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Not even 24 hours after my husband and I were married in April 2018, I had an ah-ha moment and realized that we made way too much money to have poor money management skills. We had just exchanged vows and promised to commit to each forever “for better or for worse” and “for richer or for poorer.”
The “for richer or for poorer” struck a chord with me because to take our honeymoon, where we sailed the Western Caribbean seas, we had to max out a credit card even though our combined income exceeded six figures.
Poor money management skills are the leading cause of divorce right after infidelity according to Marriage.com. To me, marriage is forever, and I didn’t want us to become a part of this statistic. I knew that to prevent this tragedy from happening to us, we had to act quickly and start to learn how to manage money as a couple now.
Not only has learning how to manage our joint finances improved us financially, but our marriage as a whole has been great. Arguments are at a minimum, we’ve learned to communicate well, and we’ve learned how to work together.
15 Ways to Effectively Manage Money with Your Spouse
Money causes so much stress, even more stress once you’re in a relationship, but that doesn’t have to be your story. Being open, honest, and upfront about money with your spouse is the only way you’ll be confident.
It’ll take some work from both of you, but it’s possible for the two of you to work together and develop a great system for your joint finances.
Every relationship is different, but here are 15 tips to help learn how to manage money with your spouse. They have helped us get on the right track towards properly managing in a positive, more productive way.
Start talking about money
It’s best if you start talking about money as soon as possible. You may not want to bring this up on your first date, but money management should be discussed before you say I do. There shouldn’t be any secrets.
Go over what accounts each of you have, how much debt you’re in, and exactly how you expect to manage money together moving forward. You both should be open and honest about the current state of your finances.
It’s important to understand that you may not share the same feelings about money and that’s okay. By laying it all out on the table will help you build a foundation and learn how to work together.
Talking about finances may be a bit awkward at first, but embrace it and make it fun by incorporating the initial conversation in something you love such as over ice cream or pizza.
Some questions you can ask to learn how to manage money with your spouse:
- What are your feelings about money?
- How was money handled in your house growing up?
- Do you have any financial role models?
- What areas/topics do you wish to learn more about?
- Do you have any short and long-term financial goals?
Create financial goals together
Now that you understand where you both stand financially, it’s important that you create financial goals together. Start by determining short-term goals first. What would you like life to look like within the next five years? Debt-free? 3 to 6-month emergency fund?
Once that’s squared away, discuss your long-term goals in depth. Would you like to retire at a certain age? Become a stay-at-home mom? Become a millionaire?
Having both short and long-term goals established for your family will give you a baseline of how to create a financial plan. Be sure to write them down and review them periodically. Your chances of reaching them will be much greater by doing so.
Discuss bank accounts
Before getting married, you and your spouse probably had separate bank accounts. Now is the time to talk about the pros and cons of opening a joint account or if it’d be best to maintain separate individual accounts for right now.
Combining bank accounts simplified finances for my husband and me and it helped us learn to trust each other. But if one spouse wants to maintain a sense of independence and protection, consider opening a joint account just for your monthly expenses and continue using your separate accounts for personal spending.
There’s no right or wrong answer here, but I will say that you must do what’s best for you.
If you would like to open a new joint account, be sure to choose an account with no added fees such as Sofi Money. Sofi Money is a great option because they never charge any fees, have built-in tools to help you save money, and offer a higher yield than traditional bank accounts offer.
Create a budget
Before I got married, I thought I was good with money because I paid all my bills on time. On the other hand, I had no clue where any of my other dollars were going.
Creating a budget is simply assigning a job for every dollar that you earn. It’s not enough to just make a budget, you also need to review and reconcile often to be sure that you’re staying within your spending limits.
Starting out, we used the envelope budgeting system. It helped us learn how to spend within our limits. Now, we’ve upgraded to a digital budgeting system through You Need a Budget (YNAB). My husband and I each have the app on our phones and have access to our budget 24 hours a day, 7 days a week.
Track your expenses
Knowing exactly how much you spend day-to-day will not only help you reach your financial goals faster, but it’ll prevent you from having small disagreements about money.
We use YNAB to keep track of our expenses and they make it so easy. One of the things I love the most is that if you happen to go over in one category, instead of beating yourself up over it, you can just roll money from another category and keep it moving.
Yes, you may have to say “No” to something else, but remember you can have some things just not everything.
