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How you manage money is an important topic in any relationship. In fact, studies show that finances are one of the leading causes of divorces. Money can be a source of extreme conflict and stress, leading to a lot of unhappiness in marriage.
It can manifest itself in a variety of ways, whether that be arguments about each other’s spending habits or the panic that comes with not having enough money leftover at the end of the month to pay the bills.
Realizing how much stress and conflict that money can bring was what sparked my interest in learning about personal finance. We’ve both learned a lot in our 4.5 years of marriage, including how to best manage our finances as a couple.
We started with a combined $40,000 of student loans (eventually adding a $15,000 car loan too), low paying jobs, and a budget of “spend as little as possible with some occasional splurges.” This was hardly a recipe for success.
It took time, but after going through Dave Ramsey’s Financial Peace, sitting down and making a budget together, and communicating regularly about our finances, we were able to crush our $55,000 of debt and build our net worth.
Paying Bills & Making the Budget
All of our accounts are fully joint, and I handle all of the financial responsibilities of the household, including paying the bills, tracking expenses, and making the budget with Mint each month, but I communicate with my wife about everything. We talk about upcoming expenses we need to budget for and make sure we’re both on the same page regarding how much we’re able to spend each month. It took us 3-4 months to figure out a budget that worked for us. Now it takes 5 minutes per month since our expenses don’t change too much each month. It really comes down to me being highly interested in finances and she isn’t. She much prefers that I take care of them and it avoids a lot of stress for her.
Even if one person handles a bulk of the finances, it’s extremely important for both people to be part of the decision making and always be aware of what’s going on with the money. My wife isn’t interested in the day-to-day management of the money, but she plays a huge role in the decisions we make together on our long-term goals. Having these discussions about money, our goals, and dreams have helped make us even closer as a couple.
Opposites Attract
I’ve always been a longterm thinker and have always been a saver. My wife is more of a spender, but not in an extravagant way at all. We complement each other well, being able to enjoy the present while preparing ourselves for the future. She helps me be more practical and enjoy occasional splurges and I’ve helped her see different ways of solving problems while spending less. It also helps that we both prefer experiences over possessions.
A lot of our attitudes about money have been shaped with how we’ve grown up and what we’ve learned from our families. We’re both very much on the same team with similar longterm goals. While we differ in certain areas, it actually brings us closer as we continue to learn more and more about where the other person is coming from.
Pursuing Financial Independence
After becoming debt free, our next big goal is pursuing financial independence, the point where our investments and passive income can fully cover our expenses. A big key in this is finding your level of enough. Being more of a long-term thinker, I’m more passionate about reaching financial independence, but she’s fully onboard this pursuit as well. Right now we’re working on balancing the importance of saving for the future and building up a solid cushion, while also still enjoying the present. I think this will be a balance that will always be important to pay attention to.
Track Your Expenses
Tracking our spending was huge for us in paying off our debt and establishing a monthly budget that works. This doesn’t mean stress about every time you have to fill up your gas tank, but you NEED to know how much money you’re bringing in each month and how much you’re spending in each area. This small principle can have a massive impact on your finances. You won’t be able to improve if you don’t know the benchmarks of where you’re starting from.
“Fun Money”
During our debt payoff journey we instituted some “fun money” into our monthly budget. This is money that we can each use however we want. Before making this switch we were focusing way too much on scrutinizing every single expense. This was a huge positive change and gave us a lot more freedom. It’s like building in a “cheat day” into a healthy diet, small rewards help you stay motivated.
Communicate and Align Your Goals
Fortunately, we barely ever have fights about money. For us, it’s all in our communication. We try to put ourselves in the other person’s shoes and see their point of view. We’re not perfect, but we’re getting better at that every day. Ultimately we are on the same team and both want what’s best for each other. Knowing that helps us take a step back and put things in better perspective.
We wouldn’t have reached debt freedom as quickly as we did without the support and encouragement from each other. You can’t succeed alone, and you can’t succeed if both of you are pulling the other in opposite directions. You’re on the same team and will only see progress if you work together. Keep each other in the loop on everything. Discuss expenses and talk about your longterm goals. Each person needs to feel heard and needs to be involved in the entire process. We also collaborate and what we value most so that we can align our spending towards those areas. For example, we both enjoy getting to take trips together, so we put some money aside every month into a “Vacation Fund.”
Talk About Money While Dating
It’s important to start talking about money early on in a relationship, to find out whether you’re compatible in that area. When is the right time? That will vary for each couple, but it needs to happen. As soon as you start envisioning a future with that person, it’s important to start laying the groundwork to discuss money habits. Money is a taboo subject, but it can bring you much closer to the other person and can be very freeing to open up. You don’t need to be perfectly compatible with money right away, but it’s important to have similar view points and long-term goals that you can work towards together.
Final Thoughts
Managing your finances as a couple is always an ongoing process. It’s never going to be perfect, but you don’t have to be perfect to reach financial freedom. I feel very blessed to have such a supportive, motivated, and hard working spouse. It takes time to instill positive changes and see improvement, but don’t get discouraged. You’ll have months where you overspend, you’ll have some disagreements, but the key is to continually be learning and improving. Track your spending, align your goals, and you’ll be surprised at how healthy your finances can become.
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