Business

When you and your spouse aren't on the same spending page

In this June 15, 2018 photo, $20 bills are counted. (AP Photo/Elise Amendola, File)
In this June 15, 2018 photo, $20 bills are counted. (AP Photo/Elise Amendola, File)

Most married couples take a “divide and conquer” approach to household tasks and chores.

One spouse might handle weekly shopping, the other might handle garbage and recycling. One spouse might handle laundry and cleaning, the other might handle yardwork and maintenance.

One spouse might drive the kids to school, the other might handle pickup and extracurricular activities.

But household spending/budgeting is one of those responsibilities that’s best tackled together.

Money issues are one of the biggest sources of marital tension, and a leading factor in divorces.

Here are five ways that may help you and your spouse can make sure you agree on your household spending, avoid surprises and enjoy your money “together.”

1. Have an open and honest discussion

Many couples assume their attitudes about money are aligned. Then one day, the furnace goes out or the roof needs to be replaced and funds are needed to be withdrawn from a savings account.

But the other spouse had already earmarked that money for a different purpose or, worse yet, already spent it on something else.

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Stressful situations are not the ideal time for a couple to discover significant differences in spending habits. Sit down with your spouse and have a thorough review of your finances, and your monthly budget.

Find compromises that will allow you to save for the future while still enjoying yourself and managing the priorities.

2. Understand the total household cash flow

In many households, one spouse handles all the bill payments. This can lead to misunderstandings, and “discussions,” about where the money goes every month.

Both spouses should understand how much the household spends every month, and how your bills get paid.

If you’re the one who’s usually in charge of bills, take some time to explain the process to your spouse.

Show him or her which bills are paid electronically, which are paid by check, the monthly amounts and due dates, etc.

This won’t just help both spouses understand the monthly cash flow, it will see that both spouses can handle household finances in the event of an emergency.

3. Be transparent about all assets and liabilities

Newly married couples still might have banking or credit accounts that are only in the original account holder’s name.

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The other spouse might not find out about these accounts until a credit card is maxed out, or a credit score is pulled during a loan application which can be an uncomfortable situation if the their score is not solid.

Again, discussing money with your spouse at a time when there is not an issue allows a much more constructive outcome.

Financial secrets tend to come out at the worst times, compounding stress, hurt feelings and strain on your budget.

Your spouse should be a co-signer and beneficiary on all your accounts, and vice versa. If one of those accounts carries a large liability, get out in front of the problem and talk about how to start paying it down.

Discuss the ramifications of combining any large individual assets with a tax professional or your financial adviser.

4. Agree on a budget

If one spouse is responsible for budgeting and bill pay, that person often becomes The One Who Has to Say No.

No eating out this week. No weekend trip to the water park. No new cellphones. No new clothes, etc.

Not an ideal way of building fluid conversation when it comes to expenses and decisions.

Nobody likes being in that position, especially if you’re saying no to your children. Eventually, you or your spouse will resent being The One Who Has to Say No.

You both should understand the household’s monthly cash flow and agree on how your money is — and isn’t — spent.

5. Get help and simplify

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There are many apps and programs available today that will help assist you in managing your expenses and overall debt.

Automating select bill payments and regular contributions to retirement and savings accounts also can help to clarify your monthly budgeting picture.

This article is provided by Pete Alepra, a financial adviser at RBC Wealth Management in Cedar Rapids. The opinions in this column, prepared by ROL Advisor, are for general information only and are not intended to provide specific advice or recommendations for any individual. Securities offered through RBC Wealth Management, a division of RBC Capital Markets LLC, Member New York Stock Exchange, Financial Industry Regulatory Authority and Securities Investor Protection Corp.

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