Tying the Knot in a Meaningful and Memorable Way (Without Losing Our Savings or Sanity)

Thursday, April 30, 2009

Tip #14: Ideas for Building Successful Relationships

"When you say 'I do,' one of the vows should be that you understand that you are taking on the financial behavior of your spouse."

I was flipping through Suze Orman's book, The Money Book for the Young Fabulous & Broke, the other day, and I came across that quote.

I think it's so important for people to go eyes-wide-open into marriage. Even though movies usually end with the wedding and the implication that everyone lives happily ever after, real life keeps on truckin'.

Unfortunately, marriage alone doesn't really solve problems. All the problems that were there before you got married are still going to be there when you say "I do" (or "Hell yes!" or whatever it is you're going to say in your ceremony to seal the deal).

It's easy to get distracted by things like flowers-shoes-dresses-centerpieces-cakes--oh my! For many people, those things are fun and light and airy.

It's harder to think through the really hard stuff of marriage, like, "What will it be like when we merge our money? How will we do it? What are the potential pitfalls? What do we need to proactively do to make it work?"

A simple answer to a complicated questions is: talk, talk, talk. As a couple, it's important to sit down together and figure out how it's going to work.

One question to start with is: "What kind of financial person am I? What kind of financial person are you? How will our two [potentially] different styles work together?"

If you think about a spectrum of personal financial management from saver <----> spender, most of us fall at different places. I am definitely on the saver side (I pay my credit cards off in full every month, and I try to temper my consumeristic urges and impulses by reminding myself of my bigger, long-term financial goals). But I am not all the way to the left. I don't save as much money as people with more miserly tendencies. I eat out at least three times a week, and I spend money on things like movie and concert tickets, as well as more expensive things like weekend trips.

Matt is also on the saver side, although we're not at the exact same point on the spectrum. I would classify us as a saver-saver couple.

Here are the other combinations:

Saver-Spender: These couples can balance each other out: "Let's save for our future child's education!" versus "Let's seize the moment and enjoy life!" They can also get into a lot of arguments about how to spend money. Potentially, the saver can feel bitter that s/he has to be the responsible one all the time. Oftentimes, a saver will work hard to pay off debt, while a spender is comfortable accumulating more debt. To make this relationship work, both parties have to figure out a system that works for them. One idea might include a personal allowance every month that each person is allowed to spend as they please. Beyond that, everything else has to get decided jointly. In this relationship, it's particularly important to set joint financial goals, so the spender is more invested in tempering his/her spending habits as necessary.

One of my engaged friends is in this situation right now. Her fiance has a significant amount of debt (for various reasons), and they're working together to figure out a way to work down the debt and live in a way that will prevent new debt from accumulating. It's difficult work, but it can be done.

Spender-Spender: This couple is probably the life of the party! Unfortunately, financial fun is usually a short-term experience and not a long-term one. If your income is significantly larger than your expenditures, it's less of a problem (unless there's an emergency and you don't have an emergency fund). However, it's often true that people spend whatever money they have to spend, so spenders can easily find themselves with credit card debt. Credit card debt is the worst, since you actually end up spending more money for your money. Couples in this situation have to figure out what their goals are and put systems in place that help them reach their goals, despite their spending tendencies (think automatic bank transfers so your money goes directly from your paycheck to various saving accounts).

I don't mean to oversimplify the situation by boxing couples into one of three categories. The nuances look different from couple to couple, depending on where each person is on the spectrum. Introspection is key in this situation.

Matt and I joined our finances fairly soon after our engagement. We used that period as a trial run. We put systems in place that would make the transition smoother.

Now that we're married, we're still refining the system and figuring out what works (yes, by talking, talking, talking).


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13 comments:

The Thirty Something Bride said...

Love this post. It is SO important! I'm reading The Idiots Guide to Marriage and they talk about the Spender/Saver aspect as well. Money is a super-sensitive subject for me and the fiance, so much so that we have been going to pre-marital counseling to figure out the best way to communicate about it. It's the hardest things I've ever had to do, but also the most rewarding! One of the top 3 reasons couples divorce is money, so the more you talk about it and understand it, the better! Thanks for this great post!

megan said...

thankfully my fiance and i are pretty dead center in the saver-spender category. i tend to save more than he does, but we never want for anyhing, and we're able to pay for emergencies, so it's pretty decent. we've already decided to make a centralized checking and savings account, and keep money in separate accounts for our play money. that way, we pay for our own fun, and we jointly pay for expenses.

also, my motto is that the key to any successful relationship is communication. you don't get anywhere by not talking.

