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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.
Combine Finances
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.
These are all good tips! We got on the same page about money before we got married and have never regretted it.
Holly@ClubThrifty recently posted..Juicing Vegetables: My Unfrugal Obsession
If only we could have been so smart. I think because we were so broke when we met, we never considered that we wouldn’t always be that way, even though we were working toward getting better jobs.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Thanks for sharing these tips. Congratulations on your marriage. It will certainly bring new challenges.
Brett @ wstreetstocks recently posted..SSRX: A Promising Biotech Stock
What fun is it if you never have challenges?
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Thanks for the great tips, even though I am not close to marriage, things to keep in mind haha!
Edgar @ Degrees and Debt recently posted..Groupon: Need it? No. Buying it? Yes.
It’ s never too late to start planning!
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Great post Kim. My wife and I got on the same page before we got married and it has made finances much easier. Our personalities, though COMPLETELY opposite tend to complement each other quite well so it makes life overall a bit easier.
John S @ Frugal Rules recently posted..Taking the Plunge: Budgeting and the Entrepreneur
I think it’s good to be different if you both have the same end goal in mind.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Really its a very good informative blog.Really marriage is a most important decisions for the everybody. I really get a important point from it.
We think of it as being on a team. Teams work toward a goal (winning!), and can only get there by sharing that goal and communicating effectively. =)
Mrs. Pop @ Planting Our Pennies recently posted..He Said She Said: A Team of Professionals
Very good perspective. The whole mine is mine and yours is yours just doesn’t work over the long haul.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Great points Kim! I have been married for a little over a year now and I’m glad that we were transparent about long-term goals as well as our current debt situation (student loans!). Having the same goals/focus has made it much easier to deal with financial difficulties.
DC @ Young Adult Money recently posted..Why Twitter Follower Count is Pointless
It certainly saves lots of hurdles down the road if you can figure that out from the beginning.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Great post! It’s so important to be in sync with your spouse or significant other when it comes to finances. Planning and open communication are key points to keep in mind if you want your financial footing to be a solid one together.
The Happy Homeowner recently posted..Personal Finance and Lance Armstrong: What You Can Learn from Lance’s Fall from Grace
Even if we didn’t talk about money at first, we both have the same goals and values. That can get lost if you aren’t open from the beginning. I hope someone can learn from my example.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
I love hearing how couples handle their finances, Kim, what a great topic.
We view our combined family finances as a business and run it as such. And we each have a separate checking account but the bulk of our money is combined in a joint account. There is a ton of transparency and all savings goals are openly discussed (even the really ridiculous ones!) There isn’t much to hide from each other as we both are fairly reasonable and respectful so we don’t tend to get defensive or feel a need to justify purchases, etc. As long as our ‘business’ generally is running smoothly and we are hitting our savings goals, there are very few problems, although we lean toward opposite ends of the financial spectrum. (He is a spender, I am a saver!)
Jennifer Lynn @ Broke-Ass Mommy recently posted..Time to establish financial and savings goals for 2013.
It is amazing how much less you spend when you know you will have to account for it, especially if it is for a stupid purchase.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Great tips! my BF is a bit of a ying to my yang but at least we are very open about money and it makes everything easier. We have separate finances but no secrets, and only one house as a common financial goal. Not being on the same page about money would be a deal breaker.
Pauline recently posted..13 money resolutions for 2013: #12 make a plan!
It is much easier to be there from the start. I don’ t think my husband and I had different ideas, we just didn’t have a plan.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Fantastic thoughts, Kim. While I had some clients who kept separate finances and had perfectly fine marriages, that doesn’t work for most people. In fact, those people who kept separate checkbooks but had great marriages still had combined goals, talked about their money openly, and had nothing to hide from the other person.
AverageJoe recently posted..College Planning Strategy: A Creative (and Effective) Option
We fire up our two laptops and look at every purchase that comes out of each account. I think it would be easier to just combine everything, but I get his side as well. As long as there are no secrets, I’m Ok with it.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
excellent points. i recently got married less than two years ago and we combined finances. but we also created individual accounts for our leisure spending, kind of our own allowance money. that way we can spend money on the things we want without burdening our monthly budget.
charles recently posted..Save 8.5% On Gas All The Time With TopCashBack
I think having “fun money” is important. That way you don’t feel bad or question if it’ s OK to get a coffee or whatever.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Honestly, we did very little financial planning before we got married. We briefly discussed whether we should merge our checking account. By briefly, I mean Jeff asked and I said “sure.” We were so young! I think these are all excellent tips that I wish I would have read years ago.
Michelle recently posted..See Debt Run – 1 Year Birthday
I’m right there with you. I don’t think it was intentional, but we just were so broke it didn’t seem relevant. We should have planned for increased income and it possibly could have kept us out of debt. Hindsight is always 20/20 though.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Good things to keep in mind! Although we are not married, we finally opened up about our finances and I realized that he had been hiding a lot of debt from me. Fortunately, we were able to set up a plan and he was able to pay everything off in 1.5 years! We still don’t see eye to eye on everything though, as I keep on trying to find ways to reduce our monthly budget while he is busy planning on what his next car is going to be. He has comprised that it will be a used car instead of a new one. Still have some work to do!
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I think that’s OK as long as you talk about it. Hiding debt will cause so many problems. I’m glad you got it out in the open.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Great tips Kim.
Having been hitched for 12 years, I totally agree that having conversations and 100% open communication is the key to money and marriage. Whenever my wife and I have money issues or arguments it is ALWAYS because we aren’t sitting down regularly and talking about where we are financially. What we can afford. What we can’t, and what we need to budget for. Without doing that, we tend to be 2 trains heading in completely different directions.
Kyle @ Rather-Be-Shopping.com recently posted..Blogging Lesson: Learn From Your Mistakes
Yep and it always derails if you let it.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Great post! We combined our finances as soon as we moved in together and it has worked well for us even with the debt that we are working on getting rid of
Tackling Our Debt recently posted..Fun, Easy Ways to Teach Your Children About Money – Interview
It is so much easier to work together toward a common goal. The saver tends to get resentful toward the spender if there is no sort of agreement on what to do with money.
Kim@Eyesonthedollar recently posted..Benefits of a Crappy Job
Excellent tips!
I think that, given how serious a decision marriage is, having the finance discussion is absolutely a requirement.
Alex recently posted..Careers, money, and happiness: Running Towards Temptation
Great post, Kim! This is a class you could easily teach at churches in combination with their marriage classes. We were like you guys, floating along with no plan and ended up in huge debt. How I wish we would’ve followed these great tips from the beginning!
Laurie recently posted..Are We Headed for Another Great Depression?
These are all really great tips! Combining finances is harder than it seems (something I’m learning with my fiance) but it’s important to communicate and not to give up on working together. Luckily, my fiance and I are planning on figuring all this out before we get married so we can get on the same page sooner rather than later.
Shannon-ReadyForZero recently posted..Weekly Shout Outs: My Money Questions Edition
Great post Kim! I think a husband and wife are a team, and you just have to support each other – what ever it is that the two of you decide. Just like everything else in a marriage, you’ve got to make sure that you’re financially compatible or it will just lead to problems.
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