If my relationship status on Facebook referred to my relationship with my wallet versus my husband, I’d quickly go from “Married” to “It’s complicated.” Unfortunately, that complicatedness often carries over from our affairs of the bank to our affairs of the heart and, unsurprisingly, financial disagreements are often the cause for relationship and marriage breakdowns. Not infrequently, financial counselors also become marital counselors.
And though it’s sad that the two factors have become inextricably intertwined to the point where a healthy partnership can feel like Act II of La traviata, it’s something we more or less are required to accept—especially in an age where six-figure debt loads have increasingly become the norm. Like your partner’s tics and quirks that can quickly go from charming to infuriating, there’s not much you can do to change the new status quo. So, instead, here are three baseline principles as to how you can work with this shift and maintain balance in both your home and financial lives.
Honesty (and Honest Dishonesty) Is the Best Policy
The other day, my husband took out some cash for the farmer’s market. It was shortly after Thanksgiving, so we didn’t need much but wanted to get some fresh cider and fresh greens—basically anything that wasn’t smothered in butter or cooked into carb-ic oblivion. As I stood contemplating a bag of cider donuts, he mentioned that we had used up the cash he’d taken from his bank nearby. Hours later, as we were walking into a movie, I asked if he had any cash left over to use for a bottle of water. He pulled out a few singles, nestled in his wallet with a pair of fives. He hadn’t been to the ATM in the interim, but I knew that what he had meant was that he did have additional cash when we were at the farmer’s market but that it had been earmarked for the rest of the day.
No one likes to talk about money in early stages of courtship. Match.com doesn’t have a dedicated space to go over your monthly budgets, and no one wants to be the first person in a relationship to broach the topic of dating frugally. Thus, these major matters often get buried in social niceties and the desire to put one’s best, financially worry-free foot forward.
According to a 2011 Forbes poll, co-commissioned by the National Endowment for Financial Education, 31 percent of Americans who share finances with their spouses have lied at one point or another about money, hiding purchases large or small, fudging debts or take-home pay, and even having secret bank accounts. Another recent survey from CESI Debt Solutions revealed that 80 percent of spouses spend money unbeknownst to their other halves. Granted, I’m not going to tell my husband every time I buy a bottle of Poland Spring, just as I don’t expect him to go over his receipts for lunches purchased at his full-time office job. But when I was using our mutual credit card to do a pre-Thanksgiving run at Target, every item was analyzed and discussed before that final swipe.
Ultimately, your relationships will fare better with full disclosure. The right mate will not judge you for having an honest discussion about living expenses, and knowing your partner’s personality includes knowing how they handle money. For me, that means knowing that my husband will always pretend that certain amounts of money don’t exist—meaning that he will have money left over for necessities, budgeted for before the unexpected expenses set in. It’s less of a lie and more of a mind trick—and that we’re both in on the method means that we’re always on the same page.
If you’re a devotee of 30 Rock, you’ll remember a recent episode in which Liz Lemon and her boyfriend Criss go to IKEA on Valentine’s Day. Liz is determined to get one thing—a dining table—and becomes a taskmaster in pursuit of the one piece of cheese in the middle of the maze that is IKEA. Criss gets sidetracked in the IKEA Marketplace, picking out salt and pepper shakers and the like. Cue the inevitable fight and storming-off while a store employee looks on in sadistic glee.
No couple is perfect, and fights are inevitable. No matter how simpatico you are, you’re still two different people who will occasionally have differing opinions about what money should be spent where. And usually those opinions differ in the IKEA Marketplace over a package of $0.99 picture frames or $10 cookie tins. Carl Richards, a certified financial planner in Park City, Utah, who also contributes to the New York Times, once sketched two Venn diagrams, one interlinked and one with the two spheres separated. These spheres represent “His” and “Her” views on money and how gradually over the course of a relationship or marriage, these views tend to become more independent.
