How my Husband and I Approach our FinancesFeatured

FLW·Nov 03, 2020

Posted in:Family & Relationships Spotlights Money

As a career woman, I am often asked questions about my career journey, team building, leadership skills, and marketing. What I don’t get asked a lot but am very passionate about, is couples’ finances.I met my husband seven years ago through my business school roommate (yes, setups through friends totally work!). Fast forward three years later, he proposed and we were engaged.If you haven’t heard this enough by now, you know that money issues are one of the top reasons couples divorce. I had heard this so many times that by the time I was engaged, I was determined to make sure that was never a reason for us. For those of you who are dating, engaged, in a domestic partnership, or married, I want to share some personal tips on how my husband and I went through the process of managing our finances together:Tip #1: Have an open dialogue about both of your current financial situationsIf there’s anything you should take away from this, this is it. Before you say I do, make sure you are both aware of each other’s financial wellbeing. Allocate a couple of hours where you both sit down and lay it out all without judgment. Disclose your income, loans (student loans, car loans, mortgage payments), credit card debt, monthly spending habit, and retirement accounts. Then, address any concerns or questions you each may have. Is there a reason you spend more than you make? Why are there missed payments? Are you individually aware of how much you spend per month or is this the first time you’ve even looked at it? This conversation could be uncomfortable for both of you and it could lead to many disagreements and fights, but it is an important one to have and it will lead to marital bliss down the line.Tip #2: Discuss how finances should be managed togetherLiving together before marriage helped my husband and I to learn of each other’s spending habits (along with living habits – like realizing I’m the messy one). But it wasn’t until after we were married that we felt more comfortable “butting in” on each other’s financial business. Prior to marriage, we had separate bank accounts and split joint expenses – I paid for my student loans and he bought whatever shoes he wanted. There was never an argument as long as we were paying our half of the bills.After we sat down and disclosed our financials, we started to discuss different options of how to manage our finances: do we join our income, keep our income separate, or do a combination of both? After weighing the pros and cons, including a discussion on prenups, we went with a combination. We chose to have our income in a joint account but each month, we would transfer a small allowance to each of our individual accounts. Because our spending habits weren’t insanely different, we felt comfortable integrating our finances together. However, we wanted some sort of personal allowance so that when we had spending disagreements, we were able to spend it through our personal accounts. For example, if my husband wanted to buy an expensive pair of shoes that I may not agree with or if he wanted to buy me a birthday gift, he could pay for it from his personal account without checking for approval or ruining the surprise.Obviously, every couple is different and there isn’t an option that’s right. Most of my friends do it a different way and what’s important is for you and your partner to agree on how to best handle your finances in advance. At the end of the day, you both need to agree on a solution where neither of you feel pressured or controlled by one other but at the same time, can hold each other accountable so finances doesn’t become the burden of your relationship.Tip #3: Develop a monthly budget with your income and expenses in mindWhether married or not, joint finances or not, I highly recommend a budgeting exercise for yourself or with your significant other. As a couple, we use Mint to monitor our monthly spend and Personal Capital to track our combined net worth. We linked our accounts to both tools and started monitoring our monthly spend by category. The results were eye opening – as a New Yorker, low and behold, the amount we spend on dining out, rent, and travel was absurd. After having three months of joint data in Mint, we then did two exercises together:In a spreadsheet, we entered all of our fixed expenses (rent, insurance, loans, electricity and phone bills) to understand what expenses to expect on a regular basis and assess if we could cut these down. For example, we joined our phone plan to save on bills.Using a budgeting app, we took a look at how much we typically spent per category (dining out, travel, shopping, health, charitable donations, etc), and tried to set a budget that was realistic but not restraining. From this exercise, we cut our eating out budget with a goal of eating out no more than twice a week. But we then increased our groceries budget a bit because we had to compensate for eating out less and cooking more.(As a starting point for budgeting, I’d suggest using the 50/30/20 rule: https://blog.mint.com/saving/how-to-budget/.)Another thing my husband and I do that our friends joke about is when we first joined our accounts, we would have monthly finance meetings where we block off an hour a month on our calendars. Every Saturday on the first of the month, we would sit down and take a look at our accounts. We would use this time to chat through which categories we are overspending so that we were aware of what habits needed to improve going into the next month. This was such a healthy exercise for our marriage – it helped us to develop great spending habits on top of building our communication skills with each other.Tip #4: Save and invest for early retirementThe exciting part of personal finances is planning for early retirement. The idea of working not because you are struggling to make ends meet sounded fantastic.Once your monthly spend is in a good spot, start to maximize all your retirement accounts – 401K, IRA, HSA, etc. On top of that, you should start to build a healthy three to six months’ emergency fund. And as your cash inflows grow, you and your partner can start to invest additional income in taxable accounts, college 529s, and more.Now that my husband and I are saving and investing, talking about finances is actually really fun for us. We talk about the stocks we want to buy, we imagine an early retirement where we can travel comfortably, we dream of buying a place we can call home, and much more. Tip #5: Reassess your goals once a year and educate yourself through booksThree years into our marriage and a lot of hard work on our finances, my husband and I no longer have our formal monthly finances meetings (although we still have a placeholder on our calendars). Overtime, it’s been included in our conversations during our walks together and we are fully aware of how we spend our money.However, at the end of each year, we do sit down and readjust our monthly budget for the following year because of life changes – new jobs, rent increases, health issues, etc. We also look through our fixed and variable expenses to find ways to continually cut down on it: do we still need all the monthly subscriptions we have? Finally, we look at our combined net worth and assess if we are on track to retire at 55.Separately, my husband and I both read quite a bit of personal finance and investing books throughout the years (him more than me now). Some easy-reading books that really jump started my passion with personal finance that I would recommend to this group are the following:• The Money Book for the Young, Fabulous & Broke by Suze Orman• The Millionaire Next Door by Dr. Thomas Stanley• The White Coat Investor by Dr. James DahleNo marriage is perfect, and my husband and I continue to argue about finances every once in a while. But a transparent conversation early on in our relationship really helped us to feel comfortable addressing concerns and differences as they arise. If this post has intrigued you, I’d love to hear how other couples manage their finances or answer any questions you may have!

