I have now been married for over four years. It’s been a roller coaster ride for sure, with more ups than tumbles, I am glad to report. The great part is that unlike a lot of couples money has not been much of a source of conflict so far. So far, marriage and money seem to be on the right path!
However, it looks like we are in a minority as money has been quoted as the second most common reason for divorce, just behind infidelity. Money can either be used as an instrument to make the other spouse happy or it can become a bone of contention. In my experience, there are some big dos and don’ts which are fundamental to keeping money talks a happy experience.
1. Know your spouse’s financial situation before tying the knot
Before you get married, it is important to know your spouse’s financial history – do they have debt? Do they have savings? In the US, some people now have the credit score as a claimed deciding factor in their choice of mate. To be fair, I was surprised when a friend in the office told me her now husband and at that point, an arranged marriage prospect (another banker) actually checked out her credit rating before marrying her. It’s better to ask such tough questions than wake up to a nasty surprise someday.
2. Understand the different money mindsets and spending habits at play
Most of us have different mindsets and spending habits and it can be irksome, especially if it is left unresolved. Differences can crop up in a marriage of savers and spenders. Check out this wonderful starter from Psychology Today to help you navigate this maze so that the two of you come with a much better understanding of each other and a common way forward. In the initial years, I and my husband were both spenders. However, when he made the move to entrepreneurship and our debt piled on a bit, it automatically halted any unnecessary spending we might have otherwise made.
3. Decide on how to manage money
Managing money is like the fuel or the lubricant in the financial aspect of marriage. It is the day to day flow of money that can often be wielded by one spouse as a power trick. In my mind, there are 3 clear ways in which you can manage money. My husband and I continue to equally split the household expenses which we mostly put on our joint credit card while retaining control and management of the rest of our money.
4. Keep no money secrets
Being a marketer for a bank, we often meet consumers to understand them and money. One of the things that has often come up is how many women had separate bank accounts where they stashed money, which the husband was not aware of. I am not being sexist here, but the phenomenon was more common amongst women. Marriage is a bond of trust. Any infidelity, even in the financial sphere, could dent it completely making it difficult to be repaired again.
5. Talk about money
While some experts suggest an institutionalized money date to talk about money at a pre-decided frequency, say every week or something on those lines, keeping it casual also works. For instance, my husband and I end up mentioning any extra money or any shopping that we might have done. We are open to opinions or suggestions from the other person. Since I personally do not follow a household budget, I am not calling it out as a separate point but it is a vital aspect which works very well for a lot of couples as a basis for money talk and to align money as a couple.
6. Have common financial goals
Most financial goals are those which require a huge quantum of resources built over time. For couples, most goals require both members to contribute and save for it. However, unless the financial goals are talked through and decided commonly, how can you go about it in a well-planned manner? How do you plan and invest for your goals if there is no consensus or talk about what they are?
7. Maintain some financial individuality
This point holds true more for couples who pool in all their resources in one account. I believe some discretionary spending, even at smaller sums, should be a possibility for anyone. Everyone has different money values and an outlet or a vent for those not in sync with your partner is absolutely essential. However, even if you or your partner does maintain a small discretionary account, that should be common knowledge between the partners. Remember, no financial secret.
8. Keep financial details with your partner
It is important to organize all your financial details and have a household binder of sorts which is kept at a location that either partner can access at will. To me, this is a major reflection of the trust shared by the couple. If you are uneasy about sharing your bank account details with your spouse, then some serious questions need to be addressed. Also, this move ensures that you make the path easier for your partner in case of any emergency.
9. Ensure your partner/spouse is the nominee for all major financial products
This is a biggie as per me. Just before getting married, we had been given the advice about how the couple needs to work as one unit, including financially but separate accounts do not hamper that. In the same session, I heard of a case where the husband still even after year’s of marriage had his mother’s name as nominee in most of his financial products like insurance and bank account etc. Once his mother died he was obviously grieving. However, the man also died soon leaving his wife in a major financial conundrum as it was still his dead husbands’ dead mother’s name on all financial products. Don’t make that mistake. Check nominee details on all your products and ensure it is your spouse.
Marriage is a relationship that is always in a work in progress stage. Money can be a double edge sword in this case, either making it stronger or derail it completely. Follow the steps above, and chances of money strengthening the relationship will be far higher.
How do you handle money in your marriage? Are there any tips that I might have missed out on? Let me know in the comments below.