Overcoming Budgeting with Your Spouse, Hand-in-Hand

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Love is a beautiful thing. All of us can relate to that wonderful feeling of being in love. Remember how captivated you were during those first few conversations, when you were learning what they are like, what they like, their dreams, their fears, how they grew up, who their heroes are. We can relate to being enamored with the way this person walks, talks, and even their quirky laugh. We can all relate to the indescribable joy that fills our hearts when we are loved in return.

Some experts have declared that a divorce is equally traumatic as losing a loved one to death. Why do I mention this? When you look into the top reasons for marriage failure, money is cited as the most common reason for a divorce, after infidelity.

It is from this premise that I would argue that succeeding in money management is more important for marital success than it is for financial success. In other words, if you and your spouse were to fervently do everything in your power to protect your marriage from harm, your efforts would inadvertently result in your financial success.

If you’re anything like me, fighting for your marriage will come a lot more easily than following a set of rules characterized, for the most part, by restriction and restraint.

For this reason, I would suggest that you and your spouse perceive at the mere hint of financial disunity to be a possible threat to your marriage that needs to be nipped in the bud and dealt with it with those sentiments.

Prevention is Better than Cure

As a personal finance and entrepreneurship aficionado, you can probably imagine that a clear and viable financial future is something I had to be able to visualize to even entertain the thought of being romantically involved with anybody.

I was highly favored to have been blessed with my fiancée. She is beyond amazing. She is also, clueless (in comparison to me) about finances. She pretty much has one trick up her sleeve when it comes to finances: frugality and thrift.

Saving money never made anybody rich, anywhere. This being said, savers have in them the most important attribute that is needed for anybody to succeed financially. Savers already have an immense amount of discipline, this gives rise to delayed gratification, which gives rise to financial success.

I, on the other hand, am a maverick. Always been that way. In virtually every facet of life, if the masses all go right, I will most likely go left. When the world says save and put your money in a bank, I am much more inclined to want to invest all of my money into my business, or self-development – my version of a savings plan. Unlike saving, these two methods have made a lot of people, a great amount of wealth.

My fiancée and I coming together is probably one of the greatest pictures of the beauty of contrasting in the context of romantic love. She is cautious and reserved, while I am a tenacious, non-conformist.

Recognize That You Have Been Taught About Money Differently

We are both correct, even in the absolute sense and we respect each other’s unique view around life, time and finances. This mutual respect is the single most important step to being able to work together towards a common, unified goal.

What has helped us, furthermore, was to figure out, at the earliest stage of our relationship, how we are going to make our finances work given how different we are.

We spoke about it as a couple; together, we tried it out for ourselves to get a closer look of what our financial patterns would look like before we got married; we are attending premarital counseling where finances is a big talking point; together, we have selected our marriage regime based upon this; we have even adapted out career paths according to this.

The point I am making is this:

Your budget as a couple will never look like the Jones’,

so you shouldn’t look for a cut and dry template that you can look to seamlessly fit yourselves into. Take all the information you get, and tailor a bespoke plan that fits your situation and both of your dispositions.

More than this, use this to preempt financial situations that can arise due to your personality types and let your budget structure speak to this.

Most importantly, start as early as you can. The longer you wait, the harder it will be to get into the rhythm and to correct bad habits.

Transparency

I have been a Financial Advisor for long enough to know that a good number of people have no idea what their spouses earn. As an advisor, I have come across wives who keep their income a secret to protect their husband’s ego, allowing him to feel like a provider.

I also have come across:

• wives who keep their income a secret because they want to salvage a portion of their income and keep it safe from their spendthrift husbands;
• husbands who want to keep their income a mystery;
• hubbies who want to appear to earn more than they actually do to their wives while incurring debt to keep up the appearance;
• husbands who want to appear to earn less, so as to protect their finances from their prodigal wives.

I have literally seen all kinds of levels of transparency around finances.

