Talking With Your Spouse About Money

Suzanna DeBaca -- Expert Business Source, 2/23/2007 6:17:00 AM

Do you and your spouse have different styles of money management or different opinions about finances?

No matter what industry you work in and no matter what your financial situation is, communicating with your spouse about money can be challenging. We all bring our own habits, issues and hang-ups about money into our relationships. If you are like many couples, it may take a little adjusting and a little give and take to find a way to blend money management styles.

Agreeing on financial basics, communicating regularly, and respecting each other’s choices are important factors in getting along in marital money management. If even approaching the subject of money is difficult, a financial advisor can be of help in creating a neutral environment to begin a discussion. Here are a few suggestions on how to begin.

1. Agree on Roles: Decide who pays the bills, who keeps the checking and savings accounts, and who manages the investing. If you give the other person authority to perform a function, give them the respect they deserve for doing it, even if you don’t agree with certain points.

2. Try to Minimize the Emotion: While money can be a loaded topic, try to think objectively and focus on facts.

3. Agree on the Priorities: For many families, the order of priorities starts with meeting fixed monthly expenses, such as the mortgage, rent, utilities, car payments or insurance. Next come variable but necessary expenses, such as groceries, clothing, and cell phones, to name a few. Last in line are usually the discretionary expenses, which are things like dining out, entertainment, or vacations. But you must decide for yourself the difference between needs and wants and agree on where certain expenses fit in. Is college savings more pressing than retirement savings? If you can both commit to the priorities, then you can fill in the discretionary expenses, both compromising a little if necessary.

4. Stay Informed: No matter how disinterested one party is, insist that they at least look at a report of each of those tasks quarterly. Too often, one spouse hands over responsibility for money management to the other and then wants to ignore it. As long as there are joint assets, both people must be informed, especially if there are kids involved. If something were to happen to the bill payer – even a temporary illness – it is important that the other spouse know where to find the right documents, computer program or accounting system to keep things up to date.

5. Compromise and Respect: If you have a set budget that allows for discretionary spending, each person in a relationship would do well to show respect for the other persons’ interests and spending desires. Just because you don’t like shopping for gardening supplies doesn’t mean that your spouse should be deprived of that enjoyment, just as you may like purchasing music and your spouse thinks CDs are a waste of money. Each person should have a certain amount of discretionary money to spend, however and whenever they chose as long as the amount fits into the overall picture.

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), 7 Hanover Square, New York, NY 10004, (888) 600-4667. Securities products/services and advisory services are offered through PAS, a registered broker/dealer and investment advisor. Private Capital Solutions Group is not an affiliate or subsidiary of PAS.

PAS is a member NASD, SIPC.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice.