You’ve heard it before: money is one of the top things couples fight about. And no wonder. “Money has profound meaning for people—from security and safety to power and self esteem,” explains Harriet Pappenheim, a New-York psychoanalyst and author of For Richer or Poorer: Keeping Your Marriage Happy When She’s Making More Money.
Surprisingly, though, your emotional connections can actually help you and your partner get back on the road to financial harmony. Here are six solutions to common family money complaints.
Complaint #1: “We have no money for the things we love to do!”
Solution: Have a heart-to-heart.
Put your finances aside for an evening and recall the common dreams and goals you first shared – buying a home, having kids, traveling. “These objectives are the reason why you got together in the first place, but it’s easy to lose track in the everyday bustle of jobs and credit-card bills,” says Mary Claire Allvine, a certified financial planner and co-author of The Family CFO: Te Couple’s Business Plan for Love and Money. Recalling these shared dreams will inspire you to take control of your finances together and take the sting out of any budget restraints required to do so. Don’t even think of seeing a financial advisor until you’ve had this discussion, says Allvine. “Most people don’t follow through on financial advice because it’s disconnected from what they’re trying to achieve.”
Complaint #2: “You’re spending more than we’re earning!”
Solution: Examine your cash flow together.
Cash flow has a less difficult and restrictive ring to it than the word budget, says Allvine, but it still involves some tough choices. Rather than focusing on details such as how much you spend on dog food and coffee each week, however, take a close look at your fixed expenses and whether they reflect your shared values. As Allvine says, “It doesn’t matter whether you buy that latte if you’re spending $500 a month on a SUV you don’t need to be driving.” Once you’ve had a chance to review your expenses, consult with a financial advisor to see if they can come up with other ways to save and help you achieve your goals. By the way, this is not optional. If you are spending more than you are bringing in, things will only get worse.
Complaint #3: “Sorry babe, you’re not single anymore—so stop spending like you are!
Solution: Bank on each other.
Sharing a joint bank account for household expenses and keeping separate accounts for personal purchases may help couples with conflicting money styles, says Pappenheim. But Allvine cautions that the joint account should definitely cover retirement and dream-goal savings, as well as the bills. “It’s a lot simpler if you have a joint checking account,” she explains, because couples need to accept the reality that they’re living off the same asset base. You’ll also have a better picture of your overall fiscal status. Research from Ohio State University actually found that the husbands and wives stated different amounts when asked separately how much the couple earned and owed. Husbands tended to state a higher combined income than their wives, while wives were more likely to state a higher combined debt than their husbands. You may want to agree to a dollar amount at which you have to check in with each other. “Depending on your income, it could be $50, $100 or $1,000 – each one has individual discretion under that amount without asking the other,” says Pappenheim. If one person is spending considerably more than the other consistently, though, then it’s time to talk.
Complaint #4: “Somebody has to take charge of our finances!”
Solution: Take a role.
Allvine recommends deciding who will handle the day-to-day cash flow and bill payments and who will cover your investment planning. If neither of you are interested, flip a coin and switch roles regularly. The cash-flow manager should provide a monthly status update to the other, while the investment manager provides quarterly updates on things such as your Individual Retirement Accounts (IRAs), 401(k)s and opportunities to get better rates and terms on credit cards or insurance, explains Allvine. (One person can handle both roles if both partners are comfortable with this arrangement, she adds.) But make sure not to slide on the update meetings. It can be very unfair for one partner to be carrying the weight of the family finances on his or her back and always being the killjoy that says, “sorry, we can’t afford it,” while the other goes blissfully through life assuming everything’s being taken care of.
Complaint #5: “Our friends always seem to have more money than us!”
Solution: Are you so sure? Maybe it’s all smoke and mirrors. Find someone who’s made it happen.
Talk to an older couple who have reached the goals that you’re trying to achieve. “You’re not asking how much money they earned, but which tradeoffs they made to retire young or send their kids to school,” says Allvine. Be wary of comparing yourself to your peers’ financial style or choices, though. “This can lead to envy, anger and trouble,” says Pappenheim. And if they roll their eyes when you want to stay home and watch a movie instead of springing for $100 concert tickets, it might be time for some new friends. But share your goals with your friends. Who knows, they might be in bigger debt that you and don’t know how to fix it. Maybe you can find ways to save together and have fun. The more people around you that support your goals, the better.
Complaint #6: “We don’t know how to get back on track.”
Solution: Stick to the basics.
Your first thing is to sit down and talk goals, the next is to lay out all the expenses. Follow our 12 Step Money Guide and talk to a financial planner on ways to get back on track.