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Managing money together as a couple can be one of the most stressful parts of a relationship. Everyone has their own ideas of how much to save and how much to spend, not to mention different priorities and different habits. So imagine how much more difficult it becomes when one partner is a classic “saver” and the other is a classic “spender”. How do you cope and manage your money together as a couple?
I consider myself fortunate to have found a partner who generally feels the same way I do about money, saving, and spending. And yet, my wife likes to spend a bit more money than I do, sometimes putting her in the spender role and me in the saver role. We always manage to work out any monetary disagreements with a quick conversation and a bit of time to think. One of the key things we’ve realized though is that it isn’t so much that she’s the spender and I’m the saver, but that we spend on different things.
When your money philosophies are not as close, you may need some more solid strategies. Here are my tips for couple money management when one is a saver and the other is a spender:
Schedule regular money meetings
My wife and I talk about money often, but we also have an established monthly “budget meeting”. Even if it’s uncomfortable to talk about money, and even if one person is doing all the tracking and daily management, it’s important to keep your partner in the loop. If both partners don’t know what’s going on, how can you expect both partners to work together?
Talk about your goals and priorities first
It’s easy to fight about excess shopping and spending, or the unwillingness to spend even a little bit. But when you talk about your goals and priorities, it can be easier to find common ground. When you’re both working toward the same thing, it’s easier to agree on how to get there. If you don’t have a destination in mind, then you may end up nowhere fast.
Set a budget or a “spending plan”
A good way to start is to list out the categories of expenses and for each person separately to prioritize them and then compare lists together. This can help to identify where the spending differences are and can lead to compromises that will avoid conflicts down the road. Build your budget together as a team and you will both be invested in sticking to it. A related step is tracking your expenses (either manually or using a program like Personal Capital) so that you can evaluate how you’re doing relative to your budget.
Establish wants versus needs
It’s easy to get tangled up in expenses that look like needs but are actually wants. For example, you need clothing, but you may want designer clothes purchased at high end retailers. Make sure you both know the difference and set up appropriate categories of spending.
Automate your savings
If your agreed-upon savings get transferred out of your checking account as soon as your pay is deposited, there won’t be a large balance of money in the account to tempt anyone.
Agree on some spending rules
Many couples have a spending threshold, in other words a dollar amount under which each partner can make purchases without consulting the other. Anything above that dollar amount requires a checking in at minimum, or a more thorough discussion. Every couple is different in how high or low their spending threshold is, but the important part is that you agree on it. One challenge with this plan is that smaller purchases can add up big time. Make sure you’re both working in the spirit of the agreement and not buying dozens of items under the limit because you can.
Another way of handling the issue is to each have fun money or allowances which can be spent however each person chooses. Once your monthly amount is gone, that’s it until next month. This not only helps to rein in a spender, but encourages a saver to do a little living for the moment. Just decide how you will separate this money out from your regular funds (like taking it out in cash or placing it in separate accounts).
Be honest and trust your partner
While this is good relationship advice in general, it’s important when it comes to money too. Financial infidelities can ruin a relationship almost as easily as a physical or emotional infidelity. The bottom line is about trust. So be honest with your partner and encourage them to be honest with you, even if it feels uncomfortable sometimes. That’s the best way to work as a team.
Slip-ups may happen. While it may be tempting to assign responsibility for your money problems to your partner, focus instead on how to improve the situation. Both of you need to commit to try, and then remember that your partner is trying. Positive reinforcement can go a long way.
Above all else, when you feel your emotions rising due to a financial issue, just remember this is the person you love. Treat them with respect and care, and expect the same from them in return. It is possible for a saver and a spender to live happily ever after…it just takes some communication and teamwork.
Do you consider yourself a saver or a spender? What about your partner? What ways have you found to work together on your couple money management?