My fiancée and I are 100% transparent about our finances. We know that this probably has more to do with our personality types than the quality of our relationship. If you and your spouse don’t share this level of transparency, it is okay. We are all different. This is not to be considered as a measure of the quality of your relationship.

Transparency is Unavoidable for Financial Success

If you are not comfortable with being fully transparent about your finances and earnings, you could keep running your finances separately but start up a third, common money pool that you work to grow together. This money pool must be treated with 100% transparency.

You would just have to bear in mind two things:

• Without a proper understanding of earnings, one of you may overcommit or under commit to the plan
• If a contribution amount is suggested, one of you may feel ashamed to admit that you can’t afford to and make not-so-wise decisions to keep up the appearance, thus ultimately nullifying what your budget set out to achieve

The more transparent you are, the better it will be for your finances. Your budget will be MUCH MORE realistic when you know exactly what you are working with. If you are not fully transparent, it may be a good idea to start being a bit more transparent, for the sake of your finances. You could agree to bring a third party in if it will make things a little easier.

Set Goals

Turn budgeting into a romantic event. Find things that you both want to do or achieve in the future and let your budget speak directly to this goal.

Say, for example, you guys want to take a trip together sometime in the future. Set a prerequisite for being allowed to go on the trip.

Perhaps, you want to go on a trip in six months’ time, pledge to one another that you will only do so if you have successfully paid off that credit card or else you will have to use the money you earmarked for the holiday to pay off the credit card. If you are like my fiancée and I, with pretty much no debt, your condition could be to have increased your savings by a certain amount and have this amount left in your savings AFTER you have come back from your vacation. This is an example of a short term goal.

Create an Incentive for Achieving Your Goals

Create short, medium and long term goals and figure out what you would need to do to achieve these goals. Find items in the house that you each personally love a lot and agree to each put your item on the line as a backup plan if your goal is not reached.

Take for example, in our case, my bass guitars are my world, and my fiancée loves her paintings. For the medium term goals that we have set, we have agreed that we BOTH have to put up one of these items as collateral in case we don’t reach our goal. If we miss our target, we will pawn BOTH of our prized possessions to attain our goal. Naturally, you have to allow for exceptions that may throw you off, like the death of a family member or any other unforeseen circumstance.

It is important to both have something to lose. The last thing you want to do is start blaming one another, agnostic of whether one of you were wrong or not.

What we have realized after creating this system was that oddly enough, I wouldn’t want to go off budget because I did not want my fiancée to lose her prized possession; she, in turn, worried about the same for me and did her best to save as much as she could.

This inadvertently strengthened our conscientiousness and in turn our relationship.

Grow Together

As a couple, make a concerted effort to enhance your financial acumen.

My fiancée and I like to read, and we like to read about marriage in particular. Not only has this been a great investment that strengthened our relationship, but it made it easier for us to be willing to grab any other kind of book that can improve our relationship.

My fiancée reads every single blog post of mine before I post it. The reason for this is twofold; she does it to let me know if it makes sense to somebody like her who has received no training in finance, and also to get a better sense about my worldview on finance.

Over and above this, we read books together, watch educational videos, listen to podcasts and play financially educational games like monopoly whenever we get the chance.

Again, the point is to make it romantic and fun, but you have to keep growing, together.

Allow for Individuality

We have agreed to allow one another certain indulgences. This is probably the single most important element of our budget, as it is the key to making our budget sustainable. The only rule is that it must be an indulgence that is not detrimental to any of our physical health or our relationship.

This provision for indulgence takes two forms:

• A fixed monthly amount that each of us is allowed to spend without having to justify it
• A portion of our monthly budget that we set aside for a quarterly indulgence for each of us

I have spent an obscene amount of money building up my bass guitar arsenal. I have several bass guitars, and I still plan to add to my collection. This makes very little sense to my fiancée. My fiancée and I are both artsy, and she loves these paintings that, to me, are essentially thick black lines painted on a bright white canvas. Through this allowance, we can both be allowed our indulgence without having to feel bad or judged.

