How Couples Can Eliminate The Stress of Money Management?

money management for couples

One of the first things I noticed as a young reporter learning to interview strangers was that it was a lot easier to get people to talk about their sex lives than about their money management problems.

After the initial surprise, it made a lot of sense. Money represents much more than implied by its dictionary definition as a medium of exchange. For starters, money pays for pleasures in addition to being required for survival. It’s a measure of how much society values our talents and our time. It can provide a sense of security and foster hope for the future.

With all this baggage, no wonder money can be difficult to talk about. And perhaps the most difficult is having this conversation with your long-term committed partner where, by definition, love and money meet. But the conversations need to happen. So, it’s critical to get beyond these financial challenges and mend the relationship by talking about finances with your partner. Here are a few suggestions to get rid of the tension and create harmony in your money management:

Couples Need to Start Talking Early

Don’t wait for an emergency – like when you’re facing a major car repair or the cost of bed bug treatments – to begin plotting your financial life together. The best time to start talking about money is when everything looks fine. Then make it a habit.

Money conversations often have two levels. The first level is emotional. That’s where you can discover the degree to which you and your partner differ. Some people, for example, are naturally frugal and like to save a lot. Others are keenly aware of the importance of enjoying life right now. Both matter. Finding a reasonable balance between conflicting goals is critical for both a healthy relationship and a sustainable financial life.

The second level of the money conversation is technical. What bills are coming up this month? Have there been any changes in your spending patterns? What are your incomes and investments? Are there any looming changes to those? Do you have any big plans on the horizon? Can you afford them?

Get the Facts and Write Them Down. It’s Critical to Good Money Management.

It’s relatively easy to develop a picture of fixed monthly expenses, such as rent or mortgage payments, utilities, food, car payments, insurance, credit card bills, and streaming and computer costs.

A far more difficult number to establish is the annual cost of home maintenance. One method is to put aside $1 for every square foot of living space. I like the 1% to 4% Rule of Thumb, which calculates annual home maintenance costs as a percentage of your home’s value. The older your home, the higher the percentage.

We got our 200-year-old farmhouse for a song in a market that has since exploded. When I did a few Rule-of-Thumb calculations, I found that the maintenance calculation was more accurate based on the house’s current assessed evaluation instead of the much lower purchase price. In essence, as with many couple’s money management decisions, it pays to tilt conservative.

Another fact to consider is credit card and other unsecured debt. You aren’t responsible for the debts your spouse or partner had when you began your relationship. Student loans, for example, are the responsibility of the person who took them. However, individual debts can impact a couple’s ability to pay joint expenses, so be sure to include them in your larger financial picture.

Now that you’ve outlined your expenses, write down your income from all sources.

Look for Financial Patterns and Spikes

Another key to successful money management is to create a spreadsheet, whether on paper or your computer. You can manually input monthly cash flow numbers or use a software program. Then look for weak spots and changes. Excessive internet and cell phone costs are often a problem area. Food costs have spiked, mostly because of inflation, but sometimes personal preferences contribute to the expense. (My personal weakness is delicious and increasingly expensive fresh-caught fish.) Either way, month-to-month tracking will help you adjust your choices or menus when spending starts to spiral.

One of the most important patterns to look at is your credit card debt. The lessons of the 2008-09 financial meltdown, when so many people got slammed by their credit card spending have been forgotten. Credit card debt is again at an all-time high — and both interest rates and delinquencies are increasing.

An increase in your household’s credit card debt is a red flag that something is out of balance and it’s time to take whatever action you can to pay it down. This is a top priority for both of you. Consider ways to increase funds for paying off the debt. Ideas can range from finding extra part-time jobs or gigs, selling items online or picking up extra cash through your unique skills (think tudoring, painting, handy man help etc.) When your debt is gone, don’t forget to celebrate — in a budget-appropriate way of course! Then use your freed-up spending power to build your nest egg.

Admit When You Need Help with Money Management

The mere facts involved in personal money management can be fuddling. There’s so much to consider. Secured debt, such as a mortgage, for example, carries a lower interest rate than the unsecured debt on a credit card. But that doesn’t make any difference when it comes to your all-important credit rating. Promotional balance transfers can lower your annual cost of credit card borrowing. But make sure you understand the hidden costs of transaction fees and the implications of carrying debt after the promotion runs out. Debt consolidation through a home equity loan can lower your interest liability, but it can also put your house at risk. 

For technical problems such as these, traditional credit counselors and debtor education programs can be a great help. But when two people and complex emotions are involved the job may feel overwhelming. That’s when a specialized budget coach who understands both the practical side of finances and the emotions involved can be of great help to bring calm and clarity to the complicated process of taming a family budget.

Frances Black is a writer and gardener living in a 200-year-old farmhouse. She was born in Michigan and has worked as an editor for the financial and economic press.