Money is the thorn in many couples' relationships. More than half of couples argue over money, and money disagreements are the number one reason married couples say they divorce. If you and your partner don't always see eye to eye about your finances, take a look at these strategies that could help end the conflict once and for all.
Understand the Your Distinct Relationships with Money
It's no wonder money is the topic couples fight about most often, since people with different values and experiences with money will hardly ever completely agree about how to manage it. Even if two people have similar childhood backgrounds, their views on money could be dramatically different. One person, for example, might think "I grew up with almost nothing, so I'm going to save as much as possible and never want for money", while the other person could think "I grew up with almost nothing, so I'm going to enjoy the money I earn now."
Ofte,n when we fight about money, it's not so much about what we're spending it on, but what the money represents to us. Psychology Today says there are two essential perspectives or "money personalities" people have:
1. The Spender (seen unfavourably by their contrary partner as a "spendthrift," "squanderer," or "compulsive shopper"). Money is an invaluable commodity. It can be used in a multitude of ways to increase personal welfare, satisfaction, pleasure, excitement, joy, contentment, and so on. Exchanged for the right goods and services -- and/or given as gifts -- it contributes to one's security, independence, happiness, and well-being. Moreover, it's a great advantage to have enough money (or credit) such that one doesn't have to be preoccupied with how much something costs. One can simply buy whatever one most desires, and so derive maximum gratification from it. In short, the value of money emanates precisely from its "spendability."
2. The Saver (seen unfavourably by their contrary partner as a "cheapskate," "tightwad," "hoarder," or even "miser"). Money is an invaluable commodity. In fact, It's so valuable that it ought to be cherished, held in the highest esteem -- and coveted. For if it's scrupulously safeguarded, it offers a person a most gratifying sense of accomplishment, stability, power and control. It's actually best not to spend money at all but to conscientiously invest it -- to protect it (or "grow" it) all the more. And because money is so precious, when it's spent it ought to be done with utmost circumspection. So gratuitous, frivolous, lavish or extravagant purchases cannot be justified -- and ought to be rigorously avoided. Additionally, wasteful, self-indulgent expenditures should be kept under strict control. Rather, money needs to be handled "wisely" (i.e., with great discretion and restraint). Moreover, having or achieving considerable wealth hardly constitutes sufficient reason to be profligate about one's finances. For regardless of material circumstances, money is something to hang on to. In sum (no pun intended), the value of money lies not in spending it, but saving it.
While you and your partner's views on money might not be so black and white, the first step is to see what money really symbolises to each of you. Do you spend money as a sign of affection or to increase your happiness? Does having it make you feel successful or respected? Do you relate money with safety and security?
Discussing this with your partner can help you both find some common ground or at least understand where the other person is coming from. If you're a spender, see if there are other ways to fulfil what spending represents to you. For example, instead of buying extravagant gifts for others as signs of your affection, maybe spend more quality time with them. If you're a saver, try to step back and see if small purchases are really worth getting upset about in the large scheme of things -- and how much you really need to feel secure.
Create a Shared Financial Plan
What do couples fight about most when they talk about money? Yahoo! Shine says it's mostly debt, then spending habits and saving money for retirement. So instead of arguing about the same things over and over again, go over your financial goals and priorities together (these worksheets can help ), and then have a plan you both agree on to tackle debt, maintain your budget and invest for those golden years when you'll have nothing to do but enjoy the fruits of your labour.
Go Over Your Finances Together Often
The road to divorce is paved with secret bank accounts and hidden receipts. (It's insane that one study found nearly one in 10 women have a bank account or credit card their partner doesn't know about, and about half of all spouses have hidden their holiday purchases). Seriously, even if one person is more comfortable or capable with budgeting and bill paying, neither person should be in the dark on the state of your finances overall. (Also, if one person is the main money manager, make sure the other person has access to vital information such as bank account numbers and where your life insurance policies are, just in case.)
Ideally, you would have a deep talk about money before you merge your finances together, and then have an ongoing conversation after that. At least every month, discuss the bills and how you're doing on your budget, and then every six months go over your savings and debts. Shared money-tracking tools help -- but they will only work if both people are communicating honestly and willing to work together. Get Rich Slowly describes one way to do a weekly review:
I print a copy of the budget that shows the amount we allocated for each category and how much we have remaining. We review each category and discuss the amounts remaining and any expected expenditures for the week. If we are short in one area and over in another, we move the money around. If we are just short, we either decide to cut back and not spend, or we pull the funds from the emergency fund.
Try to avoid talking about money in a judgmental or nitpicking way, such as "There's this $50 restaurant charge. What did you order? Couldn't you have gone somewhere less expensive?".
Give Yourselves Allowances
Often, money arguments are all about control and freedom. It feels unfair that you're not "allowed" to buy that new gadget while your partner buys new clothes on any whim. The simple solution to this is set aside "fun money": an amount each of you are free to spend (or save) every month, no questions asked. Alternatively, you could set up a shared bank account, which you both deposit part of your income into, and then save a percentage for yourselves in separate accounts.
Have a Plan for Windfalls and Setbacks
You will have good financial times (hello, tax refund!), and you will have setbacks (great, the car broke down). Save yourselves the trouble of arguing about what you're going to do during those stupefying moments by discussing what you'll do in those scenarios.
You could agree, for example, that if one of you gets a bonus, half of it will go towards debt, a quarter towards savings, and the other amount split into your fun money accounts. Otherwise, when the time comes, you might get into a debate about using the money for a holiday versus buying stocks.
And, because nothing stresses a couple out like not being able to pay for an emergency, an emergency fund should be high on your shared priorities list.
In short, money is a sensitive topic for many of us. There's no "right" or "wrong" way to handle your shared finances, although (even if your "money personality" seems best). Agree to disagree about what money means, but try to focus on your shared goals and how to get there. If worse comes to worst and money arguments seem to be pushing your relationship over the edge, visit a financial planner, who could offer more objective, less emotionally charged advice.