With this allowance for indulgences like these every now and then, the idea of a budget feels far less cumbersome, and as a result becomes more sustainable.

It has also added so much value to our relationship. We always laugh about how we both end up using our Indulgence Allowance to get surprise gifts for one another, instead of ourselves. Thus, this has become yet another way in which inadvertently strengthened our relationship.

Avoid Using Credit for Everything

This one is easy for my fiancée and me, but I do appreciate that it may be a bit of a struggle for other people.

The way we view debt goes something like this:

We will all inevitably one day be faced with a situation that demands from us, financially, more than what we have available in disposable income. Our reaction to this situation will always look the same, but be mirror reflections of one another if we were to draw them on paper.

We endure the big spend event and have to set aside money each month afterward to repay the debt. Or we could go a different way, and set money aside monthly for a large spend event that is unbeknown to us at the time and also be able to endure the spend-event when it comes.

Our take is that, if we had a debt to pay, we would most likely find a way to service that debt faithfully so as not to risk having our credit score marred. Similarly, it is really up to us to find a way to service a savings commitment lest our no-debt legacy be marred.

This is our view on credit as “Debt”. We have a different view when it comes to credit as “Leverage.” You can read more about that in, Your Mortgage is a Poverty Trap, and, The Importance of Credit on Your Path to Financial Freedom.

Your mind may be creating all sorts of excuses for having debt right now, or presenting to me an imaginary PowerPoint presentation on how your particular set of circumstances are unique. I don’t expect this to make sense immediately, practically, for everyone, but I do trust that I have, at the very least, planted a seed, especially since you are reading this voluntarily and are pretty much on the right track already.

Create Rules & Consequences

You need to create rules and consequences to see to it that you are both inconvenienced if one of you should break the rules of your budget. Again, turning this into a blame event will most likely not edify your relationship, thus my fiancée and I have come to prefer that both of us suffer the consequences if one of us should misbehave.

I cannot tell you how profoundly increased our motivation to not disappoint one another has become ever since we adopted this approach.

You are free to try your own approach, but we really can’t see why this couldn’t be a universally applicable technique.

Make Extra Money, Together

This part of money management speaks a lot more to my natural disposition. Saving money and budgeting are an important part of financial management, but any plan that ends there will definitely bore me. I am much more excited by the prospect of being able to control money, than being controlled by money. Saving and budgeting sound a lot to me like the money is in control. Being deliberate about making more money sounds a little more to me like me controlling money.

My fiancée and I are both of the, quality time and physical touch, persuasion, in the realm of love languages. This may sound romantic and cute, but it actually made learning to be productive when we are together really, really hard.

We have since learned how to do this and we are always finding ways to make extra money. As per our love languages, we spend a lot of time together, each with our own laptop out, finding new ways, or working together to make money. With the internet being what it is today, this has become a whole lot easier to do, even if you aren’t entrepreneurially inclined. 

Making money online, thankfully, is relatively easy these days. I write a lot about this topic, so check out some of my posts.

You could also start a blog together. You can enroll for my Start Your Own Blog e-mail course below.

Write Down & Revisit Your Agreements

Writing down your goals just makes them more solid. I know this sounds cliché and like something you have heard before, but the simple fact is that it is prolifically true and it can’t be denied.

The second reason to do this is an even better motivation. It gives you and your spouse an opportunity to acknowledge and record your victories. This also serves as a testament to your successful teamwork and gives you the motivation to want to do it again, and achieve even greater feats

Run Your Own Race

Lastly, and most importantly,

“Run Your Own Race.”

Your husband may take longer to come around than Jane’s husband did; your wife may be making less money than Jane is; you may not have gotten the same lucky break vocationally that John did, even though you went to the same university and got even better grades than he did.

Stay in your lane and your resolve will reward you at the end of the day.