Money in marriage is huge topic to cover. This takes a lot of time and a lot of trial and error to work through. This blog post definitely won’t solve every issue, but hopefully it will give you some pointers to help you get on a good trajectory.
Why Every Marriage Needs A Budget!
Marriage is hard - there is no doubt about it. There is no secret formula to make your marriage easy or perfect. It takes hard work, dedication, and perseverance. When two human beings are attempting to align their lives together, there will be bumps in the road. There are many stressors in life that only add to these challenges. Historically, money has by far been one of the top stressors in a marriage. In fact, studies have shown that it is the number two leading cause of divorce behind infidelity. Here at Metanoia, our mission is to change the way people see and think about money. This includes giving our members the knowledge and tools needed to take full control of their finances. With this, we hope to take out all the stress money places into our lives. With marriage, however, there are a few additional steps needed. Communication is a key necessity in every marriage, and that goes for a couple’s finances as well. Money in marriage needs to have three main focuses in addition to mastering your personal finance: identifying spending habits, finding common ground in your level of desired lifestyle, and establishing long-term financial goals together.
Your spending habits will be the first thing you will notice when it comes to money in marriage. In fact, it is almost comical at times. In my experience, there is typically one spender and one saver. I have seen it go both ways in terms of which spouse it is. If you are both savers, you will have a much easier time. If you are both spenders, you will get along great, but your finances will be a mess and cause issues on the back end. However, a spender and saver will have their trials early on as one spouse will be trying to hold on to money while the other will be trying to get rid of it. In my opinion, dealing with these issues upfront is much better than letting them simmer and build up for later. Don’t feel that this is just an area you need to learn to “tolerate” about your spouse. Address it, talk it through, and come to a common ground. The BEST way to solve this issue is by building a budget and letting the numbers talk. If you only have $500 left over at the end of the month, obviously you cannot go out and spend $700. Most people will agree with this - I hope. Part of this conversation is going to be what level of lifestyle you both want to live.
Defining your level of lifestyle in a marriage is critical. You and your spouse need to be on the same page. There are two factors that play into this level: your desired level and your capable level. Many people would love to live on the beach, or cruise on their yacht, or fly around in their private jet; however, a lack of money hinders this desired lifestyle for most. Chat about what kind of lifestyle you two want together. Do you have kids? Think about the lifestyle you would want to raise them in. Do you want to own your home? Do you want to do family vacations often? Do you want to have brand new cars? Now, bring the conversation back to your budget that you created when you were discussing spending habits. What do the numbers say? Which aspects of your desired lifestyle can you afford? Which aspects need to be held off for a later time? Come to a middle ground between each of your desired lifestyles and what your budget is telling you. However, one final topic needs to be addressed: long-term financial goals.
The Metanoia Trajectory is a financial trajectory that ensures reaching your financial goals by a given future time while still being able to make the most of your present life. This trajectory can only be established by knowing where you want to be and in what timeframe. This is the final topic you and your spouse need to communicate about. Is your financial goal retirement? When do you want to retire? What kind of lifestyle do you want to live during retirement? What kind of money will that require? What do you have to do and for how long in order to reach that? Whatever your financial goals may be, discuss it with your spouse. See where you differ. See where you agree. Come to common ground. Once these goals are established, adjust your budget to meet these goals by the time you desire it. For example, if you need to invest $500 a month from now until your desired retirement time, build that $500 into your budget. Now, what is left over? From there, revert back to what kind of current lifestyle you and your spouse have agreed upon. You two should already be on the same page with this by this point. Now, what does your budget tell you that you can do? Of course, if there is not enough money to go around, begin brainstorming how to increase your cash flow to make room for your financial goals and desired current lifestyle.
All in all, communicate with your spouse about your finances. Do not sweep it under the rug. Have the tough conversations. Start with these three topics. Identify your spending habits. Be honest. Be kind. Express to each other how you feel about these habits. Next, find a common ground on your level of desired lifestyle. If you are having trouble agreeing, build a budget and let the numbers guide your decisions. Lastly, establish your long-term financial goals together. Agree on where you two are going financially as a couple. Use your budget to see how long it will take you to reach these goals. Build a plan, and stick to it. Once that trajectory is established, talk about how to use what’s left over to create a current level of lifestyle that you are both happy with.
We are by no means marriage counselors. If your marriage is being heavily affected by this topic, I encourage you to seek professional marital counseling. However, we are personal finance experts! If you and your spouse are ready to tackle this number two leading cause of divorce together, let us help you take full control of your money! Don’t put it off any longer! We are here to help you eliminate the stresses that finances can put on our marriages and on our lives as a whole when we are not in full control of our money. Please feel free to email us at [email protected] with any questions.
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