Managing Money in Marriage by Caroline

Finances are something every couple has to tackle. There’s no way around it. Even if you make millions, finances have to be discussed for a strong long-term marriage. 

According to a new survey by Ramsey Solutions, money fights are the second leading cause of divorce. Going into a new year is the perfect time to evaluate your financial goals with your spouse and make sure you set yourself up for financial success in 2020 and beyond. In this article, I’m going to discuss how to start budgeting and what that conversation looks like in my marriage. 

I’ve been told my marriage looks perfect (I can assure you it’s definitely not) and that we seem to manage money so well. There’s a lot of planning and discussion that goes into our budget and finances that people don’t see. So much stress and anxiety in marriage disappears when you and your spouse are on the same page about finances. 

My hope is that someone out there reading this will take the leap to set a budget with their spouse and start making financial goals together. I promise it can actually be a lot of fun and liberating to take hold of your financial future! 

Like a strong marriage, strong finances take constant work and reevaluation. Although my husband and I both like budgeting and discussing money, it’s not easy to come to a conclusion on how to spend it. We still get frustrated and disagree. 

You have to go into this conversation with realistic expectations. Couples have financial problems because it’s a difficult topic to discuss, so it probably will be for you and your spouse too. That’s okay! Simply starting the conversation about money is the first step to financial success in marriage.

Creating a budget together is square one to having financial success. If you don’t have a budget, start with the basics; if you’re currently using a budget, take time to review and revise it together. Whether you are in college and don’t make anything or you make six figures, every household needs a budget. 

If you’re not sure where to start, use this graphic to set an amount for each category every month. Of course, this amount will need to be adjusted based on your household’s needs. We use the app EveryDollar to set a budget and track spending. 

YNAB (You Need A Budget) is widely popular, but does have a monthly fee. Discuss with your partner what would work best for your circumstances. If you haven’t had a budget previously or your income has drastically changed, I’d suggest starting new. Track your spending and reevaluate every month until you are spending within that budget and feel comfortable that you can stick to it. 

It’s important to save and plan for the unexpected when creating your budget. Having an emergency fund of at least three months of expenses is highly recommended by financial experts. 

When in school or during times of hardship it can be difficult to save so much, but even having $1,000 saved away will make emergencies like a doctor’s bill or car repair so much easier to tackle without going into debt. Eliminating the constant worry of not being able to pay for a small emergency will greatly improve you and your spouse’s relationship with money, and make it easier to talk about tough financial decisions. 

Of course, the trickiest part of having a budget is sticking to it. A lot of people feel a budget constricts them and is telling them how to use their hard-earned money. Really, though, you and your spouse set the budget, so you are in control! 

You have to prioritize and be realistic, though. It’s just not practical to think you can spend money on travel, beauty, eating out, entertainment, and clothes every month while living in the newest apartment and having a car payment. 

I know your favorite instagram influencer would have you believe differently, but the only way that kind of life exists is with mounds of debt. When creating your family budget, decide what line items are a priority for you. Even with a budget in place you can have things you want, just not everything.

Our family dynamic has changed recently, which means my husband and I will also be setting a new budget and creating new financial goals this year. Recently my husband graduated college and got his first real job (meaning salary, benefits, retirement, etc). Previous to this, I worked for two years, putting him through school and making the majority of our household income. 

Between paying for school, rent, food, and transportation from one income we were like most kids in the college town, “scraping by” until my husband finished school. One goal that really set our finances on track was deciding we would both graduate debt-free. It was something that was so important to my husband and because of that, became important to me too.

We took summers off of school to work multiple jobs and save. I’ll admit a lot of things just worked out for us, but there is truth in setting yourself up for success. We moved to a recreational mountain town and sacrificed comfort and privacy by sharing a space with river rafting guides for free rent. My husband took a job as a bus driver and got his CDL because it paid more than guiding. We took on odd jobs and tried to get as much overtime as possible. 

Although our situation was unique and obviously wouldn’t work for everyone, it’s also about making your surroundings work for you. We hardly spent any of that money we made simply because there weren’t many places to spend it! Of course there were a few restaurants and shops, but we choose to spend time together doing free activities outdoors instead. Looking back on these summers it sounds like we should’ve been miserable— working all the time and not spending too much, but it was just the opposite.

The easiest way to reach your financial goal is to not treat that time of frugality like it’s something to endure and get past. Having a budget, setting limits, and restricting spending is a reality of life and really the only way to reach financial freedom. It’s best to get comfortable with that frugal mindset. The feeling of reaching your goals is well worth the sacrifices, especially when it’s something you and your spouse worked on together.

Setting financial goals goes hand-in-hand with setting a budget. For us that has changed from graduating debt-free to more long-term goals. It’s been interesting to see and discuss what is important to both of us in this next stage of life. Our financial goals are now saving for retirement, a house, and investments. 

Whatever your goal may be, punch the numbers into an online calculator and figure out that magic number needed to reach it. With sacrificing a little in other areas of your budget, you can reach a goal together and save for something you really want. 

This might sound like “Let’s skip seeing a movie every month and only eat out once a week instead of 2-3 times. We will put that money towards paying down debt. Cutting down on our entertainment and eating out budgets mean we could pay off the car two years early!” Do the math and figure out how long it would take to save for your goal. It’s probably sooner than you think.

With the transition of finishing school and getting a new job, we recently moved to Seattle. Before moving, we talked about what our financial priorities would be. For us it was worth it to spend a large portion of our income on housing in order to be in a safe building close to my husband’s work. Now that we’re here, it’s tempting to go shopping and constantly eat out, but we already made the decision to splurge on housing. 

Knowing beforehand your priorities helps with the temptation to break your budget, and helps you stay grateful for the things you can afford. Discussing these goals with your spouse and coming to them together helps so much in achieving them! 

My husband has reminded himself of this already. He would love to go out to eat everyday for lunch, and has a lot of co-workers who do. Instead of blowing the budget and going out anyways, he reminds himself that one coworker who eats out daily has an hour commute. For him, it’s more enjoyable to eat out and save money on housing. We made the choice to live downtown in a nice apartment. Thinking through why you’re making the sacrifice makes swallowing it (the leftovers for lunch) a lot easier. 

The need to manage money with your spouse never disappears with time or a bigger income. So I give you the challenge of discussing money with your spouse for the year. Make a budget, set financial goals, and enjoy the sacrifice of saving together. We’ll be right there with you reassessing how to reach those financial goals. I guarantee in a year you’ll be glad you started that conversation today!