Glblguy is the author of Gather Little By Little , a Christian personal finance blog focused on growing wealth using common sense biblical practices and based on the wisdom found in Proverbs 13:11 – “He who gathers money little by little makes it grow.” I encourage you to subscribe to his RSS feed.
Prior to getting control of our finances, the main reason my wife and I would fuss (that means fight/argue here in the southern U.S.) was over money and finances. Turns out, we weren’t alone. The number one reason couples fight is over money. Studies also show that the number one cause of divorce in the U.S. is due to money. Why? Here are just a few reasons:
- Communication – Really this is lack of communication.
- Control – This involves one person in the relationship having primary responsibility over the finances.
- Family – Examples include: Cost of children and how money is spent on them, in-laws or parents having influence over your finances
If you’ll note, none of these issues really have anything to do with money. The reason couples fight over money isn’t due to money itself, but due to the core feelings and emotions they have surrounding money. Money is the symptom, the 3 reasons above are the actual problem.
Fortunately, these three problems can be easily resolved, assuming of course you have a strong and healthy marriage. How? Have a weekly or monthly budget meeting. Personally, I prefer weekly, but for some a monthly meeting works as well.
What is a budget meeting? A budget meeting is an opportunity for you and you spouse to sit down together and review your finances and your budget together. If you didn’t quit catch the key point here, let me state it again: together.
Here’s what you need to do:
Decide who will be the accountant
General management of your day to day finances is best handled by one person. Updating your budget and net income statement, and tracking your day to day expenses is logistically difficult if 2 people are doing it. Who should do it? The detail oriented person. In our marriage, I am the detailed person so I do it. If you feel like neither of you are, then just decide which one is more than the other. Typically this isn’t a hard decision to make.
Formulate a budget and make it the controller
The next step is to formulate a budget together. Pick an evening and a time when both you and your significant other can sit down by yourselves in a quiet setting and spend 1 – 2 hours working up a budget. If you aren’t sure how to do this, please read my article on creating a budget.
Creating the budget together is important and allows both of you to have equal input into your finances. Each of you has a “vote” regarding where the money goes and how it will get spent. Having a “vote” is important, it gives you ownership in the budget and the process.
Once you have the budget in place and have agreed on what is being spent where, agree to follow it together. I would suggest you come up with some physical or verbal way of agreeing. This can be as simple as both of you signing at the bottom of your budget, verbally saying to other “I agree to follow this budget” or just simply handshaking. My wife and I do a pinky shake. This seems a bit silly at first, but has a powerful and lasting effect. For example, when I’m over at our local electronics or book store and I see something I really want, before I just go and buy it, a mental picture of that pinky shake always appears in my head reminding me of the commitment I made. At that point, unless we budgeted for it, I walk out.
By doing all of the above, you solved both the #2 and #3 reasons couples fight over money: Control and Family. By doing the budget together and agreeing to following it, the budget now becomes the controller of your finances. Since you both had input and both agreed, the issue of one person controlling the money and the other person feeling powerless is now gone. The budget, that you both agreed to, now controls the money. All blame for control is the budget.
You also solved the family problem since you both had input into the budget and you both agreed to follow it. The budget can’t be changed unless you both agree. Since you both did it together and current or previous family influence to the budget was factored in as you did the budget together.
Call a budget meeting
Here is where we solve the #1 reason couple fight over money: Communication.
Pick an evening where you and your significant other can meeting for about 15-30 minutes to review the finances. I would suggest doing this weekly, but at the very least it needs to be done monthly. The person that is responsible for tracking the budget should update the budget and current expenses prior to the meeting and come to the meeting with an updated budget report. The report should show the budget, how much money is remaining in each budget category, and any remaining bills or expected payments they are aware of.
Both of you should walk through the budget report together. Discuss areas where you have to much money allocated and where you don’t have enough. Make adjustments as necessary to cover upcoming expenses, but agree to those adjustments together.
