Arguments about money hamper many marriages. In fact, couples fight about money twice as much as they fight about sex, according to a Money Magazine survey. And the challenges can actually start even before you say "I do."
Mine, Yours, Ours
Sometimes, when each spouse works and they can't agree on financial issues, they decide to split the bills down the middle or allocate them out in some other fair and equitable manner. Once the bills are covered, each spouse can spend what they have left as they see fit. It sounds like a reasonable plan, but the process often builds resentment over the individual purchases made. It also divides the spending power, eliminating much of the financial value of marriage.
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From school loans to car loans, credit cards to gambling habits, most people come to the altar with financial baggage. If one partner has more debt than the other, or worse yet one partner is debt free, the sparks can start to fly when discussions about income, spending, and debt servicing come up.
Personality can play a big role in discussions about money. Even if both partners are debt free, the age-old conflict between spenders and savers can play out in multiple ways. It is important to know what your money personality is, as well as your partners, and discuss these differences openly.
Power play often occurs when he works and she doesn't, or he's unemployed and she's working, or one spouse earns more than the other, or one family has money and the other doesn't. When these situations are present, the money earner (or the one who makes the most money) often wants to dictate the spending priorities. Although there may be some rationale behind this idea, it is still important both partners co-operate as a team.
To have or not to have? That's usually the first question. Nowadays, it costs on average nearly $300,000 to raise a child for 18 years. This number may seem high but, it makes sense. Of course, once you have them, you have to care for them in many ways. Food, clothing, shelter, little league, ballet, designer jeans, prom gowns, pickup trucks, college are all part of a long list of child-related expenses. Not including the expenses related to children who have already left the nest either. That's assuming your kids will leave the nest. Some kids never leave the nest.
Her mom wants a vacation in Vegas. His parents need a new car. Her deadbeat brother can't make the rent. His sister's husband lost his job. Now one spouse is writing a cheque and the other wants to know why that money wasn't used to address needs right here at home or fund a vacation for "us."
This works the other way too. His mom will pay to fly him home for the holidays. Her mom will fund a new car since the one she's driving is a Honda, not a Lexus. Her mom buys the grandkids extravagant gifts and his mom can't afford to match that kind of spending. The joys of family often extend right into your wallet.
Communication is the key to most marital financial challenges. Dealing with debt is often the first issue on the agenda. Knowing what you are about to get yourself into can help you decide how to deal with it. If you just can't come to an agreement, but your heart won't let you walk away, a prenuptial agreement may be an option.
Personality is another aspect of your relationship that will play a major role in your financial plans and your marital bliss or lack thereof. Pay attention while you are dating, and be honest about your personality. Talking about your views and feelings can help put both partners at ease, or at least let them know what to expect.
The power play issue can get ugly quickly. Few things build resentment faster than being made to feel inferior. If you've got the cash, you need to be sensitive about how you present spending decisions. If you don't have the money, you need to be prepared for the stress and tension that are almost inevitable, even in good marriages. This subject comes up with increasing frequency when couples wait until later in life to marry.
One solution that has demonstrated success is for the higher-earning spouse to delegate all spending decisions to the lower-earning spouse. It takes a certain personality to be able to make the decision to give up power, but if you can do it, it may be a sound path to peace.
Challenges aside, getting married can have serious financial advantages. It is a great way to double your income without doubling your expenses. If you can synchronize your goals, you reach them much more quickly than you could by working alone.
If children are in your future, start teaching them about money when they are young. Preparing them for a financially responsible future reduces the odds of them dipping into your wallet once they grow up and knocking your savings plan off track. Use allowance and goals to teach your children about earning, saving and spending money.
Extended family can be a big challenge. Even if you are on the winning side of the argument, the loser can extract a penalty that outweighs the win. Living with a resentful, angry, frustrated spouse can be a miserable experience. Having a policy agreed upon in advance can help stave off the trouble. Of course, the best policy is "Never a borrower or a lender be."
The Bottom Line
Like many marriage problems, lack of communication is often the underlying issue. If you've already said "I do," you may want to create a pain-free postnuptial agreement. This marital contract can underline your love for each other - not undermine it.