Los Angeles on a Budget said...
This comment has been removed by the author.
Becca said...

Yes yes yes! We actually don't know how long our engagement will be, but we're planning to transition into "married" finances and thinking over the next six months. We're starting with a joint rent/expenses account when we move in together next month, and we plan to work our way through "Smart Couples Marry Rich" which many friends have recommended as a way to think, plan and talk through individual and joint financial patterns and goals. We're very much looking forward to setting up a lifelong foundation together and working through the hard details of our financial partnership.

Autumn Witt Boyd to be said...

I have to say that, although I was really bummed to find out that my parents wouldn't be helping pay for our wedding, it FORCED my fiance and me to talk about money early, make a budget, and work together to save for our wedding goals. We learned a lot about each other in what turned out to be a very positive thing for our relationship. We're happily going into marriage with our eyes wide open, phew!

Marina said...

Talking about money with my partner has made me more aware of class differences in our society than any Marxist college course.

It's not just that I'm a saver and he's a spender. We both appreciate the value of saving and the value of spending. We just have fundamentally different attitudes towards where money comes from and what it's for. After a lot of discussion of unconscious attitudes, we've figured out that I think money is something you earn, something that is directly linked to the work you do. His unconscious attitudes are that money is something The Man has, and sometimes you can convince The Man to give you money and sometimes you can't. My unconscious attitude is that the purpose of money is to save to protect yourself in emergencies and pass on to your family. His attitude is that money is to fulfill your basic needs so you can work as little as possible and spend as much time as possible on what you really love doing. Both of our attitudes are directly linked to the money our families have.

It's been really easy for me to get frustrated and say, "Don't you understand how important it is to save? Don't you care about our future children?" And it's easy for him to say, "Don't you care about me not working myself into an early grave? Don't you care about my happiness?" We've had to really dig deep to figure out that merging our finances is much more than a joint checking account; it's a zillion and one unconscious assumptions about the purpose of money.

The best advice someone's given me about merging finances is that we don't have to figure out The Right Solution immediately. We can have separate accounts for the first couple years, and then maybe have a joint account when we decide to make a big purchase like a house, and then maybe split it again if our careers change, etc. We're going to have to be flexible as our lives together change.

EmilyAnn said...

This post, and particularly your post about how you and Matt divide your expenses are incredibly helpful. I wonder if there is any advice out there for new couples who still don't have an income...those of us that are still students living off of loan money. I worry about this a lot. Do I donate to charity or to the church? How much should I eliminate the dining out etc? I can imagine that it is only going to become more complex when I marry my fiance and we struggle with these decisions together with different values and worries.

Marissa said...

I love it that there are blogs like this that talk about marriage issues instead of "all-wedding all the time". I do love to look at centerpiece ideas, but it's so refreshing that someone else recognizes the importance of life after the wedding, too.

Girl in Transition said...

I like this article a lot; I tend to be more of a spender and my bf a saver. He has helped me become more of a saver, and he has learned to give in a little more and savor the fine things :) It also is because of our backgrounds: I grew up an only child and more privileged, while he was firmly middle-class. Moving to Houston alone also forced me to grow up a lot quicker. Megan's practice of the bank accounts is a god idea, too! Sara, please keep blogging; thanks again! -Therese

Fidget said...

Thanks for addressing this. We need to figure out our finances, though we are both on the saver-saver end of things . . . any good books in addition to the ones mentioned would be welcome. We are both teachers in our 30s . . . I have student loan debt, he doesn't; he owns a house, I don't (but soon will!); that's kind of the deal. Thanks ladies! Enjoying your blog.

Becca said...

Oy - I just realized that my comment above should have referenced the book "Smart Couples FINISH Rich," NOT "Smart Couples Marry Rich."

If we're carefully navigating dual-finance territory, I shudder to think what polygamous rich-marrying couples would have to address!

Anyhow, the book is by David Bach, and it's less about being wealthy than helping you decode on financial goals individually and then together, as a couple.

Arden said...

My fiance and I have been reading two books that aren't geared towards finances after marriage, but rather thinking about your relationship with money. One is called, "Its Not About the Money" and the second is "Your Money or Your Life." For us, beginning to think about joined financial planning has been a good jumping off point for communicating with each other about our life goals and priorities general.

He and I are both on the saver end, but choose to spend on very different things. I am not sure what our structure will be in the end - but I do know that it is important to me that we each have our own discretionary money

AN ATLANTA BRIDE said...

This is a GREAT post!!

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