.
We make sacrifices in other areas so that our children get what they need and neither of us is resentful of that fact because we choose that priority together.
Step 3: Agreeing on a Method
I talked earlier about the couple that seemed to be running things “their own way”, but I also said that it wasn’t essential for you to combine everything into one big account in order to have great family finances. What IS important is that you agree on whatever method that you think is best. If you have a great system for splitting up the bills, saving for future expenses, and managing spending money separately then that’s great!
I personally think that if you are married and on the same team then it makes the most sense to put all of your money into one basket so that you can make things less complicated. It also eliminates any trust issues that could pop up from things like hiding money or spending from your spouse. Can’t hide anything if you are both looking at the same statement! My paycheck goes into the checking account and her business income goes to the same place. From that point we can budget our spending and plan for the future much more simply.
If you are planning on using some type of budget it is essential that you are both aware of how it will work and that you can both contribute to it.
Step 4: Supporting One Another
If you love your spouse then you know that support is the single most important thing you can give them. You should be there to catch them when they fall. You should be there to encourage them when they lose faith. You should be there to protect them when they are feeling vulnerable.
In my house we talk about “our finances”. We don’t have any separation in how we do things. We also support and motivate each other to keep us on track for our goals. When I first got into budgeting our spending, for instance, it didn’t work when I was the only one doing it. It wasn’t until my wife got on board, learned the system, and started to get more and more involved. Now we hold each other accountable for keeping the budget updated and it is working as intended: limiting spending that we can’t afford!
Enjoy a Less Stressful Life by Mastering Your Marriage and Finances
None of what I talked about here is rocket science. It’s not hard to understand that you have to work as a team in order to have a happy marriage and financial peace. What is hard is taking the time to ensure that you are on the same page and working together on your finances.
If you manage to do that you’ll certainly have a less stressful life before you know it!