Money woes are the leading cause of divorce in American couples. Over ⅓ of people in the United States have stated that financial pressure was the biggest challenge their marriage has faced in the past, and ¼ of Americans have said most of their arguments are money-related. As a financial planner, I work with a lot of couples – and I’m always surprised by how few of them have actually had an honest conversation about their money.
The old saying holds true when it comes to household finances – communication is key. When you work toward creating a financial plan with your spouse, you need to talk to each other about expectations, frustrations, and any goals or dreams you may have. That being said, money conversations can also be incredibly uncomfortable – which is probably why so many American couples avoid them altogether. Knowing what you’re walking into, and how to best talk about money with your spouse ahead of time, can help you have a productive conversation.
Everyone likes to point fingers when it comes to money because it’s frustrating to admit our own faults. We may be harboring some guilt around unhealthy spending habits, or be embarrassed because we don’t know as much as we think we should about saving for retirement. On the other hand, our money mindset may be a direct result of how we were raised – and it may be different from how our spouse approaches their finances.
Understanding where you fall down when it comes to your personal finances is key in order to talk to your spouse about building a financial plan that’s going to work for your family. When you know your own flaws, you’re able to create a plan of action that helps you to stay on track – which is something your spouse will appreciate. It’s also important to understand your spouse’s money mindset, as well as their financial strengths and weaknesses. Having a clear understanding of how each of you approach financial decisions, or value your money will help you to align your vision for the future (and avoid arguments down the road).
Personal finance is always emotionally charged. Everyone has opinions on how money should be handled, and often they differ dramatically – even between an otherwise compatible couple. Money conversations between two spouses who have different opinions about money can evolve into arguments quickly. The key is to approach all financial opinions your spouse may hold without judgement.
On the surface, this sounds easy – it’s not. For example, if you firmly believe in paying down debt and living a debt free lifestyle, but your spouse sees the benefit in carrying some debt and would prefer to prioritize saving before debt repayment – you may find yourself falling into the trap of judging them for their opinion because you strongly believe that yours is “right.” The truth is, when it comes to money, there are no “right” opinions. Opinions are just that – opinions. They’re based on a value set and history that someone has with their personal finances. They aren’t fact, and they aren’t “wrong.” Knowing that your spouse’s financial opinions aren’t right or wrong (and neither are yours) can help you move through conversations without assigning emotional value to their ideas.
It’s also important to avoid judgement of each other’s financial past. For example, 1 in 8 divorces are directly caused by student loan debt. The pressure that hefty debt, a lack of savings, or other financial missteps you bring to the table can potentially alienate your spouse. Working together to be on the same “team” when it comes to addressing these money woes is key.
As you’re discussing your family’s finances, you’re going to come to a point where you need to set goals that you’re working toward. It’s tempting to set individual goals and work independently toward them, but that’s a recipe for financial dissonance in your household. Talking through your money goals, and working to align them with the values you share as a couple, can help you lay a foundation of financial peace in your home.
When you set financial goals together as a married couple, you’re actively working to approach your money situation as a team. You’re building a safety net that protects both of you, planning for the lifestyle you want as a unit, and staying honest with one another. Once you’ve set goals as a team, you can move forward with creating a game plan that puts you on the path to reach those goals. This might mean creating a household budget, setting up automatic payments to knock out your debt or build up your savings, or building in “rewards” like a date night once you hit smaller milestones on your way to your long-term goals.
If you’re struggling to find common ground when it comes to your money, talking to a fiduciary, fee-only financial advisor can help. An impartial third party can often guide you in taking the emotion, or blame, out of your personal finances and help get you and your spouse on the same team when it comes to your money.