Reviewing the budget weekly has a profound impact on communication. Communicating weekly lets each spouse know the current status of the finances, provides an opportunity to discuss areas where too much money has been spent and discuss upcoming unplanned expenses. These are expenses you may not have been able to plan for when you initially did the budget.
Our meetings take all of about 10 minutes and since we have been doing this I can’t recall the last time we fought about our money. Here’s a few things I’ve learned along the way though to help you out:
- If one of you overspends the other shouldn’t get upset. During the budget meeting, just move the amount overspent from another budget category. If there isn’t enough money, pull it from the emergency fund. With my wife and I, just having to do this is punishment enough for overspending. I feel terrible when I overspend, as I broke the commitment, and feel the impact of overspending when we have to move money around.
- Realize this is a journey and you will get better with time. When we first started budgeting, I was too detailed about it. I wanted it to be correct the first time and managed it to the tee. As a result, my wife didn’t want to follow it anymore as it was causing her too much stress. Realize that each month you do a budget you will get a little better at it. If you overspend or don’t follow it exactly, it’s ok. You will get better at it, it just takes some time.
- Do the budget for the upcoming month before the month arrives. Spend your income on paper before you even get it. Trying to keep a single budget to cover all months is confusing and difficult. Do a budget for each month a few days before that month arrives.
- How you keep your budget doesn’t really matter. I use a spreadsheet, but paper works just fine and so does extensive software like Quicken or Money. Just use what works for you and makes it easy for you to manage and track. Remember, we are trying to reduce stress not increase it.
- Mistakes of the past are forgotten. Don’t bring up mistakes from the past. What happened happened, and you can’t change it. Decide to move forward together. Bringing up mistakes from the past just causes stress, tension and breaks the team environment that’s being established.
Wrapping Up
I challenge you to give the above process a try for 3 months. In my experience in will make significant and positive change in your
relationship and in your finances. This process changed our lives, hopefully it will change yours as well.
Readers, what are your thoughts? What ideas do you have for reducing financial stress with your spouse or significant other? Do you budget? Why or why not? I would love to hear your insights and perspective via your comments.
You’re right about the importance of working out the budget together. I hear so many people say they can’t get their spouse to sit down and work on it. I guess it’s tough to convince some people of the benefits of a budget. Like President Coolidge said, “I regard a good budget as among the noblest monuments of virtue.”
I’ve e-mailed this post to my husband. I use to ask him all the time to sit down and discuss our budget and finances. When he does “meet” with me, he is distracted by the TV or plays with the dogs. I finally gave up and started e-mailing him the budget every month and updates throughout the month on how much money we have left. I think that I will start trying again. I feel like I have the burden completely on me and I don’t like that.
My wife and I have a budget meeting once a month. We decide where any “left over” money from the month before goes (if there is any) and decide our budget for the next month. With my income being irregular it makes it easier for us that we are a month ahead and not spending money as it comes in.
Thanks for the comments everyone and thanks to Lazyman for giving me the opportunity to write for his awesome blog. I’ve been a reader for a long time. Quit exciting to see one of my articles here on Lazy Man & Money.
@Quotes – I agree, I wish I would have started budgeting a long time ago.
@Michelle – Uh oh…hope he’s not too mad at me ;-) Sounds like it is completely on you. Have you told him how you feel and why it’s important to you? My wife doesn’t like it, I’m the nerd. So I prepare it in advance and give it to her to review. To get her to have some ownership, I ask her to change something on it. Let me know if it helps…let me know too if I should expect a knock on my front door from a mad husband :-)
@Saving Freak – That’s great. Since you meeting monthly, how do you both know how much is left in each category?
Thanks again for the great comments!
Fantastic advice! It’s true, once you have the initial setup and discussion on the budget, your money discussion go so much smoother. We give each other weekly updates.
This is definitely some good advice, I’ve seen a lot of my married friends have two very different patterns of handling money which normally doesn’t end well.