aprilfrancis·Nov 03, 2020

Beautiful post. Great advice. Thanks for sharing with the community.

americaturner·Nov 03, 2020

@FLW thank you for sharing! My husband and I started an “emergency savings account” during this pandemic and have started listening to finance podcasts such as Talk Money etc. I find that goals and saving accounts are great things to have in marriage!

FLW·Nov 06, 2020

@americaturner That’s amazing to hear — I love hearing stuff like this! Yes, given the current pandemic, it is so important to build up that emergency savings account. After the pandemic, I’d highly recommend to not touch that account so that it remains as your emergency fund. Once you save enough, start to then put money towards maximizing your 401k, Roth IRA (or back door IRA), paying off loans etc. don’t stop saving!Embarrassed to say, but I don’t listen to too many podcasts but will definitely check out Talk Money — thank you!! It’s something I need to develop better habits on 😳.

HannahPandolph·Nov 03, 2020

Great post! My husband and I basically do the same as you. When we first got married, I made significantly less than my husband. We would argue about finances a lot. There was a lot of guilt and shame that I was holding on to because I didn't make as much. I constantly worried about spending money, and I was annoyed when my husband was carelessly spending money. This was my own baggage that I had around finances and, probably, control issues. We've always openly talked about finances, but that guilt and shame really made it hard for me to ask my husband to curb his spending tendencies. A few years ago our salaries began to match. That's when we set up our allowances. It was a game changer/stress reliever for me. This year, I re-evaluated our accounts and set up a real savings account and started heavily investing in our retirement plan. I love reading about personal finance (it helps with those control issues I mentioned 😊).

