When two spouses do not see eye to eye on money, it can trigger more than the occasional unpleasant conversation. According to a Utah State University study, married couples who reported disagreeing about financial matters once per week were significantly more likely to divorce than those who reported financial-related disagreements less often.
The secret to sidestepping financial conflict is the same as managing other sources of tension that might arise in a marriage. It involves frequent, open and honest conversations, while maintaining a shared commitment to a solution.
Developing communication strategies can bridge potential divides before they become chasms and can strengthen both your relationship and your finances. They include the following:
Discuss Finances Early On — The best time for difficult conversations about money is before you commit to major life decisions with financial implications. Especially if you are relatively early into your marriage and have never shared finances before, you may not be fully aware of the potential sources of money-related conflict that can await you. Irregardless of how long you have been together, it is imperative to discuss both your near and long-term financial goals.
Manage Spending — Different spending and savings styles can be a big source of conflict among spouses. This is especially true if one makes big purchases without the other's consent. To maximize each person's independence while minimizing the potential for serious disagreement about his or her choices, consider implementing an automatic spending threshold. For example, anytime you want to spend $500 or more, talk it over with your partner first. The amount is not the important part — it is the principle that you are both in this together.
Share and Share Alike — When it comes to your financial accounts, operate on a full-disclosure policy. You should both understand what you own and what you owe, how much you make, and how much you have saved. In addition, both of you should have equal access to bank, investment, mortgage and loan account statements.
Think About Education — The type of education to pursue for your children and how much to spend are big financial decisions. But they can also be emotional issues, especially if you and your partner have fundamentally different views shaped by your own experiences. For example: Do you favor public or private elementary school? Would you prefer an in-state public college or an expensive private or out-of-state university? Will you pick up the full cost of college and/or graduate school, or should this be your child's responsibility, at least in part? Rather than assume you and your spouse will be in agreement, discuss these issues well before it is time to begin paying tuition.
Consider Retirement Scenarios — Successfully making it to retirement involves a series of important financial decisions. Will you and your spouse retire at the same time? How do you want your retirement to look? Do you both plan to continue working in some capacity? These are all lifestyle questions with big financial assumptions behind them. If you dream of leaving your job early to travel the world, while your spouse wants to earn more wealth to assure a comfortable old age or to give to future generations of loved ones, you will need to hammer out a compromise early enough to shape your retirement plan accordingly.
Take the Numbers at Face Value — If you are considering a major purchase, or wondering whether you need to save more to achieve your shared retirement goals, you may be able to sidestep emotional discussions by doing some simple math. Often it takes the cold, hard logic of a spreadsheet before you realize whether what you want is possible given your financial situation, or whether you will need to save more to make it so.
Go on Auto-Pilot — Once you and your spouse agree about how often to save and invest, move that decision from theory to practice by automating as many of your financial decisions as possible. For example, if you both agree to save $2,000 per month, set up an automatic investment plan with your financial institution to ensure this agreement actually takes place.
Talk — Having just the occasional conversation about your finances may not be enough. Your financial situation is constantly evolving, so planning regular discussions can help you both stay on the same page. Another worthwhile option is for you and your partner to attend regular meetings with your financial advisor, so that you both always know where you stand.
Make the Commitment
Money conflicts between spouses do not go away. If they are problems now, they will likely grow bigger over time until you are ready to address them together, openly and honestly. But the good news is that, when you do, you are setting the stage for a healthier financial plan and a healthier marriage.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.