The reason why money is the first issue we're going to address is that it's generally the number one reason why couples break up. It seems incredible that financial problems could override love and commitment and lead to a relationship's failure, but it happens all the time.
So it's time to systematically look at the main hurdles that arise when you struggle with money management. But first, let's briefly explore the psychology of money to understand why finances are such a sensitive and explosive subject for couples to face.
What Money Means to Us
For most of us, money is our gateway to the world: having it means that we feel secure; not having it makes us feel unhappy, like we're failures. And if you've ever heard of the "Golden Rule of Relationships" (he with the most gold makes the rules), then you know that cash can equal power in relationships, Think about these questions:
- Who will handle your money?
- How will you spend your money?
- How will you deal with unexpected changes in your finances?
- Are you afraid that at any time your money could be taken away and that you'll go broke?
- Does the breadwinner get to set all the relationship rules?
The Solutions to Your Money Problems
I'll present a problem and then offer a solution for you to consider. And for each topic, I'll discuss what I feel are the main areas that can blow a relationship apart if not worked through by you and your partner.
I know that some of you may complain, "Well, he didn't talk about ___, and that's a huge problem for us!" Just understand that no blog can cover every single problem that could possibly arise, l believe that the areas l present to you here are the most critical issues that arise in relationships.
What we tackled previously can be applied to each of these posts. That is, you and your partner should first be able to identify your problem spots and then try to compromise on a solution. Sure, it sounds really simple, but most couples lose their focus when things heat up, and then the problem has little chance of actually getting resolved.
So, let's make money management a lot easier and more organized.
Problem # 1: Accounting
Most couples I know have some difficulty deciding who's going to keep track of the bills and expenditures and balance the checkbook. Now these tasks certainly aren't glamorous - in fact, they're downright tedious. That's why many of us avoid it like the plague. But somebody has to be the designated accountant; otherwise, your finances will be a total mess. So who's going to do it?
Solution #1
You both need to sit down and designate one person to keep track of all the money that comes in and goes out of your household. This doesn't mean that this person gets to unilaterally decide all money matters - this is just a bookkeeping function. So who's more organized, you or your partner? (This is a critical decision, so be honest.)
Once you've decided on the money manager, the other person must agree to faithfully give all receipts and records of money spent to the banker. I sure used to be guilty of violating this little rule. I'd go to the ATM, withdraw some money, and then forget to give the record to my wife (our designated banker). Of course, this behavior caused us to be off by many dollars when Betsy balanced our checkbook. Boy, was she was mad ... and she had every right to be, because I made her job more difficult. (Thankfully, I've been trained now.)
The other side to this coin is that the banker must be open about the accounts at all times. The nonbanker should be able to see the checkbook and bank statements at any point. This minimizes the risk that someone will go crazy and spend all of the money. This leads us to our next topic for discussion.
Problem #2: Spending
Recently; a friend of mine went to buy a new car. She was shocked when the salesperson told her that she had a low credit rating, and therefore wouldn't be able to qualify for a low percentage rate. My friend became infuriated and called the credit bureau to see how this could be - she was under the impression that she had very good credit. The bureau told her that she and her husband had several credit cards that were maxed out ... which my friend knew nothing about. How To Have Successful Marriage
That's when her husband confessed that the charges were correct. Unbeknownst to his wife, this man had opened several charge accounts and had secretly been paying off the balances. This amounted to several thousand dollars' worth of purchases, which helped amass their debt.
You may wonder how this could happen. Didn't the wife see the monthly statements arriving in the mail? Well, her husband was able to fool her because he'd had the bills sent to a post office box and had sneaked small sums of money out of their checking account each month to make the minimum payments. But the result of his behavior was their near financial ruin.
This case illustrates the fact that your partner may sometimes spend money without asking you first. Hopefully it won't be as extreme as the example above, but people occasionally spend money first and ask questions later.
I go out for lunch a few times a week and don't call my wife to ask for permission first; she buys the groceries and doesn't ask me how much she's allowed to spend. Expenditures like these are usually not the problem areas.
However, if I went to the track and gambled away my paycheck or wasted our money drinking at the local bar every night, then this would obviously become a major problem. Likewise, if my wife went out and bought expensive items and then overdrew our bank account, this issue would need to be addressed.
You don't want to end up in the "poorhouse" because of frivolous spending habits, so give some thought to the next solution.
Solution #2
There needs to be absolute agreement on the following: Neither partner will ever open up a bank or credit card account without the other person's knowledge.
In addition, a spending limit must be defined and adhered to. This means that either partner will only be allowed to spend up to a predetermined amount on any purchase or activity - you and your partner need to define that now. Anything over that amount, even slightly, must first be discussed and approved by both of you. For example, if your set amount is $200, and a new DVD player costs $250, then you must decide together whether to buy it. (Of course, emergencies arise, but that's not what we're talking about here.)
If this rule is broken, then the offending partner will do whatever it takes to make things right. If that means returning the merchandise, taking a second job to pay off the debt, or closing all of the accounts ... then so be it. If you make the mess, you'd better be willing to clean it up.
If you find that spending has become an addiction, then you need to seek out professional help. There's always a psychological basis for out-of-control spending, and it should be addressed immediately. To learn more, you can check out How To Have Successful Marriage.
