In a marriage, two become one.
Whether you like it or not, the moment you say, “I do” your money is no longer your money – it is now “ours”. Personal finance, handling money and making important financial decisions is a joint venture – at least if you want a lasting marriage it is!
It’s amazing that after six years I still have to fight my natural tendencies to want to do things my way – selfishly.
I came across a fairly recent Fidelity study from June 2009 that states:
The results show that despite two years of unprecedented economic and financial instability, which has severely impacted most American households, husbands and wives have done little to improve their communication, planning and management of retirement finances.
Of great concern is that only 15 percent of couples feel confident that both of them could assume responsibility for their joint finances if necessary.
I found this to be rather shocking – although I guess I shouldn’t let it surprise me. Only 15 percent of couples actually feel confident to manage finances jointly if necessary?
Take a look at these numbers:
The study found that less than half of couples make decisions jointly regarding the day-to-day financial decisions of the household such as budgeting and bill payment (45 percent).
Even fewer couples jointly discuss investment decisions for retirement savings (38 percent).
On critical retirement decisions, 60 percent of couples don’t agree on their respective retirement ages, 44 percent are not in agreement on whether they will work in retirement, and 42 percent have different ideas regarding their expected lifestyle in retirement.
Now don’t get me wrong – my wife and I do not do things perfectly, nor do we communicate as well as we could or should when it comes to personal finances. We have found a system that works for us – my wife handles the day-to-day and I handle the bigger picture, investment types of decisions.
Every so often we sit down and have a review of our overall situation and make any adjustments as necessary. The point is we are still talking about what’s going on.
So why do so many couples not view their finances as a joint venture? Here are a few reasons I came up with:
Couples often disagree
Say it ain’t so! I know, I know – I wish it weren’t true, but it is. Couples often disagree. We are all unique individuals so it’s unrealistic to think that couples will agree on every decision.
Because couples disagree it’s easier to avoid those discussions rather than face them head on.
The question is what do you do with that disagreement? Do you argue, belittle and disparage your mate to try to get them to agree with you – or do you discuss the points of disagreement calmly, while trying to seek a better understanding of where your spouse is coming from?
Couples have different money personalities
Have you ever noticed that many times a saver marries a spender? Or, a person who really, really loves “wining and dining” marries a homebody? A person who loves to roll the dice with their investments marries a conservative investor – I could go on…
Why is that? Opposites often attract – and that’s a good thing! As much as you might like yourself, you wouldn’t want to be married to someone just like you.
Different personalities contribute well to the marriage – and it’s actually good for managing finances (although not fun sometimes) because each person brings a unique view.
It’s hard – and I need help with this too – but we should celebrate the differences in money personalities that our spouses have rather than get frustrated with them or always think that the way we handle money is the right way.
How do couples resolve their differences
The big thing I noticed with this study was the lack of communication. That is the key right there. If couples aren’t communicating then there really is no chance for resolving differences or misunderstandings.
I’m going to talk directly to the guys for a second – we’re often not the best communicators, but that doesn’t give us an excuse for not talking with our wives about our thoughts, frustrations or decisions when it comes to money.
So guys, get out of your comfort zone and talk to your wife! Plan a little coffee night - head to the local Starbucks and sit down together with a pad and paper and talk through your personal finances – and listen intently.
If you really want to get ahead financially and make big strides both spouses need to be on the same page! Managing your money successfully is a joint venture!
You make a good point with “my wife handles the day-to-day and I handle the bigger picture, investment types of decisions.” It’s good to have different functions within the framework of overall agreement, that way disagreements over specific tactics are kept to a minimum. One spouse might be better at big picture management, the other in more routine matters. That’s where two become stronger than one.
The downside is where the two spouses are in agreement that one should manage the finances completely. In death or divorce that arrangement can be an unmitigated disaster for the non-money spouse. There’s too much of that type of arrangement unfortunately, and the realization of it’s limitations usually don’t surface until it’s too late.
The “joint” in joint venture has to be active!
Kevin@OutOfYourRut´s last blog ..Ten Ways to be More Productive in Business and on the Job
I agree with comunication being the critical issue. While spouses may not agree on all money issues, they need to at least have open discussions about these differences.
Ken´s last blog ..Getting vs. Giving
@ Kevin – Agreed. There does seem to be a lot of the “one spouse handles everything arrangement”, which isn’t good in the case of a loss of the loved one.
Our set up isn’t perfect, but it works for us and it keeps us both involved.
@ Ken – communication is the lifeblood of any relationship. It can be hard sometimes, but sooner or later it has to happen openly and freely.
As you mention, and as has been shown by research, spouses often have opposite financial “profiles.” The husband might be the saver, while the wife is the spender, and vice versa.
The best solution that I have come across and would recommend to everyone is the envelope budget.
Most money fights happen because of this constant struggle between saving and spending. The tension is always there, with one party trying to “win” over the other quietly and as much as possible. Maybe sometimes you get together and talk about it.
When you use any form of envelope budgets, you talk about things at certain times–and you iron out your exact allotments up front. You get it all out there and come to a consensus. Then what? No tension for weeks or months, until you meet to come to a head again.
Wojciech´s last blog ..How to Take Advantage of a Crappy Economy
A good and relevant post here. Of course a marriage is a partnership, and as is the case with any partnership, finances need to be discussed and managed otherwise it can create lots of problems very quickly for the finances and for the partnership/relationship.
Many people tend to overlook this and feel that finances will just work themselves out. What a mistake that is,- and articles such as yours really help to alert couples to the pitfalls (and opportunities) that exist.