5 Tips for Reaching a Money Agreement With Your Spouse

A contributor for Money Crashers Personal Finance, David Bakke lives in Atlanta with his family and focuses on topics like frugal living, smart spending, and giving back.

Marital problems seem to arise or become exacerbated when communications about money break down. When you’re in a committed relationship, at some point in time you must have a serious discussion about how you plan to spend and save money. This “money agreement” establishes guidelines and may include some concessions.

Here are some tips to reach a successful money agreement with your spouse:

1. Be Open and Honest

Most people fall into one of two types: spenders or savers. If you and your significant other don’t share the same beliefs about money, having open discussions to discuss your mutual finances and following money management tips for married couples can improve your relationship. You should both feel comfortable saying what you need to say. Avoid problems down the road by having objective conversations where you each discuss your ideas and plans for the money you make.

2. Establish Guidelines

Setting up rules may seem too rigid, but establishing guidelines allows you and your partner to have some flexibility. Create an agreed-upon set of guidelines for mutual money management.

Among other things, address the following topics:

• Bill Payment. If one partner makes more money, does he or she plan to pay the majority of the bills? Or will you split the bills and expenses 50/50?
• Spending Limits for Discretionary Purchases. If you decide to pool your money, define the total amount that you can each spend every month on discretionary purchases.
• When to Check in With One Another. Even if you don’t pool your money and instead opt for separate bank accounts as a married couple, you may want to consult with each other before making some purchases. Perhaps you decide that if one of you wishes to spend more than $200, you have to at least let the other know about it ahead of time.
• Your Action Plan for Sudden Loss of Income. If one of you loses your job, the other partner may need to take on the lion’s share of the bills.
• Debt Payment. More than likely, you both entered the relationship with some debt. Determine whether you plan to pay off your debts together or separately.
• Tax Return Checks. You may decide to spend the money on your home, take a vacation, or put away some more money for retirement.
• Managing an Inheritance. If you or your spouse will inherit a significant amount of money, determine how you will spend it or how you will allocate the money in your savings plan.

While not comprehensive, this list addresses many of the issues couples fight about. Your money agreement should include items specific to your individual situation.

3. Listen Carefully

Listen closely to hear what your spouse tells you about money. For example, if your spouse wants to switch the household to a completely organic diet, and you worry about the additional costs, listen to your partner’s side of the story before expressing judgment. Yes, it may cost more money in the short-term, but eating organic could lead to a greater savings in the long run, with improved health and reduced healthcare costs.

If you object to something put forth by your partner, show enough respect to listen to his or her reasoning. Save your judgment and your opinion until after your partner has presented his or her case, and be willing to make concessions.

4. Be Willing to Compromise

You and your partner must compromise when you create your money agreement, especially if you have different ideas about spending and saving. No matter what happens, neither side wins or loses. The ability to compromise about money bodes well for a happy long-term relationship and will prevent financial infidelity later on.

You inevitably make individual purchases when you are in a relationship, and your money agreement needs to reflect your individual needs. I never spend money shopping for clothes. Therefore, for me to suggest a $200 annual clothing allowance could be unfair and impractical to my partner. Instead of forcing your opinion, propose a monthly budget for clothes, have your spouse do the same, and agree on a happy medium.

5. Finish the Discussion on a Happy Note

After you have completed your money agreement discussion, make every effort to ensure that you both feel satisfied with the agreement. Don’t try to force ideas upon your partner, or leave the discussion unhappy or without resolution. Don’t belittle your partner about poor money management decisions, or his or her debts. Instead, make sure that you and your partner agree on every decision made.

Final Thoughts

Openly discuss how to handle your finances to arrive at a fair agreement that benefits you and your significant other. Even discussing the most trivial of details can help ease tension in your home. Continue to discuss money-related issues as they arise, rather than have something fester and lead to larger problems. A money agreement paves the way for a happy relationship, where both you and your partner can openly and honestly discuss your finances, and plan for your future.

Have you and your spouse come to a money agreement?