Do you and your spouse ever fight over how to manage money? If so, please read on to see what damage this may be causing to your marriage. It may be a lot more than you realize.
A study done by the American Institute of Certified Public Accountants, reported that approximately 27% of Americans say that a disagreement about financial issues, usually blows up into an argument. This issue tops the list of other causes of arguments like children, work, household chores, and friends. This not only applies to married couples but also to cohabiting couples as well.
Spousal arguments are never easy, but arguments over money tend to be more distressful and generally linger on. Another study that was done by the Utah State University, found that disagreements that occurred once a week between married couples, over how to manage money, would end up in divorce twice as likely as those that argued less than once a month. Big difference.
This is due in part because arguments over how to manage money generally include more than just finances. Money has come to represent so many other things such as power, control, love, freedom, and even self esteem. Decisions made concerning money, are very personal, and this is why those can lead to nasty fights.
It’s back to the original problem of having “financial intimacy”, many couples can only see their own views on saving and spending and can’t see or understand where their spouse is coming from. We mentioned in a previous article that our views or opinions aren’t the only and best ones, and this is so true here. We absolutely must learn to listen to our spouse’s view, and communicate, not ridicule or criticize, and never fight over how to manage money.
If a couple can talk comfortably about sex, a very personal issue, then why not about money? When both partners give and take, then this will be a very important beginning in resolving money issues. Once we have a better understanding of our spouse’s financial views and opinions, we’ll be able to prevent those nasty arguments, or at least prevent them from escalating into an all out free for all.
A group of financial experts were asked their opinions on the sensitive topic of how to manage money, and they pretty much stated what we previously said. Some had some interesting suggestions and one had a new term called “financial transparency”. All this means is that we need to be open about our finances with our spouse, and we agree. We need to be honest right from the get go and not hide anything.
Before you’re married, let your future spouse know if you have debt or some other possible legal problems, and that includes a previous bankruptcy. There is no way that you’re going to take that into a marriage and keep it a secret for very long. It will come out, and at that point, you have to explain to your spouse why you didn’t tell them about it. You’ll know when the time is right before you’re married to share these types of issues. Also, use some common sense and tact. Don’t be in a passionate or intimate moment and then look into his/her eyes and say “can I review your tax return”? Just be honest!
Some planners recommend that couples should share credit reports as well as their tax returns so that in doing so, there are no secrets. Their recommendation is partly correct, but those two items won’t reveal everything. Be honest and tell all concerning your finances is my suggestion. One planner suggested that this could be done at the beginning of the marriage, but I don’t agree with that at all. Each spouse has a right to know before the marriage begins.
If one partner has a substantial amount of debt coming into the marriage, a prenuptial agreement might be a wise choice. The couple should meet with an attorney and see what options are available. Before the wedding day is a good time to create a budget, and that can help to eliminate future arguments on how to manage money. Preparing a budget will also give each spouse all of the financial facts needed to get started in their married life together.
Having a budget in place will enable both partners to see all income and expenses and will show how much each should be spending. At this stage, it’s generally a good idea to allow some flexibility in the discretionary purchases category, as this will be the one where most future changes are made.
Don’t make a budget at this point that is very constricting because it is doubtful that it will be followed by both partners. There is a period of time, when you’re first married which is like a learning stage. Each will be learning things about the other such as habits, etc., and this can encompass many things. When the dust settles, so to speak, you’ll be able to sit down with each other and revisit the various budget items. What it boils down to is that there are two basic types of individuals – a spender or a saver.
Because opposites attract, usually one spouse is a saver and one is a spender.This can lead to conflicts down the road and this is why open communication is so important. Equally important, the couple needs to discuss the use of credit cards. As we mentioned before, each spouse needs to understand the others ideas on how to manage money and not be critical or resentful. This in itself can help to begin their married life on the right foot and to keep the doors of communication wide open. A couple of advisers recommended the couple discuss each parents money habits to see what ones were inherited by the child, but I don’t agree. Even though we often inherit our parents views regarding money, it’s not always the case, and some parents might not want their personal finances known. I could be wrong, but I believe that a parent’s finances should remain personal and confidential until that individual(s) wants it shared.