Most married couples take a “divide and conquer” approach to household tasks and chores. One spouse might handle weekly shopping, and the other might handle taking out the garbage. One spouse might handle laundry and cleaning, and the other might handle yard work and maintenance. One spouse might drive the kids to school, and the other might handle pickup and extracurricular activities. But…
Household spending and budgeting are responsibilities that are best tackled together, as money issues are one of the biggest sources of marital tension and a leading factor in divorces.
Here are five ways that you and your spouse can make sure you agree on your household spending, avoid surprises, and maximize the best kind of life your money provides:
1. Have an open and honest discussion.
Many couples assume their attitudes about money are aligned. That would only be true if we all grew up with the same money experiences. Arguments start when, one day, the roof needs an emergency repair that taps a savings account, or someone walks in the door with an unexpected splurge purchase (or worse yet, hides it!).
Stressful situations are not the ideal time for a couple to discover significant differences in spending habits. Sit down with your spouse and have a thorough review of your finances and your monthly budget. Find compromises that will allow you to save for the future while still enjoying your present.
2. Understand the total household cash flow.
In many households, one spouse handles all the bill payments. This can lead to misunderstandings or arguments about where the money goes every month.
Both spouses should understand how much the household spends every month, and how your bills get paid. If you’re the one who’s usually in charge of bills, take an hour to walk your spouse through your process. Show him or her which bills are paid electronically, which are paid by check, the monthly amounts, and due dates, etc. This won’t just help both spouses understand the monthly cash flow, it will ensure that both spouses can handle household finances in the event of an emergency.
3. Be transparent about all assets and liabilities.
Newly married couples might still have banking or credit accounts that are only in the original account holder’s name. The other spouse might not find out about these accounts until a credit card is maxed out or a checking account is overdrawn.
Again, the less stressful your reason for talking to your spouse, the more positive the outcome will be. Financial secrets tend to come out at the worst times, compounding stress, hurt feelings, and strain on your budget.
Your spouse should be a co-signer and beneficiary on all of your accounts and vice versa. If one of those accounts carries a large liability, get out in front of the problem and talk about how to start paying it down. Discuss the ramifications of combining any large individual assets with a tax professional or your financial advisor.
4. Agree on a budget.
If one spouse is responsible for budgeting and bill pay, that person often becomes The One Who Has to Say “No.” No eating out this week. No weekend trip to the waterpark. No new cell phones. No new clothes.
Nobody likes being in that position, especially if you’re saying “no” to your children. Eventually, you or your spouse will resent being The One Who Has to Say “No.” You should both understand the household’s monthly cash flow and agree on how your money is — and isn’t — spent.
5. Get help.
There are a number of online sites and mobile apps that can keep you organized, create a budget, and maintain it. Automating select bill payments and regular contributions to retirement and savings accounts can also help to clarify your monthly budgeting picture.
Finally, if there’s a spending gap between you and your spouse that seems impossible to bridge, that is the perfect time to find a money professional to help. It’s important to understand where clients’ attitudes about money come from, how they’ve developed, and how they can diverge between couples. Facilitating this dialogue is key to making sure couples have the best life possible with the money they have.