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My husband and I celebrated our tenth wedding anniversary last year. It has been a wonderful ride, and I couldn’t have picked a better partner. We’ve gone from being broke students, to making money, to being in incredible debt. Every choice people make shapes the person they will eventually become, so I try not to regret bad decisions, but view them as learning experiences. Ideally my advice would apply to couples who are just getting started, but it’s never too late to make changes if you aren’t in the financial position you wish to be. Hopefully by sharing some of the things I’ve learned, it might lead you to a better financial relationship with your spouse.
To make a relationship work, you have to combine finances at some point, generally when you get married or decide to be committed to one another for life. Otherwise, one person could end up spending or saving all the money while the other one has no idea what’s going on. That being said, I don’t necessarily feel a joint account is required. My husband had a relationship before me that did not end well. They had several joint accounts, which ended up in collections, effectively ruining his credit score for years. He is very reluctant to have every bank account in both names, even though we have been married for so long. I have to understand where he is coming from, so he keeps a separate account. We have a monthly meeting to look at all of the finances together. If you both have access to see what each account holds, I think it’s fine to have some separate ones. If one of you has a secret account, that’s a huge red flag.
Have a Conversation About Long Term Goals
If you are young and make little money, it might seem silly to think about what you want to do when you retire. However, if you don’t have some sort of plan, you are very likely to fall into the trap of lifestyle inflation. As you make more money over time, you spend the extra on more expensive housing, cars, electronics, just about everything. By deciding what your long term goals are, you have a plan in motion to save or invest your income so you can achieve those dreams. I would recommend having goals in place for one year, five years, ten years and beyond. If you want to work into your sixties and have nicer things now, that’s alright. If you want to live very simply with the hope of retiring early, that’s alright too. The point is to have a goal or else you won’t ever know if you’ve achieved anything!
What If Our Goals Aren’t The Same?
If you want to drive a Mercedes and buy designer clothes while your partner wants to make slow cooker meals and shop at thrift stores, you might be in trouble. Just like two alpha dogs will never get along without regular clashes, your different attitudes and desires will derail you. People don’t have to be just alike to make a relationship work. It is often nice to have some counter balance if you have a strong trait in one direction, but some things should be deal breakers. Money expectations and management are big ones. Don’t expect someone to change because you want them to.
What if I’m Married, In Debt, and Have No Plan?
Wow, you sound like me two years ago! My husband and I had over $30,000 in credit card debt, and we had no plan other than to keep working to afford our lifestyle and all the debt payments. We had a wake up call when my in-laws went through a foreclosure. The reality was that we were one job loss or illness away from serious financial consequences.
It was incredibly hard, and the biggest argument we’ve ever had, but we faced the reality that we had made bad decisions and were in terrible debt. We formed a plan to recover and change our ways. I’d love to say it was easy. It wasn’t. We are lucky that we had the potential to bring in some pretty significant extra income and cut spending by a huge percentage. We were able to pay off all that debt in 17 months, and we’ve completely changed the way we spend money. If a purchase isn’t a basic necessity and/or doesn’t reflect our values, we don’t buy it. We have goals. Life is so much better. It may take some serious soul searching and lifestyle changes to get on the correct path, but if you both want to be free more than you want to be in debt, it can happen.
Getting married is one of the biggest decisions a person can make. We plan for a wedding, a honeymoon, and what we will wear for the rehearsal dinner. Make it a point to plan for your financial future as a married couple. While it’s never too late, starting early and having goals can make for a positive life together.
Kim is an optometrist and newly reformed spending addict who blogs about her journey toward achieving 20/20 financial vision at Eyes on the Dollar.
Glen’s Thoughts: Kim makes some excellent points in this post and I can only echo what she has said. Getting married is a big deal and you are going to have a far easier time of it if you are both working towards the same goals. Marriage can be difficult at times, but overall it is a wonderful experience – just be sure that you and your partner are compatible both interpersonally and financially.