Fact Sheets > Couples and Money Communication

Couples and Money Communication

One of the most commonly cited reasons for separation or divorce is money matters. Couples frequently quarrel over money issues after the “honeymoon period” is over, when they realise that they cannot survive on love alone, bread and butter is just as important, if not more important.

This is especially true in times of bad economy when job redundancy is so widespread. When money is plentiful, no one realises that their partner is such a spendthrift but when money is tight, the bad habit of spending money freely irritates and worries the other. One of the keys of maintaining your marriage is how couples communicate money issues to each other. Very often, money issues are seldom brought up until the couple gets into financial crisis or when they are dissolving the marriage. By then, it is either too late to salvage your financial standing or things have turned ugly over the division of assets. Money communication should ideally be opened as soon as the couple have thoughts of taking the marriage vows. Here’s how an open communication can be carried out:

1. Start by Talking.

How much do you understand your spouse's money philosophy? Money tends to define us in this society, there are many people who measure their self worth by their money and possessions. Both of you need to understand how each of you feel about money and how important it is to your self-esteem. How a partner chooses to spend money is often based on emotional baggage from childhood. If money was tight growing up, you may be more careful with your spending. If money flowed easily from your parents, you may spend more freely, often without thinking about the consequences of how to pay the bills. Understanding each other's money philosophy will provide you the foundation to work through your money differences throughout your marriage and avoid any financial crisis.

2. Discuss your dreams and goals.

Tell each other your plans even if it is something big such as your dream to start your own business. Or, perhaps you want to retire early and travel around the world or live in a beach or mountain house. Whatever your dreams and goals, be sure to talk about the role money will play in reaching these goals. Understand each other's goals and discuss how you will meet them together. It is important to be certain each person's needs will be met to the best of your financial ability. Finally develop a plan for meeting those goals you both can live with. Remember these plans should be revisited periodically throughout the marriage as goals and priorities change and mature.

3. Implementing your plan.

Decide how to implement your plan and who will be responsible for which steps. Discuss how you will handle everyday money matters such as who will be responsible for paying the bills and managing the joint accounts. Remember to meet monthly to review your finances. It is important that both of you understand your financial situation and fulfils his/her responsibilities.

4. Joint or separate savings and cheque accounts.

This involves not only financial decision; it is also an emotional decision. First thing to do is to find out the costs and benefits of pooling your resources with the various financial institutions. Very often, you can save on bank fees and get better interest rates by pooling your funds. But, if emotionally you feel more secure keeping things separate, then keep your account separate. Always be certain to determine an amount each of you can spend without consulting each other whether you decide to have shared or separate accounts.

5. Develop credit in each spouse's name.

It is important to maintain a good and separate credit rating. There will be more options if one of you gets into credit difficulties.

6. Revisit your goals frequently.

Personal goals change as one matures. Make sure you are on the same wavelength and that the investment choices you are making will allow you to meet each partner's individual goals as well as your joint goals.

7. Save for retirement separately.

Individual accounts should be started for each partner, check out any retirement savings package, and choose one that fits your retirement plan.