Is money stress weighing down your relationship? On your way to Financial Independence, a team approach can ensure that both of you share in the burden and joys of reaching your financial goals. Life sure is easier when you establish a fiscal partnership.
Are you fostering an uneven burden in dealing with your family’s finances?
Doesn’t this depiction seem a bit lopsided? If this is how you and your partner approach financial management, one partner does the majority of the heavy lifting and there is very little overlap or collaboration between the two.
Does one of you feel clueless about financial matters and wants to delegate 100% to the other? If one of you is not engaged, it could lead to a heap of trouble in the event of a medical crisis where the primary financial decision maker becomes incapacitated or even dies. Sounds horrible and morbid, but think for just a moment about what bills may easily fall into arrears if one of you were suddenly hospitalized for an extended period? If it went on for a very long time, do you want your honey to face eviction or bankruptcy at such a time?
It may not be your partner’s favorite thing to talk about, but having a basic awareness of where all your money is going, how it’s invested, and how much debt you have is information you have to share with each other.
And what if your views on money are wildly different? One person is racking up debt and the other living like a miser? Oh that couldn’t possibly generate resentment and marital strife, right?
It wasn’t very long ago that the husband was considered the only one capable of making financial decisions about investments, loans, etc. and the wife was discouraged from asking questions or providing input. This isn’t a feminist post, but let’s acknowledge that many couples still feel that one person is better equipped than the other to manage family finances.
A great way to make sure you and your spouse (or significant partner in crime) avoid uneven responsibilities is to open up dialogue about how to best divide and conquer.
If you are having a tough time beginning the conversation, here are some questions to get you started:
- What financial issues are you most concerned about?
- What are each of you naturally skilled at?
- What tasks do each of you enjoy?
- What tasks do you really dislike?
- Are you interested in learning new skills?
- Will you regularly share in big financial decisions?
- Will you commit to regularly updating the other person about progress?
- Do you want to outsource any financial tasks (tax preparation, for example)?
- Do you trust in each other’s judgement and decision making skills?
- Who has more discretionary time to deal with these matters?
- Can you each be flexible and reassess if circumstances change?
What We Do:
I’m not sure when, but I think it was when I was a stay-at-home-mom, I took over the day-to-day bill paying job. Of course, we no longer write out personal checks for most bills in favor of online payments (man, that’s so much easier isn’t it)? So I take care of most of our monthly bills like utilities, credit cards, and the like (the ones we haven’t set up for auto-pay).
Additionally, since I work in benefits, I take the lead on anything related to insurance, medical bills, and scheduling most appointments for the family. This also includes record-keeping and filing for reimbursement from our Health Savings Account (HSA) and Flexible Spending Account(s) (FSA) when needed.
I also prepare and file our income taxes. (Mr. Need2Save here – I just get too upset seeing our federal income tax bill. Some years Mrs. Need2Save doesn’t even let me know what our tax liability was, just how much we still owe)
There is a category which Mr. Need2Save reigns supreme and that is all-things-techy. So although we have set up auto-pay for things like phone and TV service, if there are any issues with them, he’s the one that deals with it. I also happily delegate to him to decide on which providers we use and when to upgrade our devices. If it were left up to me, I’d probably still have a flip phone!
It’s absolutely true that Mrs. Need2Save still rocks a 2nd generation iPod Nano circa 2006!
All major decisions related to our mortgage, vehicles or home improvement projects are discussed together.
In addition, we establish a draft budget before the new year begins and we revisit it together after any change in earnings to make sure we are on the same page about adjustments. We aren’t strict about the budget – we use past expenses as tracked on Mint to gauge what our monthly spending should be.
When it comes to planning major expenses like family vacations, we alternate back and forth on this responsibility when one of us has a particular interest in a destination or some extra time to plan ahead. I know, extra time? Who has that? Speaking of vacations, we just got back from a two-week vacation in Ireland and the UK – stay tuned for a post on our vacation and how much it ended up costing our family of four.
We are probably unusual in that we talk about this stuff all the time. It was really mutual excitement about achieving our FIRE plans that first got us thinking about streamlining some of our ideas into this blog of sorts. (The blame is actually 100% on Mr. Need2Save because it was his idea to start the blog from the beginning).
I can tell you that anytime Mr. Need2Save starts a conversation with “call me crazy, but I was thinking….” I know some money-saving scheme that’s going to lead to increasing our investments and achieving Early Retirement sooner is coming next. This is generally how our “Project 58” plan morphed over time into “Project 51.” It’s been a slow evolution over the last few years in refining our priorities and saving strategies that have helped us knock off 7 years from our retirement plans!
Pro Tip: Don’t forget to give your partner some time to absorb new information and do their own research before pushing them into a concept that they aren’t comfortable with. If you are really excited about a new investment strategy for example, or a way to further reduce your expenses in a category, present your new ideas and then encourage the other to check it out on their own. Agree to discuss it again after the other person has had time to digest the information and consider it from their point of view.
After you got the day-to-day routine stuff down and you are feeling confident, go for extra credit and talk about your retirement plans. If you and your partner are far apart on ideas on the basics, these may be questions you keep in your pocket until the next time you have a significant amount of alone time. Maybe hold it for your next vacation after you’ve had a couple days to relax and disconnect from work for a short time.
Here are some long-term questions for discussion:
- What age would you like to stop working?
- What expenses do you think you could trim to reach those plans sooner?
- Where do you think we’ll be living when we retire?
- Do you want to try to pay off our mortgage before then?
- How much travel do you want to do?
- What kinds of hobbies or interests do you plan to pursue in retirement and how much money would be required for those?
- What other dreams would you like to finance?
- How would you like to give back to others?
The End Result:
When you get on the same page, share more evenly in not only fiscal awareness but also planning and execution, you may find that you resemble this depiction more:
A lot of people argue about money. I’m glad that we never have. It may sound unromantic to some couples to talk about the nitty gritty of budgets, reducing unnecessary costs, retirement savings, and paying off your debt – but somehow it brings us closer together and joined in our common goals. Aren’t you really honoring your partnership when you foster open dialogue about your financial goals, money worries, and saving strategies?
If you haven’t shared your retirement plans with your partner in a while, schedule this talk soon. Identify your priority gaps so you can move closer towards something you’ll both be satisfied with and make sure you are sharing in the day-to-day minutia.
How do you divide and conquer? Is your partner equally excited about retirement readiness as you are? Do you have disagreements or different views on priorities? If so, how to you bridge these?