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.
What is most important is to set clear expectations about spending and be willing to discuss the issues in an open, honest, and safe setting.
Readers: Have you ever had a disagreement regarding finances? Were you able to resolve the issue?