Would you rather admit to an affair or tell your spouse that you had a bank account they didn’t know about? If you brush off the bank account admission as no big deal, think again. For a significant number of married people, dishonesty about money hurts worse than cheating.
Consider this: Slightly more than a third of respondents to a 2018 CreditCards.com poll said they’d rather have their significant others cheat on them than hide bank accounts from them. But despite the potential financial infidelity has to devastate a marriage, married couples are often reluctant to talk about their finances, instead leaving themselves open to arguments and breaches of trust. One telling example: a 2017 Experian poll found that 42 percent of formerly married couples only found out about their partner’s student loan debt after they were divorced.
American married couples are doing a bad job talking to each other about money but it doesn’t have to be so hard. Couples can avoid many financial clashes with honesty and being willing to compromise. “To have a happy marriage you’re going to have to meet in the middle,” says New Jersey-based Accountant Tracy Beveridge, who has spent decades of advising families and businesses. Here are eight simple rules about money to keep your marriage in the black.
1. Know Your Partner’s Priorities (And Be Ready to Compromise)
Broadly, people fall into two money approaches: savers and spenders. Savers hate spending money and savers spend more freely. When discussing personal finances, savers can seem more virtuous but don’t get too smug because of how tightly you hold onto a dollar. When frugality spills over into miserliness, it makes life unbearable, particularly when your spouse is inclined to spend.
As early as possible in your relationship, discuss how you approach money as individuals and map out how you’ll approach it as a couple. If you’re both spenders or both savers, congrats, you’re in for a smooth ride. If not, be forthright as possible and try to find middle ground. “You want to be open and honest because later on is that if your spouse’s goals are not in line with yours, then it’s going to build resentment,” Beveridge said.
2. Define Major Purchases (And Clear Them With Each Other)
You shouldn’t have to alert your spouse every time you buy a pack of gum. If they want that level of granular detail on your purchases, you’re either living in dire poverty or an abusive relationship. Major purchases are different, however. Cars and couches are expensive and your partner is likely to see them every day. If they think you spent too much or made a bad choice, they’ll have reminders of your controversial purchases. You can avoid the stress by talking about big ticket items with your partner before you buy them.
Not everybody’s definition of a major purchase is the same, though. You might shrug off a brand new laptop while your partner sweats a rice cooker. “If one spouse comes from a family that really didn’t worry about money, expensive to them could be $5,000,” Beveridge said. “And then somebody who came from a family that struggled, $500 could be expensive.” Assuming you approach purchases the same way could lead to disaster. Instead, have a conversation where you agree on a price point threshold.
3. Set Specific Timelines for Financial Goals
Ambiguity is the enemy of financial planning. Unless you’re clear about when and how you’ll meet your goals, your goals will never be met. If you and your spouse agree to buy a house “soon,” that might be less firm of a commitment than it seems, thanks to the elasticity of the word “soon.” “Soon for me could be six months, soon for you could be a year,” Beveridge said. You need to say you want to be a homeowner in x number of years. Without a set goal to work towards, your plans will lack cohesion and urgency. When you keep your future vague, you don’t think strategically about money, budgeting, or credit. If you say you want to meet a goal in five years, it’s easier to know what steps you need to take immediately and set benchmarks you want to hit along the way.
4. When Talking About Money, Choose Your Words Wisely
The word “budget” usually isn’t greeted with celebratory cheers and high fives. At best, people grimly accept that it’s an unpleasant necessity, like a root canal. At worst, it evokes panic. “Budget has a very negative connotation,” Beveridge said. “If you say budget, it’s the same thing as diet. If I say go on a diet, right away people think deprivation.” Beveridge suggests a clever and easy workaround: don’t use the word “budget.” Say you’re going to make a plan for financial goals or take steps towards financial health. Sticking to a budget is often less painful than people think. Paying attention to word choice can alleviate some of the anxiety that comes with creating one.
5. You Don’t Need a Budget, But You Have to Pay Your Bills
If your partner is steadfastly against budgeting even after you’ve nuanced your language as carefully as possible, don’t panic. You don’t have to spreadsheet every penny moving through your marriage. Make sure the electricity doesn’t get shut off and the kid’s college fund is growing and you’re good — or at least in good company. Beveridge has found that many two-income couples in their 30s don’t keep a shared pool of money the way their parents might have at their age. “They have three checking accounts now. They have one for the wife, one for the husband, and a joint account,” Beveridge said. “They’ll say, okay, our house expenses are $3,000 a month, so they each put $1,500 dollars a month into this joint account and then the house expenses get paid from that joint account, sort of like roommates.” This can be sliced even more thinly. Couples can divvy up recurring expenses between themselves to maintain a degree of financial independence they’re both comfortable with.
6. Be Honest About Your Assets and Income…
Here’s an easy recipe for ruining a marriage: pretend you’re rich when you’re broke. Spending beyond your means is never sustainable. The crash is inevitable. And when it comes, your spouse will never forgive your dishonesty. You lied to him or her about basic truths of her being; they thought they’d married someone completely different from the broke loser you turned out to be. And, counter-intuitive though it may seem, acting broke when you’re secretly sitting on a trust fund is a marriage-wrecker too. You may think you have a good reason for keeping the stash secret, like if it’s an investment or a rainy day fund, but no one likes it when their spouse keeps secrets from them.
7. …And Be Honest About Your Debt
Admitting you’re in debt feels like confessing a crime. And your spouse is often the most difficult person to come clean to. But as painful as that conversation can be, it’s one you need to have. Keeping your debt secret will destroy your marriage in the long run. “If you’re not honest about debt, chances are it’s going to come back to bite both of you,” Beveridge said.
Debt ripples through your entire financial life. Servicing debt compromises your ability to make new purchases because you have less available credit and because your money is eaten away by interest. As your payments balloon and your savings dwindle, your credit history makes major purchases more expensive or even sometimes impossible. As bad as admitting you owe Mastercard or Sallie Mae five or six figures can be, it’s 100 times worse when you wait until the last minute. “You don’t want it to come out when you apply for a mortgage and, guess what, one spouse has really crappy credit and their debt ratio is too high to get one,” Beveridge said.
8. You Don’t Have to Share Everything (But Don’t Keep Secrets)
You don’t need to share all of your assets with your spouse. Pre- and post-nuptials exist for a variety of good reasons. Sometimes it makes sense for couples to avoid commingling assets like trusts or property. Maybe you co-own property with your siblings and it’s easier not to involve your spouse. It may be a second marriage where both you and your spouse come into the marriage with assets you’re more comfortable keeping separate. In any event, you don’t necessarily have to share the money or assets with your spouse. Nonetheless, you need to let them know that the money or asset exists.