Marriage means sharing your life and, usually, your finances. But some people relinquish all financial control to their new spouse when they say “I do” — a move that could prove harmful if it means losing awareness of household money matters.
No one likes the thought of losing a partner. But if your husband or wife has managed all the household money, the stress of divorce or death is compounded if you have to piece together your finances in the aftermath.
Income and expenses, details of where the savings, investments and debt are held, and the amount of each item — these are all crucial bits of information that spouses are better off sharing with each other, even if one takes a more active role in managing it all.
“Taking an extreme position around money management in a relationship — such as taking all of the responsibility or none of it — is a recipe for relational and financial disaster,” says psychologist and financial planner Brad Klontz of Lihue, Hawaii. Instead, compromise and communication are key, as with most things in marriage.
Find the right balance
What works for one couple may not for another. Talk with your spouse both before and early in the marriage about financial priorities and sharing responsibilities, picking an arrangement that fits both of your styles.
Some people are attracted to partners with opposite money management styles, according to Klontz. Someone who doesn’t like dealing with finances, for example, may be attracted to the “perceived stability and prudence” of a partner who does, he says. Then it’s easy to fall into a situation where one person acts as the sole chief financial officer.
In other marriages, one person may handle the day-to-day budgeting and the other person long-term savings and investments. This arrangement isn’t uncommon, according to Avani Ramnani, a certified divorce financial analyst at Francis Financial in New York City. In such situations, “they’re both dealing with money and finances, but they both get a very different (and incomplete) view of things,” she says.
Still, problems can arise when couples aren’t transparent. Spouses need to regularly share their perspective of the household’s financial status. If your partner manages all of the money, ask for information even if you don’t get your hands dirty.
One way to do that, Ramnani suggests, is by having a money date night on a regular basis. Over dinner or a glass of wine, update each other on monthly spending, savings, investments and areas that are going well or could use improvement.
Money is often a source of marital discord, so discussing it openly and regularly can stave off arguments down the road.
Elizabeth Renter is a staff writer at NerdWallet, a personal finance website. Email: [email protected] Twitter: @ElizabethRenter.