Money is one of the biggest bones of contention in most of our lives. And it’s no secret that fighting about money puts massive strains on any relationship. Whether you are saving money for retirement or trying to put something together for a mortgage, money stress can overwhelm any relationship. It’s the number one reason couples experience stress in their relationship. Money issues are also responsible for 22% of all divorces according to the Institute for Divorce Financial Analysts. So what are the steps that couples can take to make sure money doesn’t override their relationship?
Understand Your Partner’s “Money Mindset”
If you and your partner have arguments about money, it may not actually be about the financial side. Any argument is, ultimately, a clash of different temperaments, and if you think that your partner is spending too much and there’s a lot of conflict about this, the issue may not be about the fact that you can’t afford it, but it could be something more deep-rooted.
For example, there may be a fear of not being able to pay the bills or having to file for bankruptcy because of ignorance or indifference to debt. The number of people filing for bankruptcy before divorce is slowly increasing and this is partly to do with a mismatch in attitudes towards money. But in order to fix this, you need to both understand the type of money personality you are. There are quizzes online that will determine the type of money personality you are. It’s a perfect way to understand your attitudes towards money. If you could begin to understand the other person’s approach to finances, it can help you both to focus on the bigger picture.
Start to Focus on the Same Goals…
As life goes on and things change, so do people’s priorities. The big problem for couples is when they don’t check in with each other to see if they still have the same goals. Taking the opportunity where possible to sit down (at least once a year) to discuss what they are working towards can help to align their financial goals. One side of the partnership may be looking towards paying off debt, whereas the other is saving up for a vacation. If you are both saving for different things and your total finances and not enough to pay for either component, both of you will be going nowhere fast.
You may have discussed the possibility of getting a mortgage together so that you can begin building your own legacy to pass onto any possible future children. Checking in on this to make sure you’ve still got the same opinion on this is important. It’s also a great time to talk about how you’re going to fund a mortgage, especially if you’re currently renting! Did you know that you can now get 10 year loans to help purchase property? Sit down together and go through all of your options so that you can start planning the next chapter of your lives.
When it comes to something like debt, it’s important to remember that, when you are married, you are considered liable for both sets of debt. So it is in your best interests if you are saving up for a home to collectively work on a debt management plan. Having a goal in mind will help to focus your efforts, but they have to be on the same thing. Because if one person is earning more money than the other, this can cause an imbalance of power.
… And Stop Focusing on the Differences in Salary
It’s very likely that one side of the couple makes more money than the other. But regardless of how much more one person earns, it can still cause power-play problems. Some people may not see the full pot as a collective effort. Some people feel that they have more power because they have more money. However, this is asking for trouble. This will only start to build a gulf between you.
Even if one of you earns money and the other one stays at home, the homemaker doesn’t have less say. You are both on the same team and have equal say on everything in your relationship, including money.
Have a Joint Bank Account
It is simple and it is one of the best ways to reduce disputes. Many couples think that to avoid arguing about money, they should keep separate accounts. Having one bank account that you are both paying equal amounts into means there is a level playing field.
There may be things that you want to buy that are for you, and this is why having a joint bank account is beneficial because the essentials all go out of that one account. When couples separate their money and split the bills, it can cause extra money and relationship problems further down the line.
Look at Your Lifestyle Choices as a Couple
Not everybody has the same hobbies. If you want to buy a new wardrobe but your spouse seldom updates their clothes, there can be a problem. It’s important to remember that any relationship is all about compromise and this is crucial to ensuring that you are both on the same page. So many people try to live a lifestyle that doesn’t match up to their income. When people buy high-end brands but they don’t earn enough to maintain this cost of living, this is when debt begins to accumulate.
Credit card debt is so easy to get into and as a couple, you need to both learn how to live within your means. This means taking the opportunities to discuss together what you can and cannot buy. Everybody wants to treat themselves on occasion, but when we do this, we have to ensure we keep our partner in the open on this. Some spouses stash cash away or purchase things that the other one doesn’t know about, which if the other person discovers, can be a barrier to financial trust.
The “B” Word!
Overstated, but essential, a household budget is the most effective way to keep track of your finances. And yes, it can seem tedious. But it’s one of the best ways to really make sure that you are keeping on top of your finances as a couple. When one spouse is in the dark about where their money is going, the unknown can cause anxiety.
It is so important for couples to collectively pool their money where possible, but also put a budget in place to ensure that they are living a comfortable lifestyle without going into debt. There are numerous online tools and apps that can help track your spending these days. It’s not a particularly interesting thing to do, but when you keep a budget, it gives you far better control over your finances.
Don’t Let a Third Party Control Your Finances
When we have an external force that is almost controlling our finances, we may find that the additional expense can eat into our budget. The most obvious and financially draining example is children. If a child is begging you for a treat or a toy and you’ve given in because they’ve been well behaved, this could cause money issues. Children can bring out how parents view money differently. That’s not to say that you shouldn’t purchase things for your kids, but it’s about identifying what everybody wants, needs, and what is nice to have.
This is where something like the 50/20/30 rule comes in handy. 50% of your after-tax income goes on needs, 30% goes on wants, and 20% goes into savings. And when you start to use this approach and think about how much of your budget goes on each aspect, you can use this as a way to budget for your children. As nice as it is to give our children everything they want, if we started to put a certain percentage away for things that our children need in comparison to what they want and what would be nice to have, we can justify that our children get lots of nice things, especially after the year we’ve all had.
We may think that our children deserve as many nice things as possible, but we have to learn to reign it in at some point. Getting into debt now it’s not worth it. And when our children seem to rule the roost as far as our finances are concerned, we won’t have any control over it at all and we will argue with our partner even more.
Time to Work Together!
Overcoming any money issue takes time and a lot of work. It’s exactly the same as working on your relationship. When you are on different sides, you can’t expect to work together effectively. Learning to discuss your finances in a productive way will help you both understand where you’ve been going wrong from the other person’s point of view, but also what you can do to work together towards a common goal.
The great thing about working together as a couple is that you can fill in each other’s gaps. This is not just the thing that makes a marriage work, but when it comes to formulating a plan, you’ve both got each other’s back and are able to fill in mistakes that the other one has made. Money causes so many arguments, especially when one person earns more than the other. But you are both on the same team, and when money becomes a big problem, you can either fight for your share or you can do what every loving couple does, and work together to create a solution.