“No matter how much we avoid this discussion before marriage, the time will obviously come when reality will hit, and we will have to deal with the role that money plays in our lives and our relationships,” he writes in the accompanying article. Maybe those views don’t change so much over the years, but how much we articulate them does. Conflict is therefore natural and inevitable.
Such disagreements are totally OK—as long as you know how to rein them in. Are you really disagreeing over whether you should spend an extra couple of bucks on the impulse buy of a new toilet brush? Or are you projecting other frustrations from separate circumstances onto an innocuous piece of plastic and bristle?
In a post on Mint.com’s blog, aptly titled “How to Fight about Money with Your Spouse,” Mint hits the nail on the head by saying the most effective way to navigate a financial disagreement (or any tiff, really) is being able to listen and articulate. Money Crashers Personal Finance co-owner Andrew Schrage suggests that if you “listen to what your partner is saying and reiterate it to make sure you understand,” the risk of the fight escalating decreases. Moreover, being aware of what you want financially beyond generic platitudes—saving more, spending less—means you can present a more cogent argument for or against any purchase. Telling your partner you want to put aside $200 a month to pay off your student loans early can more easily put a few impulse buys into perspective.
Go to Your Separate Corners
In last February’s $50 Week column, I looked at the yours, mine, and ours theories of combining finances once you’re married—is it better to stay totally separate, maintain a joint account while keeping personal accounts on the side, or be totally merged? The funny thing is, I still choke on saying “our money,” even though my husband doesn’t think twice about such a concept. The pendulum swings rather frequently and steadily when you’re young and coupled, especially as you’re finding your professional footing and doubly so if you’re a freelancer. I’ve had periods in which I’ve been the breadwinner of the house, and there are times (such as now) when my husband is the one doing especially well.
Sure, I don’t mind when he takes the lead on buying groceries for a week or foots a cab fare or quick dinner before a concert. But to revisit my pre-Thanksgiving errand run (done while my husband was on the other side of the country visiting family in Los Angeles), I couldn’t help but feel a pang of guilt as I spent what was essentially his money without him helping to man the shopping cart. The distance was what tripped me up, coupled with the knowledge that I realistically would not have been able to afford the extra chairs, roasting pan, and carving set on my own.
To gain a little more insight into this, I wondered aloud to my therapist about why I had such a hard time spending other people’s money. I realized quickly that it’s because my issue with calling his money “our” money is that, on the flip side, I would never call my debt “our” debt. Which, if we want to get analytical, comes from seeing my mother saddled with the bills for a failed car wash venture her ex-husband decided to start, partly in her name to take advantage of her solid credit and income. As my therapist pointed out, it all goes back to honesty and openness in a relationship, the ability to disclose our financial histories and the willingness to reach a mutual understanding even when our ideas of what’s frugal, necessary, and expensive differ.
Likewise, knowing what to share and what to maintain on your own is a key asset in a healthy financial relationship. I would have never asked my husband to help me mitigate my student loan payments any more than I would have asked him to help me pay off the Best Buy credit card I opened up to pay for my new laptop. However, I have less of an issue with asking him to pay our Internet bill for the month if I find myself coming up short.
However those decisions to navigate your own larger financial burdens on your own, laced as they are with integrity, can also impact the decisions you make as a couple. A six-figure debt for your master’s degree may leave you shying away from wanting kids right away. On the less sunny side of the street, if you were to divorce, the partner subsidizing the other in terms of things like cable bills, groceries, or the occasional IKEA trip could be entitled to some form of reimbursement. A post-graduate degree earned within a marriage can also be used as leverage between lawyers.
Come to an agreement as to what’s yours and what’s shared early on in starting a life together. If you’re serious enough to move in together or get engaged, you should be serious enough to form a legal contract as to how the balance of financial power will be distributed, especially when it comes to the monetary baggage you bring into a relationship. And pay attention to how that balance shifts over time. You will each have ups and downs, both as individuals and a couple. Keeping solid records, the lines of communication open, and your priorities straight will help ensure that such transitions are harmonious.