It's Time for "The Talk": Budgeting and Marriage
Big Benjamin Sometimes Feels like Big Brother
Are you a newlywed? If so: congratulations! If you have been married and no longer consider yourself a newlywed, congratulations as well on making it this far! As a newlywed myself, one of the fastest confrontations I have had with my wife is the conversation about money. We both consider ourselves successful savers, but we have differing philosophies on how we save. To her, it might seem like I am trying to control how she spends the money that she earns; to me, it might seem like she is unwilling to partake in the merging of our two separate financial assets. The reality is that both cases are untrue, but the difficulty lies in overcoming these preconceptions. As a result, we have both become slaves to the great green monster and its presence seems to loom at the edge of every conflict! Perhaps you find yourself in a similar situation and are unsure of how to navigate the tumultuous fiscal terrain in front of you. Luckily for you, I have already done so and intend to share my experience with you regarding this subject.
Let us first lay out some groundwork and steps to facilitating this conversation:
- Money is so personal for some people that it borders on intimacy. You should respect the feelings of your partner as such.
- When seeking outside advice, seek out a mutually agreed upon and trusted source. Establishing a mutual foundation will only help spur this conversation forward in a positive manner.
- Establish your financial goals and detail what your plans are/were to reach them. Prioritize them in order to allow for space where your partner's may coincide.
- When explaining your goals, determine the motivation for why you have those particular goals. This will help prioritize them as well as show your partner where your loyalties lie.
- Be patient and open-minded.
Keep these at the forefront of your mind as you continue reading and especially while you begin your co-opted financial journey.
One of the first things you need to establish for yourself is this: why exactly do you want money? My wife and I spoke to a friend of ours who is a licensed MFT, and he explained to us, "One of the most important financial responsibilites new couples have is to talk to each other about their monetary goals." Do you want to save up for a special car? Maybe you want to buy your dream home? Perhaps you are thinking about your unborn child's college fund? Whatever your motivation stems from, you need to pinpoint it. If the answer is several different things, write them down and keep them concrete.
The second thing you need to consider is this: Who is, or will be, the primary benefactor of these goals in your relationship, and who is the primary beneficiary? This is possibly more important than the previous question because it aims at your true intentions. If you have yourself as the primary beneficiary of all (or most) of your financial goals, you need to reconsider your goals. When you enter a marriage you need to retrain your mind to think of your partner as an extension of yourself. I am not saying don't treat yourself to nice things occasionally; instead, what I am saying is that your long-term financial goals need to also be aimed at the success of your partner. This is often what causes the first bump in the road when the conversation about money is first broached. We enter into a marriage with the same financial goals and habits that we had before marriage, and while some of those goals might retain the same importance in the marriage, we need to make sure that their importance is aimed at benefitting both individuals. The conversation becomes much easier when you and your partner can come to an understanding or create a unified goal with the same foundation of trust and support.
Making a Plan
Now that you have the hardest part done, prepare yourself for what is likely going to require the most patience. Both you and your partner are going to have to sit down and make a budget, or at the very least, a plan on how you spend your money. Don't think this is important? That's fine, you don't have to take my word for it; instead, take it from Dave Ramsey, the most popular family oriented financial consultant:
I am not here to tell you how to spend your money or how to save it. What I am going to tell you though, is that this stage is where you will confront which of you is "the spender."
Luckily, there is a way of changing your outlook on this, regardless of whether or not you are the spender or the saver. This is easier if one of you is familiar with accounting.
We first have to change what is commonly viewed as the conventional understanding of "spending". When you look at your budgeting spreadsheet or plan, stop looking at the money you save as money you have saved. Instead, look at it as money you have spent. I know, this seems counterintuitive, but it's actually more accurate than not. We can view every instance of saving money or spending money as a transaction, just like we have at a store or online. For you accountants out there, this is your balance sheet. When you deposit money into savings, you have just charged Corporation-You and paid Corporation-Marriage. Conversely, when you spend money for a product you are also charging Corporation-You, but the money ends somewhere else. The important thing to keep track of in your budget is how much money is being charged from Corporation-You, and how much of it goes to other places--Corporation-Marriage included.
The important thing to establish between you and your partner is how much you want going toward Corporation-Marriage from each of you individually. This isn't easy and this is where you have to understand each of you is willing to put differing percentages forward. Keep in mind that you might not make equal amounts of money, and what you are willing to put forward might be less than your partner, but perhaps what they put forward is a larger percentage of their overall earnings. Don't let greed cloud your judgement or mask the love you have for your partner.
Aim at Growth
In an age where money seems to lie at the heart of everything and divorce rates seem to climb higher and higher, try not to let this particular topic be the one that creates the rift between you and your loved one. While you should both look toward monetary growth, even that should come second to the growth you seek in your relationship. In the most hyperbolic sense, if the world's economic infrastructure were to collapse, all you would have left is your loved ones. As such, you should seek to make that your foundation first and foremost. While I am no expert, I do consider this situation to be one I have succeeded in, and I hope that my experience helps you as well.