How to Talk With Your Spouse About Money

Money can be a highly sensitive issue for many couples, and it is important to have an idea of how to approach any serious discussion with your partner regarding it. Whether the two of you have more than enough money or if money is tight, it is inevitable that at some point, money is going to become a topic of discussion within your relationship.

The trick is to keep it at the “discussion” level, and not allow things to escalate into a heated, emotional argument. Nobody wants to walk away feeling angry or hurt after the subject of money has been raised – so how best to avoid the minefield that can be the territory of talking about money with your spouse? Let’s take a closer look.

Let's Talk About Money

Scheduling a talk with your spouse about money may seem awkward, but it’s actually a good idea. Choose a time when you will both be free from distraction, so that you can properly focus upon your financial future together.

Begin by focusing on goals – where the two of you would like to be financially in five years, ten years, and when you would each like to retire. What are your dreams? How wealthy would you like to become – or how wealthy do you each need to become? Should one spouse have more control over money than the other?

Should you have individual checking, savings and investment accounts, joint accounts – or some of both? Do you want to own real estate, and if so – within how many years?

When you think of retirement, what does it look like? How will you fund your children’s college educations? These are only some of the questions that can arise, and they require time and thought to answer. In fact, it can make sense to prepare ahead of time with written notes or a letter to your spouse that each can read before and after your scheduled money discussion.

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Marriage is a Partnership

This may sound a little businesslike, or it may sound obvious, and it may not sound romantic or sexy – but it’s true. Marriage is a partnership. You and your spouse may not agree on everything – but you’ve got enough going for you that you chose to get married and plan to stay together for life. The two of you are there to support one another and build a life together.

Therefore, when you talk about money together, it is ok to recognize differences between the two of you and where one or both of you have made mistakes in the past regarding money.

If one of you has overspent or fallen into too much credit card debt, discuss ways to prevent this from ever happening again. Maybe one spouse is more careful and saves more than the other who has a tendency to overspend. Discuss how the more careful spouse can respectfully oversee certain spending activities without insulting the other spouse.

Try to understand what went wrong in the past and why overspending occurred in the first place. Agree that neither of you wants to live beyond your means again, and approach the process of thoughtfully creating a written monthly budget that itemizes all sources of cash flow and expenses.

The 50/30/20 Budget

For example, the 50/30/20 budget approach is a good place to start in devising a written monthly budget that will account for necessities, “wants,” savings, and any debt repayment.

Under the 50/30/20 budget approach, 50% of monthly after-tax income gets allocated to necessary expenses (housing, food, transportation, utility bills, etc.), 30% gets allocated to “wants” (restaurant meals, entertainment, weekend getaways) and 20% gets allocated to savings and debt repayment.

Importantly, if necessary expenses are greater than 50% of disposable monthly income, any shortfall must impact the “wants” category – no matter what, 20% of monthly disposable income must be allocated toward savings and debt repayment. Regardless of whether you adopt the 50/30/20 budget or not, make it a point to discuss monthly budgeting with your spouse.

Clear Goals

It is important for the two of you as a couple to have clear financial goals and a realistic plan with which to attain them. Agree on what your goals are – whether it’s to pay off credit card debt, finish paying off a mortgage, how to plan financially for having children, how to finance college educations, what to look forward to when the kids move out of the house, or anything else – regardless of your respective stages in life – get clear on your goals and plan for them accordingly.

When you have clear short and long-term goals (such as getting out of debt and/or financing the purchase of a home), it becomes easier to control spending and plan around these goals on an ongoing daily/weekly and monthly basis. Never blow up at your spouse if he or she overspends – instead, carefully and respectfully note the missteps and treat them as mistakes that are fixable and should not be repeated.

You each should be prepared to sacrifice to meet your shared financial goals, and when initiating the conversation about money, think ahead as to what specific sacrifices you are prepared to make to meet your goals. It can be as simple as eating out less frequently and cutting back on regular trips to the coffee shop, for example. Remember that adhering to a clear, written monthly budget will make this process easier.

Rinse and Repeat

Don’t make your money discussion a one-time event – check in at least once a month together on finances – and monitor how you’re both doing with your written monthly budget and longer-term goals.

If your budget requires tweaking, take the necessary steps to reduce expenses or possibly bolster after-tax income. Always think in terms of “we” and “us,” as you and your spouse are in this together.

Look for what each partner can do to make your shared financial situation better. And don’t allow finances to become an overriding theme in your relationship – always remember what brought the two of you together in the first place, and use finances constructively to plan for a secure and happy life together.

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About The Author: Steven Brachman

Steven Brachman is the lead content provider for UnitedSettlement.com. A graduate of the University of Michigan with a B.A. in Economics, Steven spent several years as a registered representative in the securities industry before moving on to equity research and trading. He is also an experienced test-prep professional and admissions consultant to aspiring graduate business school students. In his spare time, Steven enjoys writing, reading, travel, music and fantasy sports.