DEAR DR. JENN,
My wife and I constantly argue about money. We have different ideas about reasonable ways to spend, save, and budget, and it creates tension in our day-to-day lives. I know it's a common problem, but how do we stop? —Mo Problems
DEAR MO PROBLEMS,
Statistically speaking, money conflicts are one of biggest harbingers of doom in a relationship. According to a Utah State University study, couples who reported disagreeing about finances once a week were over 30 percent more likely to get a divorce than those who reported disagreeing about money matters a few times a month.
The key to reducing financial conflict? Improving financial communication. Most couples only talk about money when there is already a problem. But when money's a problem, it's really hard to talk about. If you're waiting until then to open your books, you may be too late to avoid a fight.
There's a relatively simple solution, though not enough couples make use of it: Create a forum for these conversations to take place before there’s a problem and in a setting where there’s a beginning, middle, and end — so your tiff doesn’t turn into snide comments over every dollar spent. Let me introduce you to The Family Meeting. If you share finances, you should be having one, whether we’re talking cohabitating lovers, spouses, or a family of five. If you don’t want to call it a Family Meeting or Money Meeting, don’t, but having a regularly scheduled time to talk through joint decisions, especially with regard to money, is the best way to keep things clean.
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The Meeting Itself
The ideal money meeting should be kept short, no more than 15-20 minutes, so they’re effective and not a time suck. Try to hold them at the same time every week so you don’t need to put effort into scheduling, and ditch phones, computers, and TV for the duration. Keep a journal or Word doc where both of you can take notes, and set an agenda or list of topics before every meeting.
Yes, there should be rules. You can choose your own, but here are mine:
- Pick a leader. Each meeting has one leader. Alternate who is in that role.The leader chooses which item to begin with and in what order the agenda will be addressed.
- Discuss one topic at a time, and don’t move on until both of you feel satisfied with the result, working together to come up with goals, plans, and solutions. Both of you get a chance to share opinions and ideas, and all ideas — no matter how crazy they may seem to the other person — are considered. Write them down in the meeting journal/doc.
- Use this time to plan fun things, like vacations, outings, and charitable contributions. These meetings are a way to avoid and resolve conflict — but they don't need to be inherently the worst. They be a fun way to bring you together and work toward common goals.
- Decisions are reached by unanimous support, even if it is with hesitation.
- Take turns speaking, without interruption. (I’ve even done a talking-stick situation.)
- Unresolved issues. If you really cannot come to a mutually satisfactory compromise on one of your agenda items within the time limit of your meeting, agree to table it until next week and tackle it before moving onto any new items in your next meeting. If this repeatedly happens, seek outside counsel come to agreement.
- Set a structure, and follow it every time.
- Don’t sneak. Do not hide purchases from your partner. Lying or being shady about money destroys the trust in your relationship and teaches you to feel shame around your purchases, rather than owning up to them and feeling responsible and good about how you spend.
Agenda Items for Meeting #1
If you’ve never talked about finances with your partner before, it may seem like you’ve got a lot to discuss upfront. But many money issues are process-driven, meaning once you figure them out and put a process in place, you won't need to revisit them.
During your first meeting, you may need to tackle how to open a shared bank account and divide expenses. But by your twentieth, you may find that all that’s left to discuss is who'll keep track of receipts on the Eurotrip you successfully saved for. The length and “seriousness” of meetings will fluctuate; that’s fine. But if you’ve never talked money before, put these topics on your agenda, stat because they’re the ones I see couples fight about most.
1. Set a budget. And be reasonable, working in a cushion for both incidentals and enjoyment. Coming up with a budget that allows you both some fun but doesn’t leave you in debt will mean fewer arguments to begin with.
2. Set up 3 bank accounts for spending. The first is a joint account you both have access to, meant to cover all your regular home and individual expenses (groceries, rent/mortgage, medical, gas, and toiletries, but also clothes, dining out, and entertainment). The bulk of deposited money goes here. Figure out how much by looking at your expense history and make sure all bills would be covered and then some. Every duel-income couple also needs to figure out how much each person will contribute from their earnings. Some contribute equal sums, but that can get hairy if one partner outearns the other or has a ton of student loans. Many financial experts say the “fairest” arrangement has each person contributing an equal percentage of their income, after accounting for loan payments. Then you should each get an individual account for "play money” that you'll set aside each month, even if it’s a small amount. If one of you wants to get something frivolous using the money in that account, neither can complain.
3. Set a spending limit. A.k.a a predetermined number you agree on that requires you to consult the other if you’re buying an item above that threshold from your joint account. If it’s $300, and you want to celebrate your year-end bonus with a pair of $400 stilettos you've been lusting after, you must talk to your partner before making the purchase.
4. Choose a third party that you both respect to help you through tough financial conflicts. A neutral mediator who can help you sort through money arguments — such as an accountant, a business manager, or even a therapist, or financially savvy family member (though it can be hard to find a neutral one) — can go a long way toward keeping the peace if you can’t come to a compromise yourselves.
5. Set goals together. Having meaningful goals that you are both working toward can be intensely bonding. If you are both excited about a vacation or the buying a house, it makes it easier not to buy a new handbag or blow way too much on an expensive dinner in order to save up.
6. Find a tracking system that works for both of you. Whether it is QuickBooks, a financial app like Honeydue or Better Haves, or even old-school envelopes you store your receipts in, set up a system that allows you both to observe your money flow on a day-to-day basis. You don't want to be surprised to find out that you both made a pretty big purchase one week and used up your weekly entertainment budget before the weekend. Whatever system you use should allow you to update throughout the day.
7. Discuss money anxiety. It is important to share your history of triggers, fears, and baggage around money. Sometimes we have huge reactions to financial decisions or feedback from our partner that have very little to do with them or the situation at hand. Be open and honest about your unresolved financial issues, whether it's student debt or a parent who was withholding. It’s equally important to approach your partner’s money baggage with empathy and seek to understand why they behave and think the way they do. Knowing what your and your partner’s money hot buttons are can make a huge difference when it comes to avoiding conflict.