Love & Money: Can You Overcome Your Financial Differences?
by , CFP®, President, Charles Schwab Foundation; Senior Vice President, Schwab Community Services, Charles Schwab & Co., Inc.
February 8, 2012
My husband and I have been married for less than a year. He comes from a moderately wealthy family and my family was always scrimping for every penny. Ironically, I'm now earning more than he is, but he's still ready to spend. How do we sort out our differences?
The old adage "opposites attract" seems to apply even to attitudes about money, so it's not unusual for couples to have different approaches to their finances. The differences alone aren't necessarily a problem, but how you deal with those differences is important to make sure they don't become one.
The first thing to remember is that you're a team. It doesn't matter who's making the most money. It doesn't matter if one of you is more of a spender and the other a saver. What matters is that you agree on your common financial goals and how you'll work together to achieve them. But agreement only comes through understanding one another's feelings about money, and the only way I know of to do that is to talk.
Start the conversation
Talking about money isn't always easy, but I'm convinced that it's essential to your long-term financial—and personal—happiness.
You might start by looking back over the past year. Compare where you were financially when you first got married to where you are now. Begin with the positives. For instance, maybe you're closer to a goal such as the down payment on a home. Or perhaps you've grown your savings significantly. Give yourselves some credit for what you've accomplished. Talk about the goals you started out with. Have they changed? If so, discuss what's now important to each of you.
Then review how you've been handling your expenses and what you've each been contributing. Do you both feel it's fair or is it time to make some changes?
Looking at the big picture together will give you both a chance to explain your differences—and also to acknowledge and appreciate your similarities.
Confront the emotional
Now's the time to be open, honest, willing to listen and nonjudgmental. If you didn't discuss your different financial upbringings before you got married, do it now. The money values we're raised with have a way of sticking with us. You may have thought you'd gotten past your parents' attitudes about spending and saving, but it's hard to shake them. Talk it out. You're obviously concerned about your husband's spending habits. He may be equally concerned about your more conservative approach. And realize, too, that your larger salary may make him feel he has less control.
Here again, your values and your goals should be your guide. As a team, you should be making the big saving and spending decisions together, such as buying a house, taking a vacation or planning for retirement. And working toward those goals together can be a real bond. But in any relationship, there's room for autonomy as well as a shared vision. So once you have a handle on the decisions you'll make together, you can look at how to give each other a little financial space.
Review the practical
To keep money differences from becoming a relationship problem, I often recommend taking a "yours, mine and ours" approach, with a joint account for shared expenses and separate accounts for personal expenses.
First, figure out how much money you'll need each month to cover all of your shared expenses, including your mortgage or rent, utilities, household items, groceries, dinners out, joint vacations, joint savings, etc. Anything over this would go into your personal accounts equally, which means that the person with the bigger salary will contribute more to the joint account.
The beauty of this system is that it allows you to work as a team but also gives each of you some financial autonomy. You can each spend an equal amount on things like car payments, clothes, or other personal items (you two determine what's joint and what's personal) without checking in with the other. If your husband wants to spend all of his discretionary money, no problem. If you want to save some of yours, that's your choice.
Now this might be a bit more complicated if your husband came into your marriage with his own assets. But that doesn't really interfere with the "yours, mine, and ours" approach. That money is rightfully his separate property, and he may or may not choose to share it.
As you approach your first anniversary, this is a perfect time to discuss your future and take a look at your goals and dreams and the part you'll each play in making them come true. If you keep open minds and open hearts, it could actually bring you closer together.
The information on this website is for educational purposes only. It is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager.