Money matters in marriage. Studies repeatedly find that money is the No. 1 issue about which couples argue.
The reason money causes so many arguments is what money represents. Money is both a symbol of and a tool that meets many of our deepest emotional needs, such as “power, control, freedom, success, security, acceptance, status and love,” explained author Syble Solomon, who has spent years studying the psychology of money.
There are several steps that can help end these arguments or, better yet, avoid having them at all.
•Establish a budget. Budgets are simply a plan you and your spouse agree on for handling your income. There should be at least three general areas: saving (10 percent), emergency fund (10 percent) and living expenses (80 percent).
•Saving takes self-discipline. There'll always be reasons why you can't save. But, if you don't, you won't be prepared for the future. And don't be tempted to use your savings to buy something that you “really, really want.”
•Emergency funds are also important. Every couple faces unexpected problems. Having a “rainy-day fund” reduces the chance of financial disasters.
If you have credit card debt, use this 10 percent to pay it off as quickly as possible. Making minimum monthly payment costs you a fortune in interest, while taking forever to pay off the principle. Pay off the smallest first, using the 10 percent plus the minimum payment you're already making. When the card is paid off, use that entire payment, plus the minimum payment on the second card, to pay it off. When cards are paid off, throw them away, until you're down to one.
•The 80 percent for living expenses pays for food, clothing, housing and transportation, along with charitable giving, family gifts and entertainment.
Staying within this 80 percent requires that you and your spouse set some guiding principles for spending. As you talk about spending guidelines, remember, it's not really money you're talking about; it's your deepest, core values and how you see yourselves. This is where real differences may arise between you.
Some people have a deep need for security and want to save as much as possible. Others may be very generous and want to give freely. Still others feel a powerful need to spend money in a way that brings them status. Respect each other's view. Work toward a budget that recognizes both your needs.
Staying within a budget
There are basic rules to staying within the 80 percent for living expenses.
•First, discuss your financial expectations. What kind of spending plan makes you feel reasonably secure while still giving you a sense of independence? How much should be given for religious purposes, to charities, or helping family or friends? Are there dollar amounts or situations that should be talked over before you make the purchase?
•Secondly, agree not to spend money you don't have. Limit your purchases so that you stay within the 80 percent of income.
•Thirdly, be honest about your spending. Just because something is bigger, better, nicer or on sale doesn't mean you need it; it only means you want it.
•Finally, how much debt do you feel comfortable with, and what role should credit cards play in your spending? What purchases are important that debt is acceptable, such as a home?
If you and your spouse respect each other and the emotional needs money represents, make your expectations clear, plan your spending and stick to your plan, you'll find money issues will work for your marriage, not against it.