You’ve been careful about money all your life: you’ve paid off your debt, paid yourself first, and amassed sizable savings while doing it. But your spouse is another story. He or she lives for the moment, thinks nothing of buying a $4 coffee or a $10 lunch every day, loves to appear generous by always treating friends and family to dinner, or maybe even has significant credit card debt. What can you do to get your finances in sync?
The bad news is that couples’ money habits tend to polarize after they’ve been together for a while. The spender continues to spend, which makes the saver more intent on saving—and this, in turn, makes the spender even more frantic to spend. It’s a vicious cycle. And that old cliché about how financial issues are often the biggest reason couples separate isn’t helping.
The good news is that a spender and a saver can find happiness together—all it takes is a little discipline and compromise on both ends. Below are a few tips for finding equilibrium in a financially unbalanced relationship.
Tips for Finding Financial Balance
Be kind. This is the building block of all discussions you have with your spouse about money. Chances are, as the saver, you’re proud of your habits and feel like you’re the one who has it together—while your spouse doesn’t. However, this attitude will only make your spouse defensive and less willing to change. Instead of accusing and issuing ultimatums, make your spouse understand that you love them and are trying to help.
If money is a particularly emotional issue between you, sit down with your spouse and have a general discussion about finances. Ask your spouse what money means to them—and how they want to feel about money in the next ten or twenty years. See if you can come to some common ground. Once you’ve bypassed the emotional pitfalls, look logically at your spouse’s spending habits, debt, and household expenses. Help them see how much that daily $4 cup of coffee will cost over the course of a year.
Have a joint account for bills and individual accounts for “whatever.” This is one of the most successful ways to manage finances in spender/saver relationships. Open one account in both names. Add up all your bills for each month, including food, utilities, rent or mortgage, school loans, and credit card bills. Add maybe $100 or so more for discretionary spending, then split it in half. That’s the amount each of you will contribute to the joint account every month, rain or shine. If one partner has significantly more debt than the other, you may want to adjust the split accordingly.
The rest of your paycheck can go into your individual accounts, and you can both spend it however you wish. So, if you want to save it all for a dream vacation, that’s fine. And if your spouse wants to blow it every month, that’s fine too—because your bills are paid.
Set a spending limit for the joint account. Naturally, you’ll want to be careful with your shared-expense money. Chances are, both of you will sometimes make purchases for the house out of that account. Pick an amount that neither of you is allowed to go over without discussing it first. Frame it as mutual accountability—both of you should have to check with each other. It’s not about who’s more or less responsible with money, but about working together.
Get that debt under control. If your spouse has significant debt, they may need extra help in getting it paid off. Encourage your spouse to talk to a credit counselor if they’re unwilling to sit down with you, add up all the debt, and work out a budget. Under most state laws, your spouse’s debt is your debt, and it could affect your credit.
If the problem is serious, see a lawyer. If your spouse refuses to change—or doesn’t change despite repeated promises—you may have a larger issue than you can handle on your own. Spending can be an addiction for some people and may require counseling. In the meantime, your spouse’s credit is your credit—especially if you live in a community-property state. These states include California, New Mexico, Idaho, Arizona, Louisiana, Texas, Wisconsin, and Washington. In these states, couples share all debts accumulated after marriage. You may need to talk to a lawyer to ensure your credit isn’t damaged.
You can help an overspending spouse rein in their spending habits—but you may need to become a little more flexible with money as well along the way. The most important thing is to build some spending flexibility into the budget you create with your spouse. That way, they’ll always have some freedom to spend and won’t feel trapped. Communication and patience are key to improving any marriage’s finances.