My husband really does not want to “waste his time” with a budget. Every time I ask him to sit down and do this with me, he says that he has been writing budgets for years and they never change anything so why waste the paper?
Of course, I do understand where he is coming from since it is extremely difficult to get a budget started when we are stretched so thin. We are usually completely out of money two days after payday after rent, the bare minimum payments on past due bills, $50 for a week’s worth of food, and a full gas tank for each of our cars to get to work. My bi-weekly paychecks go entirely to rent and payments on our cash advances and credit cards, and his weekly paychecks go to basic living expenses and any of the many little emergencies that come with having 3 young children.
Although I’ve not experienced it in my own household (my wife and I are pretty well aligned in terms of finances), I see quite a few people struggle with this stuff and struggle to help them…good to see any advice in that regard.
@Laura – Hi Laura, thanks!
@FinanceIsPersonal – Thank you, and same here…frankly I was one of them. Fortunetely we fixed that problem.
@Caeli – Sounds like maybe you don’t have a budget crisis, but maybe an income crisis. have you considered getting some extra income, at least in the short run to take some of the pressure off? That might make things easier for you until you get some wiggle room. Honestly though, the more thinly stretched you are the better the budget works. It controls your spending so you know where your money is going.
@pfodyssey – Thank you, and I agree, it’s pretty scary how many couple have problems in this area.
Thanks everyone for your comments, and I’m sincerely glad you enjoyed the article.
[…] Here are a series of articles and blog postings dealing with couples and personal finance. I hope that the advice presented can help you and your spouse share your financial lives together in harmony. […]
The author is right, but there is more. The reason that female and male partners argue about money is more fundamental. They are inherently programmed to react differently. The female X and male Y chromosome shape distinct neuroendocrine systems that ultimately influence attitudes and behavior””sometimes dramatically. This includes attitudes toward money.
One of the foremost causes of couples’ fights about money is that men and women react disparately to stress. Both genders’ brains release oxytocin and vasopressin, but these hormones act differently in the presence of his testosterone and her estrogen. Circulating testosterone in males enhances the effect of vasopressin, and both hormones, testosterone and vasopressin, are known to increase aggression.
On the other hand, circulating estrogen in females’ bodies heighten the effect of oxytocin, a calming hormone linked to a tendency to communicate in females. This is the opposite of the male response. In addition, women have more brain area allocated to word production than their male counterparts, which makes them inclined toward greater speech fluency. Normally, a woman wants to discuss her problem when she is under stress””to her mate, her friends, her adult children””as a means of relieving it. Men under tension typically want to shout, lash out, or seek solitude.
Both blame the other for this problem. Small differences of opinion accelerate into something far more nasty and significant than either of them intended. In the end, they fight not only about the issue at hand, but often about their separate fighting styles as well.
One of the foremost causes of couples’ fights about money is that men and women react disparately to stress. Both genders’ brains release oxytocin and vasopressin, but these hormones act differently in the presence of his testosterone and her estrogen. Circulating testosterone in males enhances the effect of vasopressin, and both hormones, testosterone and vasopressin, are known to increase aggression.
On the other hand, circulating estrogen in females’ bodies heighten the effect of oxytocin, a calming hormone linked to a tendency to communicate in females. This is the opposite of the male response. In addition, women have more brain area allocated to word production than their male counterparts, which makes them inclined toward greater speech fluency. Normally, a woman wants to discuss her problem when she is under stress””to her mate, her friends, her adult children””as a means of relieving it. Men under tension typically want to shout, lash out, or seek solitude.
Both blame the other for this problem. Small differences of opinion accelerate into something far more nasty and significant than either of them intended. In the end, they fight not only about the issue at hand, but often about their separate fighting styles as well.
Keeping expenses under control is very important. And to do that it is mandatory to maintain a monthly budget. I am doing this for a few years already and I say that it pays off. I started first with an excel sheet, later I realize there are free online tools which helps you to do that.