Admit it: You and your spouse have had a fight about money. How did we guess? “Money is one of the top three things people fight about,” says Anne Brennan Malec, the founder and owner of Symmetry Counseling in Chicago, and a clinical psychologist who specializes in financial therapy.
The origins of money fights are often clashes of spending personalities. Maybe one of you is a saver, either by habit or instinct, who forgets that life for is not just about reaching a number on a balance sheet? Maybe your better half is a spender, who puts fun before frugality? Even if he values savings as well, building a rainy day fund may fall a little bit farther down on his priorities list. “With spenders and savers who form a relationship, at some point there’s likely going to be some conflict,” says Malec.
Fear not, because the relationship isn’t doomed. “People can change and people do change,” she says. The most important change will be figuring out how to work together as a team, instead of as individuals.
So how do a spender and a saver create a happy partnership?
Define Your Five Healthy Financial Habits
If there’s a recipe for (fingers crossed) fighting less about money, this may well be it. “Across the income spectrum, couples who do these things have happier and more rewarding marriages,” says Malec. “Because if there’s no conflict about money, there’s reduced conflict overall.”
First, you’ll need to make a list of the habits you want to accomplish. This list of five is a good place to start, but tweak it as you see fit:
1. Create a budget and live within it.
2. Pay off your credit cards every month.
3. Have adequate insurance for your home and possessions.
4. Build an emergency fund covering three to six months of expenses. (Put it in a high yield savings account and watch it grow on its own.)
5. Save for retirement.
Set a Money Date
So how do you start hitting these goals—and others that you and your partner may want to set, such as getting the kids through school or buying a new car or second home? It all starts with a conversation (and ideally regular conversations) about your shared finances.
Malec recommends a monthly date where you discuss everything having to do with your money. Talk about your bills, your disposable income, your investments and your debts. Figure out your strategy for living by your five healthy financial habits. Create savings (or debt payback) goals together, ranking them in order of importance, and start working on them together. The key is that you should agree up front on where your money is going.
Create a Personal Monthly Budget
Each partner should have their own discretionary money to play with each month. Where does that money come from? It’s budgeted for, of course! In that way, the saver can feel that the financial goals are being met, and the spender doesn’t feel they are being watched and judged for every purchase. Whether you buy yourself a fancy pair of shoes or take your friend to a three-star restaurant for lunch, it’s coming out of your personal monthly budget—no questions asked.
Decide on your spending limit. Set an expectation that larger purchases have to be agreed on together, so they don’t impair your ability to meet your shared goals. Whether the right cap for the two of you is $100 or $1,000 will depend on your budget. “It’s only respectful if you’re spending each other’s money,” says Malec.
Work Backwards
The aim is that the two of you can work together to build a financial foundation that includes both living well and planning for the future. If during your conversations, you find that the saver’s need for security is endlessly conflicting with the spender’s prioritization of experiences or things, try the following exercise to align your priorities.
Using online retirement calculators, such as the ones you can find on the Social Security website or MoneyChimp, determine the sum you need to fund your retirement. Then work backwards to figure out what you need to save every year to reach that figure. “I have found that to be that can be very centering for people,” says Malec. “For worriers, the exercise offers reassurance—while others panic. It gets a couple focused on what they have to do and the hard choices to make.”
Don’t Be Your Partner’s Money Manager
The critical point about that exercise, again, is that the two of you are doing it together. You have the same goals, you’ve set the budget together and you both know what you’re working toward. Both partners, therefore, have equal responsibility for and authority over your money. “You should both know what you can afford to do,” Malec says.
That way you avoid a parental-style relationship where one partner has to approve the other’s spending. Or where one partner feels pressure to find ways to make the budget work to give the other everything he or she wants. Or, worst of all, where one of you resorts to secret spending—and then lying about it.
Bring in the Experts
If the two of you can’t seem to agree, go see a financial planner or a counselor to help you mediate. Money is such a big deal in relationships, it’s certainly worth the expense to have a pro advising you. Even if you’re not having issues around money, think about bringing in some outside perspective. It can be helpful and constructive to develop a joint approach to money before there’s a conflict.
Of course, even with good practices in place, you and your partner may still have tiffs about money. But those differences of opinion will be happening in a context of mutual respect and shared goals. And that makes them much easier to work out.
Tim Mullaney is a New York-based financial writer whose work has appeared in BusinessWeek, The New York Times, USA Today, The Washington Post magazine and many others.
Communication is key for a healthy relationship—and healthy finances. Read more about how to talk with your partner about money.