Picture it. You’ve settled the kids with a babysitter, put on some clean clothes and headed out with your spouse for a long overdue date night. You’re about to enjoy a bottle of wine, a nice meal, maybe even dessert. And best of all, a rare chance for uninterrupted, adult conversation.
You know what you should talk about?
I know what you’re thinking: “That’s a sure-fire way to kill the mood.” Or “Great. Just what I want to do — start a fight.”
But the truth is having a heart-to-heart about your finances is one of the best things you can do to build a healthy, lasting relationship.
Money is one of the top reasons couples fight. And ongoing arguments about money are one of the main predictors of divorce. But do you know what’s worse than fighting about your finances (or at least just as bad)?
Not talking about them at all.
And that’s pretty much the situation my husband and I were in. After more than a decade of co-habitation, we’d settled into a fairly comfortable routine of earning paycheques and paying bills, each managing our share from our own bank accounts. And unless a major expense fell outside of that routine — like buying our house or planning a family vacation — we didn’t see the need to spend a lot of time talking about money.
Then last summer, after watching numerous episodes of Slice’s Til Debt Do Us Part, I started tracking my spending and following a budget. Seeing where my money was actually going was an eye opening experience; so much so that I started touting the benefits of tracking income and expenses to everyone I knew — especially my spouse. Because the more diligently I tracked my own dollars and cents, the more I really, really wanted to know what was happening with his.
After months of dropping not-so-subtle hints, he finally whispered the words I’d been longing to hear: “I don’t know where my money is going. Can you help?”
Yes! Yes I can!
I spent that same evening combing over his previous months’ bank statements and categorizing every single purchase he made. I had it all planned out. First I’d present him with an eye-opening view of his spending, just as I had experienced, and then I’d guide him toward financial enlightenment like the fiscal guru I’d clearly become. After all, I had been tracking my spending for months!
But as it turned out, I was nowhere near the financial expert I thought. In fact, my lessons in personal finance had only just begun because the only financial mistakes I discovered where mistakes we were making together.
Here’s what we were doing wrong.
We didn’t talk about money
Ok, we talked about it in general terms. Like, we both had a general idea of what the other made. And we made major financial decisions together. But other than that, we were pretty hands off of each other’s accounts.
I had my reasons for avoiding these conversations, like not wanting to sound like a nag or feel like I was asking for permission to spend money. I’m sure my husband had his reasons too, and they probably weren’t that different.
But when I consider the consequences of not talking about money, all of my reasons seem petty and irresponsible. For one thing, if something ever happens to me, I want my spouse to know exactly how I manage my share of our expenses and what those expenses are so that he can keep our family financially stable with as little added stress as possible.
But even in the best case scenario, it’s impossible to make good financial decisions or set achievable goals for our family if we’re only seeing half of the picture. And until recently, we’d both been looking at our finances with one eye shut.
So not talking about money is not an option, but that doesn’t mean its easy to do. Fortunately, there’s a lot of great advice on how to do it the right way. Like discussing your finances regularly, planning when you’re going to talk ahead of time, accepting that you will have differences (spender vs. saver) and keeping your focus on your shared goals.
We didn’t have a joint budget
We’ve always divvied up our fixed expenses, like our mortgage, vehicle payments and utilities, based on our respective incomes. Knowing which expenses we’re responsible for makes it easier to manage our accounts and ensure we’re making payments on time.
But most of our expenses are non-fixed joint expenses, like groceries, fuel and household goods. And since we were only focused on how much we were spending individually on these things, neither of us had any idea how much they were costing us as a family. When we combined our expenses, it became clear that we were spending way too much on some and not enough on others.
For example, I thought I was purchasing the lion’s share of groceries for our family. Then I took a look at my husband’s bank statements and discovered that he was spending as much on food as I was every month. Which meant that our family’s food spending was double what I originally thought and completely out of control.
We also rarely planned ahead for one-time expenses, like our kids’ sports fees, and instead put off deciding who was going to pay to the last minute. This usually left one or both of us scrambling to pay an expense that we could have easily covered if we’d planned ahead.
Creating a family budget will help us cut back on waste and make sure our spending matches our family’s priorities. It’ll also set the stage for better future planning. And since we’ll need to keep it up-to-date, it’ll serve as a great communication tool for all of the super fun money talks we’re going to have.
We didn’t plan short and long-term goals together
Our money is our money; our debt is our debt. But because of the way we’ve divvied our expenses, my husband was responsible for basically all of our loan payments. And as a result, he carried the burden of debt alone while I basked in the ignorance of not really knowing how much debt we actually had.
Even a small amount of debt can suck, so we both want to get rid of our debt as soon as possible, and the best way to do that is by tackling it as a team.
But living debt-free also means planning ahead for expenses that would normally put us into debt — like home renovations and repairs. And we have a lot of those on the horizon.
For one, our dishwasher leaks, our stove only works part-time, and I’m pretty sure our old fridge is demolishing our power bill. So we’re going to need to replace them.
And if we’re buying new appliances, we might as well renovate the kitchen, right? And the bathroom. And redo the back deck. And landscape the yard.
Which comes first? And what about long-term goals, like paying for our kids’ education and — someday — retirement?
It’s easy to think of all the great things we want to do (and the not so great things we have to do). It’s harder to agree on what to do first and then figure out how to make it happen.
For that, we need a plan.
And a budget.
And a whole lot of conversation.