Money & Marriage: A Volatile Mix
Posted on June 23, 2006
Throughout the ages, arguments over money or the lack thereof has been one of the leading causes of marital strife and divorce. Roommates have split up and friendships have been destroyed over money problems. Otherwise loving couples have allowed disputes over finances to escalate into name calling, shouting matches and even fights resulting in physical violence. Why? Why have couples let differences over money destroy relationships and break apart families? Could it be because they play the blame game when money gets tight or things aren’t going the way they want? Each blames the other for not earning enough or for reckless spending.
Today, few couples, especially ones just getting started, are able to make it on a single income. As a result, both work and often end up with jobs that have wide disparities in income. Many times the higher wage earners will say or do things that give their partners feelings of inadequacy. Hurt feelings can lead to criticism of the other’s spending habits, and neither of these actions are nourishing to the development of a healthy and lasting relationship. One hurtful remark leads to another and causes the dispute to escalate. No one wants to admit defeat and what started as a simple discussion often accelerates into a full blown argument. It continues to amaze me how money and marriage can be such a volatile mix.
Wouldn’t it be nice to have a simple system that would enable both parties to participate in planning the way their money is spent and be able to contribute proportionally to the financial well being of the relationship? Well, fortunately there is.
Here’s a tip. Whether you’re a married couple or several roommates living together and sharing expenses, there’s a way you can handle financial responsibilities in a fair and responsible manner that cuts down on heated discussions and hard feelings. It’s a three step process that anyone can follow.
Step one: Sit down together and agree upon what bills will be shared. These could include rent or house payments, utilities, groceries, vehicle payments, gas, credit card bills, insurance, or other use of funds that you agree upon including savings plans. The list should not include personal items like clothes, shoes, golf, bowling, or the occasional night out with the guys or girls. Once you agree upon which expenses will be shared, break each one down into its average monthly cost. Be sure to include one twelfth of yearly expenses or one sixth of semi annual expenses. The purpose of this step is to identify the true monthly cost of the expenses you will share.
Step two: Decide on the percentage of the monthly expenses each party will be responsible for paying. This could be an equal percentage or where there is a wide disparity in income, each party could be responsible for the same percentage of expenses that their income represents as a percentage of the total income. It’s not as important how expenses are split as it is that an agreement is reached before, not after going to step three.
Step three: Open a separate checking account from which the bills will be paid and decide who will be responsible for making the payments. This responsibility can be alternately shared for varying periods of time or one person can handle it all the time. What’s important is that each person deposit the agreed upon amount every month. If expenses increase, the amount to be deposited must be adjusted so that the account always contains enough money to pay bills when they come due.
This three step process is simple, but it accomplishes a number of things, all of which are positive. By far, the most important of these is identifying the actual cost of living together. It let’s you determine if your combined incomes can support your lifestyle. If not, you’re stuck with three choices; increase income, reduce expenses or go in debt. But, with the facts in front of you, making a wise decision becomes a lot easier.
Another important benefit is that each party retains whatever income is left after paying the amount needed to fund the monthly expenses. This leaves each person with some mad money for the kind of personal spending that often causes arguments. It’s hard to find fault with spending that doesn’t affect paying the monthly bills.
By reaching agreement on shared expenses and setting up an account to handle them, married couples or roommates eliminate a big source of relationship strife. The only issue is whether or not each person made their respective contributions. This eliminates the blaming and finger pointing that often comes with unplanned spending from joint accounts. Having unrestricted use of money that is not needed to cover agreed upon expenses preserves the dignity and self respect of everyone involved.
Relationships have enough conflict without adding financial discord to the mix. This simple three step process will greatly reduce the stress that accompanies discussions about money. Try it and see if it doesn’t improve rapport with your mate or significant other.
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