How to Find Financial Accord

by Suba

Money is cited to be one of the leading cause for divorce. According to a study done by Prof. Jeffrey Dew at Utah State University, couples who reported disagreeing about finance once a week were over 30 percent more likely to get divorced than couples who reported disagreeing about finances a few times a month.

When we got married, money was a touchy subject. When we were not saving anything, both of us thought the other person was in the wrong. After having more than a few disagreements, we decided to take control of our money instead of the other way around.

Endless love

It took us a few years to completely stop arguing about money. This is what worked for us

Set common goals to work towards

Nothing worked better than setting up our financial goals. Initially we were saving whatever was left over at the end of the month. Most months that turned out to be nothing. When I blamed my husband for buying some hobby stuff that could have gone to savings, he couldn’t understand what the big deal was. If we didn’t save this month we will save the next right? And I would persuade him to eat out 3-4 times a week, then complain we didn’t have any money. Only after we set clear goals and automated our finances using targeted savings accounts for each goal, did we became aware of our entire financial picture. It was easy for us to decide between eating out now or a vacation to Hawaii in 3 months as opposed to the prior decision used to be eating out or some-random-extra-cash-at-the-end-of-the-month.  Clearly a much poorer incentive not to eat out :).

Develop a spending plan that works for both

After we set up goals, we set up a budget and failed miserably. It took us a few tries to come up with our current spending plan that allows some cushion for stuff we both love. I still buy my favorite frappucino but I know my limit. He can buy his hobby stuff as long as it is within his fun money allowance.

Establish limits

We also have a limit of $50 above which every purchase has to be talked over. If it is important and can wait, we start a new goal to fund the purchase. If it cannot wait, we know exactly where we are taking the money from and it gives us an extra layer of thinking-it-through time.

Have financial dates

Every month we go over our spending, net worth and discuss any important financial decisions we will be taking that month, like selling some stock or deciding where to go on our next vacation and how to save for it. Initially when we were still arguing about money, these were not fun, but now I look forward to these, because it has moved away from arguments to exciting discussions about our future.

Hold each other accountable, point out mistakes but don’t judge

My husband finds it a lot easier to shut off his spending. He doesn’t need much. So it was much much easier for him to control his spending than it was for me. He is also my best friend, so by talking about my frustrations we were able to come up with better alternatives that didn’t require me to be a cheap stake but stopped me from being a spendthrift.

Be honest with each other

I don’t think this needs any explanation.

If both partners are working towards the same goals, communicate and be honest with each other, everything else will become just a technicality.

What do you do to keep from fighting over your finances? How do you and your significant other work on your financial front?

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{ 14 comments… read them below or add one }

Michelle February 8, 2012 at 6:18 am

Establishing spending limits is very important. We talk about almost every purchase (besides food related).

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Suba February 9, 2012 at 8:37 am

Agreed Michelle. Each of us will have different comfort level, but whatever it is, it has be established and both partners should be aware of it.

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krantcents February 8, 2012 at 7:44 am

It all starts with communication and having an understanding or agreement. It helps if you agree on most things and have the same goals.

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Suba February 9, 2012 at 8:39 am

Very true, KC.

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Newlyweds on a Budget February 8, 2012 at 12:23 pm

We used to argue a lot about money. We still argue some but not as often as before. It’s really hard when there is no money left at the end of the month , but it helps knowing it won’t be this way forever.

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Suba February 9, 2012 at 8:38 am

We used to argue a lot. Rather I used to 🙂 my husband doesn’t really care about money so he rarely starts an argument about money.

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Money Infant February 8, 2012 at 4:26 pm

When we were first married we argued about money quite a bit. Eventually we came up with the idea of allowances for each of us and since that time the arguments have ceased. Oh and of course we discuss any large purchases over $100. Most importantly we talk to each other all the time.

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Suba February 9, 2012 at 8:41 am

We sort of do allowance, my husband gets certain amount each month below which I won’t question him on what he buys. Most of the time he ends up filling what he wants in a google doc and I order it. So we talk about almost every purchase but technically I shouldn’t be asking him questions about those 🙂

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Carol@inthetrenches February 8, 2012 at 4:45 pm

Our money perspective and how we use it is a reflection of who we are and what we value. It is amazing how little it is discussed and overlooked or minimized before marriage as we try to be agreeable. The marriage then brings any differences to the forefront quickly. Some couples find themselves as polar opposites after the wedding by assuming the other shares their value system. Your ideas for working them out are all very constructive and useful.

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Suba February 9, 2012 at 8:41 am

We didn’t even think about money before marriage. In the hindsight it could have been a disaster. Luckily we worked it out.

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SB @ One Cent At A Time February 8, 2012 at 5:50 pm

Very honest job here Suba. I need to learn. She’s not much interested in money related matters. But I have to try consistently

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Suba February 9, 2012 at 8:42 am

My husband doesn’t care much but he knows it is important to me, so he listens and that works well for us.

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Thomas - Ways to Invest Money February 9, 2012 at 8:15 am

Very very good post. I actually emailed this post to my wife. We are still finding out comfort zones. I am more a saver and it is easier for me to limit my spending. For her not so much and it has caused a strain on the marriage before. Now we talk things out and try to find common goals to work towards.

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Suba February 9, 2012 at 8:43 am

Goals and communication can fix pretty much all the financial problems!

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