Money is the leading cause of divorce and conflicts in marriages. For many couples, if they don’t get it right with money, their marriage never works out. Dave Ramsey writes,
“You can’t have a great relationship until you can communicate and agree about money. Money is either the best or worst area of communication in our marriages.”
While people visit hospitals, counseling centers, their places of worship, and even their parent’s homes before marriage, very few people seek financial guidance before they say, “I do.”
The problem of how to manage money in marriage starts at dating. The failure to discuss how to manage money in marriage becomes the onset of internal conflicts in marriages. What God has brought together, money takes apart.
In fact, the declaration, ‘until death do us apart,” should be changed to, “until money does us apart.”
Marriage comes with many financial benefits itself. For many, they can combine their incomes, enjoy reduced housing costs, health insurance that covers both partners, and many other benefits.
While these benefits are enjoyed, they do not get their fair share of attention. All the attention goes to the money problems that arise in marriage.
What Causes Money Problems in Marriage
Not Talking About Money
Money talks are one of the most difficult and uncomfortable conversations for partners. The topic goes without mention in dating. Lovers do not come up with a plan of how they are going to manage money in marriage, settle their expenses, and plan for their retirement as a couple. Conflicts arise as a result and in most cases, money talks happen when the disagreements have intensified and the two partners can almost not tolerate each other.
A Mismatch of Money Mindsets
A saver and a spendthrift will have a hard time when making financial decisions together. When one partner is trying to cut down on unnecessary expenses, the other one is arguing that ‘we only live once and tomorrow isn’t guaranteed.’
This is often fueled by a difference in levels of financial literacy. A financial literate person will understand the importance of a high savings rate, cutting down on expenses, and planning for retirement. The other partner may see this as if they are being denied an opportunity to live their life the way they want.
Money talks are emotional, people have different mindsets about money, and they tend to value different things differently.
Dishonesty starts before marriage when people do not disclose the assets or liabilities that they have before they get into marriage. Dishonesty about money issues quickly impairs the trust created in marriage.
In most marriages, it’s not the lack of money that brings conflicts. It’s how one spouse uses the differences in financial positions to manipulate the other. This happens when one partner earns a higher income than the other. Or when one partner is employed and the other is unemployed. The partner who is ahead starts feeling as if their spouse is a burden to them and that they are not contributing much to their financial wellness.
Money Is Not the Problem
“The main thing to remember is that most matters concerning money in a relationship are not really about money at all!”Anonymous
A drowning man will clutch at a straw and so is any partner who isn’t happy in a marriage. Many people tend to use money to express their anger or unhappiness with other issues in their marriage. For example, the wife may be unhappy about a decision that her husband made and end up spending more money than their budget for shopping.
In other cases, one of the partners may be unsatisfied sexually and bring about a money issue to express their anger.
The Three Ways to Manage Money In Marriage
Use A Joint Account
This is where you and your partner deposit your money in one account and use it to settle all your bills, save, invest and even plan for retirement together. This is one of the easiest ways to manage money in marriage because you are getting money from one place. It’s easy to track expenses and also to settle expenses because there is no planning needed to plan for who caters to what bills.
For this to work, however, you have to align your financial literacy, spending habits, and even financial goals. You have to be reading from the same page so that you can be able to work together from a joint account.
If not, resentment will arise as one partner will be judging the spending habits of the other. Conflicts will arise often due to disagreements on how one partner spent the money and did not please their spouse.
Use Separate Accounts
This is where the two parties maintain their separate accounts. They come up with a plan on how to settle bills and cater for expenses. They decide who pays for what and when.
This works well for partners who have different mindsets about money and who may have slightly different financial goals.
Communication must be at the highest level so that you both know who is responsible for what and at what time.
It works well for most couples because the involved parties do not have to change how they handle money. They can both spend their money the way they like provided they can comfortably meet the shared expenses. This eliminates a lot of disagreements and leaves little or no room for judgment and resentment.
On the downside, using separate accounts, if not done in the right way may bring division into the marriage or family more so when you have kids and other dependents.
It also becomes hard to split the expenses when you have so many shared expenses. At times, one partner will end up meeting an expense that should be met by the other partner. Keeping the record of who owes who and what amount may be tedious and a source of disagreements.
Using Both Separate and Joint Accounts
This is probably the hardest way to manage money in marriage. You have to open and manage both joint and individual accounts. Both parties contribute to the joint account but they still have money that they can use to meet their expenses that are not part of the joint expenses.
Here, you have to be very good communicators and planners so that you can set what expenses you are to meet using your joint account and what expenses you should meet using your individual accounts.
The good thing about this hybrid is that you can adjust it to enjoy the benefits of both separate and joint accounts while using it to offset the disadvantages of the two accounts.
Which Method Should You Use?
There is no right way to manage money in marriage. The best method is what works for you. The one thing that people miss out on is that just because one method worked for another couple, it does not mean that it will work for you. Depending on your similarities or differences towards money mindset and spending habits, come up with a plan to manage money in marriage.
Notably, one method may not work for you all through. Have money discussions often and use what works for you best depending on what is happening in your marriage. No matter what method you use, make sure you get it right with money.
How To Stop Fighting About Money in Marriage
Hold Regular Money Discussions
Many money disagreements arise because people do not plan and talk about how they are going to handle their money together.
Money talks are the most uncomfortable to have. However, if you do not have time for them, your marriage may not have time for you either.
Plan to sit down with your partner at least once every month where you discuss how you will manage your finances. This is when you create budgets, set ground rules about money, track your spending habits, decide how to settle bills, and even how to save, invest and plan for retirement.
Honesty, Empathy, Patience and Understanding
Whenever you are talking about money, honesty is of importance. Dishonesty about money quickly destroys the trust that you have in your partner.
Be empathetic when judging your partner’s spending habits and financial decisions. Be understanding since you are dealing with your life partner and not a robber who is trying to steal your money.
Be patient with one another. Give each other time to adjust to new plans, budgets and even to align to new financial goals.
Share Your Financial History and Future
When you are coming into marriage, make sure you know all the assets and liabilities that your partner comes with so that you can know what financial risks you are associating yourself with.
Moreover, make sure your partner is comfortable with your future financial goals. The person you marry will affect your future financial position. You do not want to live with someone who cannot stay out of debt. You may end up losing your assets as a result.
Have A “Fun Money” Section On Your Budget
Even though transparency and honesty should be highly upheld, give each other room to do whatever you want with money without questioning, explanation, or judgment. Allow each other to spend a certain percentage of your income on the things you like or want and drop the rule of having to be answerable.
Fights Never End, Learn How To Fight Well
Money disagreements will not cease just because you have a plan in place. They will only reduce. Make sure you communicate well, you maintain utter honesty in your conversations at all times, and most importantly be understanding and empathetic when talking about money issues with your partner. Don’t call them irresponsible or foolish just because they made a money mistake.