How Married Couples Can Share Financial Management and Planning Responsibilities
Three steps toward building financial equality in your household
Creating financial equality is important for all married couples, not just those who argue about money or are experiencing financial difficulties. Learning to handle money together brings many benefits to any marriage. Money can certainly be a source of tension, but refusing to talk about it will only postpone, not prevent, conflict. Establishing equal footing in your family's finances can strengthen your relationship and ensure that you are both well-equipped to handle any obstacles that arise. Here are three steps for achieving this goal.
Get Your Accounts in Order
One great system for keeping financial peace in your household is to keep your money in three separate accounts: a personal one for each partner and a household account. Suze Orman, expert financial advisor, suggests, "Once you've determined the total cost of your shared living expenses, both of you should contribute your portion of these costs to the joint account each month, based on your share of household income." Note that she recommends contributing proportionally to income, so if one partner makes 80% of the total income, that person will contribute 80% of the funds needed for the household account.
Maintaining a sense of individual empowerment is also an important piece of the financial puzzle. Money remaining after the household fund is taken care of should be split into the individual accounts. Jonathan Rich, PhD, psychologist and author of The Couple's Guide to Love & Money, stresses that this should be an equal split, explaining, "It's a joint venture, and so you need to think of yourselves as contributing and benefiting equally."
Establish Individual Credit
Aside from individual spending accounts, each partner needs to establish his or her own credit. If this is not already the case, you and your spouse should each open a card with just your name on it. Establishing individual credit protects you both in the case of divorce or death and can be a necessary part of receiving a loan or even passing a credit check for a job.
Communicate as Equals and Minimize Conflict
Fear of conflict can inhibit willingness to discuss money matters. According to Dr. Rich, the three main sources of conflict are as follows: thriftiness vs. extravagance, willingness to accept or give out financial help, and risky vs. conservative spending preferences. These sources of tension can be surmounted by understanding that a different spending style from your own is not a personal affront and by working to make financial decisions together. Identifying shared financial goals is one way to bridge different spending styles and foster a good financial relationship.
Suze Orman emphasizes the importance of communicating and managing finances as equals, stating, "Who makes what is irrelevant. Do you hear me, stay-at-home moms? The size of your paycheck does not determine your role in the family finances." Make sure you and your partner have an equal say in financial decisions. Creating a family budget together is a great way to work toward this goal.