FLW·Nov 06, 2020

@HannahPandolph thank you for sharing! 100% agree. I felt the same guilt & shame because like you, I made less than my husband which makes it hard to feel that it’s my place to comment on his spending or justify some of my splurges. However, my husband was very empathetic and would constantly remind me that our money is joint and I shouldn’t think so much about “your money” vs “my money.” Part of our conversation on integrating our income together was just that — think of our income/finances as well and both playing a fair share into our spending habits. But that guilt/shame will never go away, and as our net worth grew closer overtime, it definitely help.But for others who have an income difference with their partner, work towards removing that guilt! It’s a conversation to have with your partner because you have to recognize that as long as one person makes more, it by default will force the “poorer” person to upgrade their lifestyle purely because your life is so integrated together once you’re married (or dating).

HannahBaldovino·Nov 03, 2020

Great advice here! Clear cut plans and action items. Super useful thanks for sharing!

mxtinahess·Nov 03, 2020

Thanks for sharing! Always interesting and helpful to see what others are doing :)

Yami·Nov 04, 2020

Thank you for sharing this FLW. Great insights

alimagg·Nov 04, 2020

Thank you so much for sharing! Such an important topic, and you provide such clear, tangible advice :)In building my product, an app for couples called Lovewick, the topics of money and navigating dual income household responsibilities came up all the time, so I actually have an entire "deck" of open-ended questions for couples to facilitate these kinds of conversations in a less threatening, more proactive way.Here are a few sample questions:1. Did your parents both work growing up? How has their dynamic influenced your perspective on work?2. What would you do with an extra $1000 to spend just on yourself?3. What does it mean for you to feel financially comfortable? Why do you think that is?4. How do you feel about lending money to family members? To friends?5. What is your ideal vision of retirement?I'm always seeking more feedback from a diversity of couples, so if this sounds at all interesting, would love folks to check out the product (available in US App Store, and in beta if abroad. Hoping to expand to Android sooner rather than later)www.lovewick.comThanks!

FLW·Nov 06, 2020

I love this!! 1, 3, 4, 5 are questions my husband and I have discussed about. The way your parents raised you have huge impact on what your spending & savings habits are. My parents live extremely frugal growing up and talked about savings & 401k our whole lives. I remember missing a couple of school lunches when I was young because I wanted to save my allowance to get rich😂 (hey, every dollar counts!). But now, my parents are able to enjoy retirement and seeing their hard work pay off really motivates me to also be on a good path to retirement. Granted, I do splurge here and there but my husband & I are on the same page in terms of what we need to do every year to save and be FAT FIRE.Separately, some other questions to talk about are: how much do you plan to pay for your future kids (would we pay 100% of their college and graduate tuition?), would you send your kids to public vs private schools, do either of you need to support your parents in the future, are your jobs stable, are you in a job with huge salary potential / steady income flow / unpredictable highs and lows / heavy on bonus?

alimagg·Nov 06, 2020

@FLW Yes, yes, yes! Love these follow up questions, and that anecdote about skipping school lunches -- thank you! It's incredible what norms around spending/saving we subconsciously pick up as we're growing up (based on parents, community we live in, media, etc.). What really strikes me is what the symbol of money means to a person vs. their partner. Is money security? Is it power and influence? Is it freedom? This depends so much on our past experiences and differences in the symbolism of money will likely manifest in so many conflicts downstream, if you aren't able to recognize and respect where your partner's underlying beliefs come from.Thank you for your reply :)

christinei·Nov 05, 2020

My husband lets me manage the finances. It works very well since I like numbers and budgets--we never argue about money since I take his needs into account when coming up with our monthly budget.

FLW·Nov 06, 2020

I love that! Today, my husband manages most of our finances. As long as you two are align on it and someone is ensuring financial success, that’s what matters.

amandahosang·Jan 31, 2022

THANK YOU SO MUCH FOR SHARING THIS! I appreciate it a lot. Recently got married and my husband and I are figuring out our finances. It is great hearing another couple's perspective on all this and some great actionable tips here!