Most people know that the number one cause of divorce, or just marriage hardship in general comes down to money. It doesn’t have to be this way if you can each take a moment to understand the other persons point of view and what makes them “tick” when it comes to spending, overspending, and saving. Let’s keep it simple for now, and as a couple decide first what is most important by drawing a line down the middle of the page and writing your priorities (house, car, kids college) and then the things you WANT versus the basic necessities.
Compare your lists and settle on the top 5-10 things you have in common. Bingo! Now you have a new joint account. In that account you will both put money into it monthly, either the same flat amount, or different amounts if you income varies significantly, or you have a one paycheck household.
The money goes into the account and those 5-10 bills are paid. Of course that will include mortgage or rent and basic utilities, so if your list extends to more than 10 things, then go with it.
Ok, now let’s go to the fun stuff like travel, toys, and luxuries. My theory is that if you can afford those things, then you can afford to SAVE in equal proportion.
I like the idea of keeping money separate outside of the joint account so that each of you can have some fun money and don’t have to feel bad about how you spend it. My experience is that when couples argue about the other spouses luxury spending that the real problem is that they don’t feel the other person is contributing fairly to the bills and investments.
Think about it! If you felt like your spouse was contributing fairly to the bills and investments, would you really care if your husband bought a gun or your wife but an expensive pair of Christian Louboutin shoes? I’ve done this in my own marriage and with clients and it has been hugely successful.
What this means is that you have a second account and an investment account (don’t worry, you can still keep this simple) and you agree that whenever you come into a lump sum, no matter how big or small, that you divide that extra money into the two accounts.
That way you are saving as much as your are spending on the luxury items that we all want. I think it’s important to have fun and enjoy the finer things in life, but it’s equally important that we save for emergencies and for our future.
I am a strong proponent for living in the present but still planning for the future. I also believe that it’s important to circulate money and wealth and on an energetic level, it’s necessary to keep it moving throughout our society.
That is why when the economy has been at its worst, the governments, both Republican and Democrat tend to give some type of minor refund. Think back to the Economic Stimulus Act of 2008 where even a $300-600 bonus caused people to go out and start spending!
It doesn’t take as much as you think to circulate wealth, and you don’t have to be “wealthy” to be a part of it. It doesn’t matter what charity you give to, or even if you just help out a friend in need. What matters is that you do something that involves giving without any expectation of return.
Back to your spouse, you will be happily surprised at how easy it is to compare your notes, set up these three accounts, agree to some basic terms, and then spend your luxury balance however you choose without family drama and conflict.
Most of all, it doesn’t matter what your income is, because this is a universal problem at all income levels. I work with clients and couples with a wide range of income, and the problems are always the same. More money does not give you financial freedom. That freedom comes from a simple act of balancing your spending.
Have a great week!