Build an emergency fund
Having an emergency fund in place is key to reaching financial freedom. Without one, you’ll rely heavily on debt when unexpected, large expenses arise. Once you’ve created a budget and have an idea of how much your monthly expenses together are, determine how much you all should set aside to cover emergencies.
This number looks different for everyone. Some may feel comfortable with only $1,000 while others won’t be at ease unless they have at least six months worth of expenses housed in a savings account.
Evaluate your current financial situation and determine your level of risk tolerance. Then, you’ll be ready to make a decision.
Pay off debt
Debt can be stressful. Combine the debt of two people and imagine how threatening that can be especially if your debt exceeds five or six figures.
No matter how annoying it may seem, you’re responsible for paying the money back. Make a commitment to develop a plan to pay back all the debt you owe.
Becoming debt-free will not only transform your finances, but it’ll also transform your marriage and your life.
If you have no clue how to get started, I suggest reading a few personal finance books such as The Total Money Makeover by Dave Ramsey, Living Well, Spending Less by Ruth Soukup, and Broke Millennial by Erin Lowery. These three books completely changed my life.
Have check-ins often
Automation is so nice and lovely, but don’t let things go on autopilot. Expenses change, needs change, and goals change so it is nice to have check-ins often to make sure that you both are on the same page and are still on track to meet your financial goals.
The schedule is up to you. You can have money dates to align with your pay schedules, weekly, or monthly. Put a calendar reminder on your phone so that you don’t forget.
Make it fun each time by ordering takeout or going out to your favorite place. Just be sure it’s somewhere you’ll be able to talk. Sorry AMC pass holders. The movies aren’t a good idea.
Share financial responsibilities
It’s important that the two of you determine from the start how the finances will be divided. Will you go 50/50 on everything, contribute a percentage based on your income, or will you just pool your money together 100% and pay the bills from there?
Having this conversation early on helps eliminate nitpicking and resentment. Being clear about who pays what, and how much, will help make things fair, and eliminate late payments, fees, surprise expenses, and fighting.
There’s no right or wrong answer here, but by working together as a team, you’ll be able to put a system in place that benefits both of you.
Work as a team
You know the saying “There’s no I in team,” that’s how you should view managing your money together. For this to be successful, you must have the same goals and work together to develop a plan to accomplish them.
You should each find ways to build each other up and encourage one another. If you’re unsure of how to appropriately create synergy, take the 5 Love Languages quiz so that you can each see how you respond best. This will not only help strengthen your finances; it’ll strengthen your marriage as well.
Don’t hide purchases
I know you’ve seen the memes all over social media about hiding purchases from your spouse. Let me give you a piece of advice: If you want to manage money with your spouse effectively, don’t do this.
Something as small of overspending on Amazon and hiding the boxes in your neighbor’s trash will cause your spouse to lose your trust. Once it’s lost, it’s hard to get back.
Now, wanting to surprise them for their birthday or Christmas is a different story. I’m specifically talking about buying all the things on a credit card, and then hiding them or acting like you had said thing forever. Don’t be ashamed. We’ve all done it before. Myself included.
Set an allowance
Setting an allowance is so important. When we started our financial freedom journey, I wanted to pay off our six-figure debt as fast as possible not realizing the effect it would have on my mental health.
About six months in, I got burned out and felt defeated. I wanted to give up.
Instead of giving up, I gave myself $100 as an allowance and I felt free. Even though I don’t use it up every month, it’s nice knowing it’s there if I want to grab a coffee or a blouse from Target.
Don’t think of yourself as knowing everything and your spouse as knowing nothing. Even if you are more experienced in managing financial matters, it’s important that you work together as a team.
Don’t point out their flaws and all. You should each learn each other’s strengths and weaknesses so that you’re able to learn from each other, not consistently put the other one down.
Give 100% of yourself
As with anything else, to be successful at managing money or paying off debt or in marriage, you must give 100%. Dedicate your full effort to learning how to manage money with your spouse. If you meet them halfway, you won’t get the results you expect.
Learning how to manage money with your spouse can feel hard at first, but it doesn’t have to be painful. If you focus on keeping communication open, being upfront and honest, and preventing issues before they happen, having joint finances will be a breeze.
Remember that it’s a process. You’re both learning, and it’ll take a little bit of effort on both your parts!
Do you have any tips to share that helped you learn how to manage money with your spouse effectively?