Finances In Marriage

Finances In Marriage - The Ultimate Guide To Marriage & Money

A lot of couples have conflict around finances in marriage for a variety of factors. They may have different values around money so they have a lot of disagreements. They may have different spending habits so they have arguments about saving too little or spending too much. They also may have conflicts around not feeling like a team with finances. The list goes on and on.

Steps To Fix Finances In Marriage

1. Understand Your Partner's Relationship With Money

The first step is understanding your partner's relationship with money. We all have a relationship with money. Some of us view money as power, some of us view money as anxiety, while others of us view money as freedom or security. The best thing to explore is your partner's upbringing with money. Sit down, if you haven't already, and ask them, “How did your family interact with money growing up? Was there abundance? Was there scarcity? Was it used as power and control over you? Was it used as a source of fun? Was there recklessness around spending habits and therefore stress?” Learning how your partner's family interacted with money will show you a lot about how they currently interact with it. 

For example, my mother was continually stressed about not having enough money when I was growing up. I remember her never having cash in her wallet and worrying there wouldn't be enough to pay the bills. That created a desire in me to be ambitious and have multiple streams of income one day for security. What about you? What's your relationship with money? What's your partner's relationship with money? Spend some time exploring their background because it will tell you a lot about how they approach money today. 

2. Respect Different Approaches To Money

Second, you have to respect different approaches to money. All of us are wired differently. Some of us are savers while others of us are spenders. There's validity in both because you need a spender and you need a saver. We often become judgmental toward our partner's approach to money and dismiss their values because it doesn't line up with ours. How much do you respect differences with how your partner wants to spend or save money? Or, how much do you judge and dismiss their financial preferences when they don't line up with yours? 

3. Develop An "Ours" Mindset

Third, you want to develop an “ours” mindset. How much do you have an “ours” mindset with money in your marriage? Most of us don't because it's a learned skill. Growing up and before you got married all money was yours. You didn't have to share it with anyone. It was your paycheck. It was your banking account. It was your savings. However, when you get married, the two become one, including your finances. So, it's a mindset shift from mine to ours. Have you made that shift?  A lot of people are married and they still haven't made that mindset shift from mine to ours. The way to approach money in marriage is that all money coming in, no matter who's making it, is our money. That mindset shift helps you view your partner as a teammate and will bring a sense of unity around finances. Thinking this is my money and that's your money will create division. To encourage an "ours" mindset I recommend couples having one joint checking account where all paychecks are deposited into it and all bills are paid out of it.

4. Learn To Share Power On Decisions

Fourth, you have to learn to share power. Sharing power is a major topic I talk about in my marriage book the Total Marriage Refresh. You have to learn how to share power in all areas of marriage, especially finances. This is where my tool Bounce the Ball comes into play. Bounce the Ball is when Partner A shares their opinion on the topic, the core value under their opinion, and then they bounce the ball by saying, “What do you think?” Partner B then does the same; they share their position on the topic and where that value comes from, then they bounce the ball back by saying, “What do you think?” Then, both partners must start adjusting their original position to honor their partner's position until they reach a compromise that works for both of them. If both partners have a malleable spirit and believe in an equal partnership, this tool works really well. My wife and I just went through this with how much money to spend on our children's birthdays. My wife was raised in a home where birthdays were filled with lavish presents, meals, and activities all day long. I was raised in a home where birthdays were celebrated but more modestly. So my wife and I were bringing different values to this topic from our past and we had to share power to find a compromise by bouncing the ball. The compromise was having birthdays that were more modest than she wanted and more lavish than I wanted. Making financial decisions without your partner's consent will lead to relationship problems quickly! 

5. Develop A Budget Together

Fifth, develop a budget together. A budget allows you to see where all your money is going. Some of the items in your budget are going to be fixed, such as your rent or mortgage, utility bill, phone bill, etc. However, some categories are going to be up for discussion. How much should we spend on groceries every week? How much should we use for spending money every week? How much should we spend on birthdays? How much should we spend on holiday gifts? All of these items should be in your budget and you need to share power on them to find compromises. A budget is a great way to not only gain control around your spending, but also to develop a sense of teamwork with your partner. Also, I recommend setting up two individual checking accounts to deposit your spending money into. For example, let's say you agree each partner receives $500/month to spend as they wish. That $500 would be deposited into your separate account to spend as you choose without needing to check with your partner first. This provides a sense of autonomy while also respecting the amount you both agreed to in your budget for spending money. 

