Nothing can raise the stress levels like discussing family finances according to the American Institute of CPAs (AICPA). Discussing the family finances causes more arguments between couples – 3 per month on average – than any other topic.
So what causes most arguments about finances? The majority of couples state that misunderstandings between needs versus wants are at the root of most disagreements. Other areas of conflict include not saving enough and unplanned expenses. Before we get to far we need to distinguish between healthy disagreements and potential relationship ending conflict. Every couple is going to have disagreements over family finances from time to time however, if you find that you are having arguments over the same financial issues several times a month, you need to resolve the source of the conflict. Repeated conflict can lead to resentment and mistrust and can weaken relationships. So what can be done to avoid conflict and keep the family in family finances?
1. Work Towards a Shared Financial Vision
Having a shared vision for how financial decisions are made is probably the most important factor in avoiding disagreements. It’s a good idea to discuss the topics of retirement, debt, and spending early on in your relationship and create a roadmap together on how you are going to handle finances.
2. Agree on Spending Limits
If one spouse is a spender and the other spouse is a saver there are bound to be problems. An easy workaround is to set spending limits that require approval by both spouses. By agreeing ahead of time on spending limits, conflicts should be few and far between. This doesn’t mean that you won’t have disagreements from time to time but the disagreements should be infrequent if you are abiding by the spending goals. Be sure to set realistic spending limits by looking at past history and include a buffer for unexpected expenses. Remember, the goal is to end up with spending limits that enable you and your family to have a comfortable lifestyle without creating unrealistic expectations.
3. Be Open about Your Purchases
If you make a purchase without consulting your partner then the best course of action is to come clean immediately and talk openly about it. By admitting your mistake to your partner you are accepting responsibility for your actions. The next step is to take action to fix your mistake. Replace the money that you spent by making an additional deposit from your funds and work to rebuild any trust that may have been damaged. Hiding your purchases from your mate will only lead to conflict and a lack of trust.
4. Talk Often About Finances
It may seem counterintuitive but talking about family finances often can help to resolve issues before they become bigger ones. Ignoring your partner’s concerns regarding the family finances can lead to resentment and frustration and lead to heated arguments. Instead, plan a time where finances are discussed in a non-threatening environment with clear behavior expectations. Allow each person to share their thoughts and concerns openly without commenting and be willing to compromise so that no issue is left unresolved.
Readers: Have you ever had a disagreement regarding finances? Were you able to resolve the issue?
Anyone who’s married and says they’ve never had a disagreement over money is probably lying. Either that, or they’ve never actually talked about money with their spouse.
Unfortunately you are right Edward. Finances are at the top of the list!
I wont lie, we fight, and thats a lot of fight, good tips!
All of these tips are great! Especially No. 1 – you both have to buy into what the goal is. Setting the limits are okay, but this is where me and the Mrs usually disagree …
Without question, it’s the most important factor in any relationship.
I have faced this issue while discussing finances with my spouse. This article should help.
Disagreements about finances? Huge! But with us it is more about our fundamental relationship with money and attitude to debt rather than the stuff at the surface. Working through it gradually and hoping to get there some day soon.
Tricky subject — it’s sometimes hard to get on the same page about needs vs wants, but I’d argue that sometimes it’s more important to value the other person’s wants rather than completely disregarding them. Men won’t understand handbags and women won’t understand power tools or whatever — but they’ll all agree that paying the mortgage is more important than either one of those!
When I was married, finances were a HUGE source of problems and arguments. Mostly because I realized things needed to change and my ex wasn’t there yet. Actually he still isn’t, but that’s another story.
I really encourage people to talk about financial issues before they get married – and really even before they’re even close to getting married. Not necessarily all the details, but enough about each person’s philosophy to make sure they won’t spend all their time clashing over how much to spend or save.
I have to agree with this. Talking about finances before getting married especially regarding debts can avoid future conflicts. Being open minded is also important in a relationship.
Can’t agree with you more. Waiting to discuss important issues like finances until after you are married is not a good idea.
Sounds like communication is the key to financial happiness in a family.
We’ve been together for over 10 years and haven’t had an argument about anything, let alone money. We pretty much do the things you mentioned, but we’re really good about compromising and communicating. Great tips, Paul.
I don’t know what to say Jen except that you should write a book ASAP!
It’s always common to have conflicts on some issues. Compromising and better communication will always helps in reducing those conflicts.
Well said Neel! Compromise and better communication can be the key to solving financial issues between couples.
Do you think that having joint finances helps financial discussions in relationships, or do you think that maintaining individual accounts is the better way? My wife and I have always had joint finances and it works great for us, but we feel like we’re in the minority. We are blissfully similar in our spending habits, however, which helps a lot.
That is obviously an individual choice but I think a joint account for joint expenses can work well if there are clear expectations and agreement on how to share expenses.
Joint bank accounts for partners as it saves on bank charges
It’s all about TRUST