Money and budgeting seems to be at the top of many New Year’s plans. Finances can add stress to a relationship, but it’s obviously preferable that we know how to manage our finances before we are married, as well as have some sort of idea of how we want to share finances once we are married. What are some of your recommendations for planning your finances and budgeting your money now so that it will be less stressful down the road? Do you hope to share accounts with your spouse or have a yours/mine/ours system? How have you seen other couples manage their finances in a way that works well?
While money isn’t everything, it is certainly important to know how it works, how to manage it, how to save it, how to spend it (yes, that too), and how to share it. When I was single, I admit to not knowing much except, yes, contribute as much as I could afford to my employer’s 401K, save for a rainy day, and spend wisely and always within my means. I never drew up a budget, followed a program, or went beyond my comfort zone. But I did keep an eye on my ins and outs and never overdrafted my checking or carried a balance on a credit card. I do regret not learning more about advanced savings (investments beyond safe work programs or IRAs), but feel that the following fiscal habits helped me to now share finances with my husband, an experience nothing before would ever truly prepare you 100% for. Lots of financial advice centers around specific philosophies or advocates certain principles that you may not feel are appropriate for you, and you will want to keep doing it in a way that’s comfortable for you. And my biggest takeaway for this post is THAT’S OKAY.
Some Basic Rules
I’m sure you’re all going to hear about keeping a budget or never carrying a balance on a credit card or never paying full price. So here’s a couple general rules I always followed that I think get lost in financial advice columns.
- “Pay yourself first.” This advice from Robert Kiyosaki’s Rich Dad, Poor Dad, is the biggest thing I remember from AP Econ (it was the summer reading). Essentially, this principle asks you to put money into the bank–savings, your retirement. Even if it’s only a little, or not the same amount each paycheck, the habit fosters an awareness to sock away what you can for the future. If you absolutely cannot, this principle could demonstrate changes you might make over a period of time–seeking better compensation, lower rent, investigating why credit card bills got so high, etc. Now that I’m married, and viewing what our aging parents and grandparents are experiencing, I’m personally finding it more and more important to have savings, especially for retirement. Also, as jobs change or your family changes and if someone’s at home with the kids, a nest egg built in your twenties will help so much more. Compound interest is a beautiful thing.
- Trust yourself. What this means is getting to a place where you can make financial decisions, like using a credit card for air miles, without worrying about “mistakes.” Advisers like to tell young people not to do certain things because they presume we all lack self-control. If you are in a solid place and have made good decisions, you can ignore some of the “nos” you might read about–not everyone needs to link all their bills and accounts online to a budgeting software if they can follow their accounts without remembering yet another password; or to be told not to use a credit to pay for things (to earn rewards) if they’re responsible enough to pay it off every month. But if you feel like you just know it might go sour, or you can’t adapt a habit if later circumstances change, then get to a place where you can trust yourself. In marriage, confidence and trust in money management skills are central to sharing funds.
Sometimes you can’t stick to hard and fast rules, the program or budgeting software you got in college, or even your own ingrained habits. Life changes. Circumstances change. It’s incredibly important to learn how to adapt, as well as give in on some of your own rules–even as something as small as “never full price”–because it is better in the long run. Plus, when you marry, flexibility is key.
As my husband and I discuss finances, we keep in mind that whatever we decide together now is the “right now plan,” and doesn’t necessarily have to be the forever plan. When two people are figuring out the rest of their lives and spending them together, differences will arise. You should definitely discern the ones that you know you could not overcome, including with money management. But with flexibility, some differences, even money management skills, can be worked around. My husband and I have the important similarities, but we also realized we have two different mindsets about a particular fiscal move. The rationale for both ideas were explored, boundaries discussed, and in the end we’re going with a particular accounting plan, but with the caveat it could always be changed in the future.
Flexibility does not mean fluidity, though. If one of us is seeking a change, it should be discussed and agreed upon. Too much yo-yo-ing within plans and habits is not good when dealing with something as serious as money. It pays for the roof over our heads, the food we eat, our medical care. We’re not going to treat it cavalierly.
The above word is the watchword of our marriage, in so many respects, but especially with finances. Both of us carried similar attitudes from our single years into our relationship. While we don’t treat money loosely, we also don’t hoard it. We save, but we also treat each other. I shop at certain stores for somethings, and Savers for others. Even our nontraditional accounting plan is not heavily skewed to one way of working. Rather, we have it set up so it levels out in both our favors.
A healthy attitude toward money is one that appreciates its value and role in the world and people’s lives, but doesn’t make a god of it–either through accumulating to spend out of greed or accumulating to save out of fear. Be a good steward of your money now, seek it out as the chocolate chunks in the ice cream of goodness that is your hopeful beloved, and however you decide to manage money will be what is best for you.