6. Get Out Of Debt

Sixth, get out of debt. When you're in debt, it puts 1,000 pounds of pressure on your shoulders. The more financial stress you have, the more marital conflict you'll have. Debt is a primary source of financial stress so it needs to be eliminated. Unfortunately, our society makes it very easy to go into debt. Think about all the offers to buy now and pay later. It's all around us, so we start thinking, “Why not? I want that new, shiny thing." We make the purchase and before we know it, we have lots of payments. Now our entire paycheck is going toward payments and we're barely making ends meet. Credit cards are a primary cause of this. Think about how easy it is to get into credit card debt. People tend to spend more using a credit card compared to a debit card. You can't spend money on your debit card unless you have money in the bank so it holds you accountable.  Also, most people don't pay off their credit card at the end of the month and before long they are in debt. My wife and I are guilty of this. We had a credit card and we promised to pay it off each month but here and there we weren't able to. Before long, it got really high and we thankfully paid it off and vowed never to let it happen again. Guess what, a few years later it happened again! That was the last straw. We decided to chop up our credit card and we have been without credit cards for several years now. It’s been one of the best things we've ever done financially because it forced us to start rethinking how we use our money. It moved us from, “Let's just get it!” to “We can't get it unless we have the cash”. It forced us to get on the same page with our spending, to start saving, and to practice delayed gratification with our purchases. I highly recommend you do the same. Get rid of your credit cards and only pay for things with cash. Also, start paying off all your debt from smallest to largest. With each debt paid off you'll rest easier at night! 

7. Build An Emergency Fund

Seventh, build an emergency fund. How much money do you have saved for emergencies? Most people have none, which forces them into debt to pay for the emergency. Now they have the stress of the emergency plus the added stress of debt. Don't let that be you. It is recommended to have three to six months of living expenses in an emergency fund. You won't know what that amount is until you complete your budget. My wife and I just went through an emergency when our car broke down. I took the car in to the shop and they found a faulty part in the motor that's common for that model and year. It was an expensive repair and I was told that if I didn’t repair it, it could damage the entire motor eventually. So even though it was stressful and I didn't want to spend the money, we had an emergency fund to pay for it. So that stressful situation turned into an inconvenience, instead of a debilitating stressor. You want to feel the same. Get ready for emergencies because it's a matter of time before your next one happens.

8. Save For The Future.

Eighth, save for the future. We're a culture of spenders not savers. So many people are guilty of living paycheck to paycheck. Americans are known to be poor savers compared to other parts of the world like Europe and Japan. That's a problem we need to reverse. We're not saving for our children's college and we're not saving for our retirement. We're not saving because we don't have any extra income since we’re in debt. So, once you get your debt paid off and your emergency fund built, start saving for the future. I am guilty of this too because I'm a natural spender. However, through the years I've slowly been developing the self-discipline to save because I've learned how important it is. You need to prioritize saving so you're not a burden to your children one day and so you can enjoy your golden years.

9. Share In Managing The Money

Ninth, share in managing the money. Don't have one partner manage all the money because that creates a lot of stress and it creates division rather than unity. I recommend developing two routines around money. First, sit down once a week and balance your budget together. This includes reviewing everything that was spent to see if you were over or under budget for the week. This will show you what adjustments need to be made. This is also a great time to share in bill paying. Second, meet with a financial adviser together every 6 months to review your portfolio and see what adjustments you need to make with your investments and savings. This will help you and your partner start thinking of your future together, which will also develop a sense of teamwork in your marriage.

So there you have it, 9 steps to fix finances in marriage. First, understand your partner's relationship with money. Second, respect different approaches to money. Third, develop an "ours" mindset. Fourth, learn to share power on decisions. Fifth, develop a budget together. Sixth, get out of debt. Seventh, build an emergency fund. Eighth, save for the future. And ninth, share in managing the money! 

Further Reading:

Marriage Teamwork

Partnership in Marriage

Marriage and Dating

Covenant Marriage

In Laws

Dr. Wyatt Fisher

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