Managing Money & Marriage

Have you and your significant other ever argued with one another over spending? If so, you are not alone. In fact, according to Artemis Strategy Group:

  • 73% of people have different money management styles than their spouse
  • 50% of people say financial matters cause the most stress in their lives
  • 31% of couples — even the happiest ones — disagree over finances at least once a month.

So (just in time for Valentine’s Day) let’s see how one couple with serious financial differences resolved their issues…

The Couple

Jackson and Esme have been married for over 15 years and live with their 13-year old daughter. However, they constantly disagree when it comes to money and sometimes their daughter gets mixed up in the argument.

Esme had a nice childhood despite the fact her family was consistently financially stretched. Her family lived paycheck to paycheck, she lived in hand-me-downs, and they were always pinching pennies.

She has always been a great saver, but to this day feels guilty if she splurges on anything for herself. She worked through college to keep loans to a minimum and structured an aggressive payback plan. For Esme, hard work equals money.

Alternatively, Jackson grew up more comfortably. His family sent him to a private school and traveled each summer to new places. They even paid his college tuition, allowing him to graduate debt-free.

His life wasn’t perfect, though. His parents used money and gifts as a substitute for time and personal attention. His parents constantly fought about their own financial issues. As a result, he now equates money with conflict between his parents.

Like any couple, they carried emotional baggage into the relationship with one another (and with money). They are both careful and results-driven individuals who were looking for financial steps to reduce conflict and avoid a divorce.

So, what are they to do?

Retirement Planning

Esme worried about retirement and believed that she and her husband needed to work into their late 60s to get by. Jackson wanted to retire sooner and travel more, yet Esme insisted that they couldn’t afford it.

After reviewing their financial goals, reallocating assets and putting together a Social Security strategy to maximize benefits, their financial plan suggested they could retire as soon as 64.

Separate and Joint Accounts

Esme and Jackson established separate accounts to receive their respective salaries. This helped to control personal spending and retain a level of financial independence. They also established a joint checking account and automatically transferred funds each month to cover combined expenses, such as mortgage, groceries, and their daughter’s expenses.

College Expenses

The couple could not agree on how much to cover of their daughter’s college tuition. After conducting a financial longevity analysis, they were able to compromise on the matter and decided to fund 50% of their daughter’s college expenses. Additionally, they stayed open to the option of paying off their daughter’s loans after her graduation, and pending an assessment of everyone’s financial situation.

An Investment in Marriage

Jackson and Esme have not eliminated their money differences. In fact, they still have debates over how to deal with finances and other issues. But eliminating all the differences is never the goal. Identifying, then communicating regularly and finding solutions collaboratively is the goal. For Jackson and Esme, they’re doing better financially and so is their relationship– which are two things are often correlated.




Source: Financial Media Exchange.