Love and Money

As Valentine’s Day approaches I want to explore the issue of love and money. In over thirty years as a financial planner (and even more in life), I’ve noticed that there are very few topics that are more crucial to your marital success than whether you and your significant other agree fundamentally on how to manage your finances. Do you share the same priorities? Is one a saver and the other a spender? According to a survey by Money Magazine, couples fight about money twice as often as they bicker about sex. Money (or lack thereof) is usually the number one reason for divorce.

You don’t both have to agree always. Often a difference in opinion can make for a happier marriage. Opposites attract. While you push for saving for tomorrow, your partner pulls for enjoying life today! Together you can come to a compromise that enriches both of your lives. However, both of you need to achieve an understanding of money.

Joint Accounts? First of all, if both of you are financially responsible, then opt for joint accounts. In the beginning, you may retain your old individual accounts, but you will soon realize that joint accounts make things easier and you can move on to more important things, especially if you have children. However, if you’re the saver and your spouse is the shopaholic, then the more financially responsible person should manage the household finances, even if the other earns more. Remember, it’s not what you make; it’s what you save. The shopaholic may need to heed to a budget or allowance and, although it can be painful, it’s the only chance to build family wealth and provide for your children. The shopaholic may win the battle sometimes, but, overall, the finances are run prudently.

Key Point: To achieve financial success, you don’t need to change the other person (and you probably won’t). It would be best if you came to an understanding that, for the better of your family, the money is best run this way. The shopaholic must relinquish control of the family budget, and the saver should “have a little fun” occasionally too.

Communicate. You’ve heard this many times. It’s about communication. Hopefully, you can discuss money before you get married. However, if not, perhaps this article will encourage you to broach the subject; perhaps after Valentine’s Day dinner.