How to Get a Handle on Your Marital Finances

Posted on 4/10/2024

One of the top 5 issues couples argue about in marriage is finances. How do you compare to other American couples. 

• On average, consumers have at least 3 to 4 credit cards. 
• The average credit card debt balance per consumer was $6,295 in January 2024.
• Average credit card interest was 22.75%.
• 24% of Americans have no emergency savings.
• In a recent survey, 43% of Americans say they plan to create a budget and track spending this year.

Managing the finances in your marriage starts with honesty and openness. You need to know where you stand right now and be willing to put in the time and effort together to make your financial dreams come true.

Develop Your Financial Management Plan

1. Develop a Budget

Budgeting is an important financial habit, but it can feel overwhelming if you’ve never done it before. A budget begins with determining your Income Less Your Expenses to arrive at what’s leftover.  When you determine what is leftover, this will give you both an idea of what your short-term goals and long-term goals could be. 

Get all your bills and paperwork together and literally put everything on the table. Calculate the following:

Your Income is any regular recurring monthly income such as paychecks, alimony, child support, etc. 

Organize your expenses into categories. 

• Fixed expenses are bills that you must pay every month, such as rent or mortgage payments, car payments, credit card payments, and insurance. 
• Make a 3-column list of your Fixed Expenses: Column One=the name of the mortgage company, loan provider, credit card provider, insurance provider. Column 2 is the total amount of that balance. Column 3 is the monthly payment to the provider.
• Flexible expenses are everyday spending, such as groceries, pharmacy, dining out, and transportation. Make a 2-column list for each of these expenditures. Column 1 = the expense like groceries, etc. Column 2 is the average weekly or monthly amount for that expense.
• Occasional expenses are things that don't happen every month, such as vacations, holidays, and property taxes. 

Now subtract your monthly expenses from your monthly income. This is what you have leftover to put towards your financial goals. 

2. Discuss the elephant in the Room.

During the budgeting process, you may discover touchy issues. You may discover an alarming amount of credit card debt, a loan you were not aware of, expenses you didn’t know about, etc. 

Approach hard issues with love and with the understanding that the two of you are facing the problem together. Yelling at your partner and pointing a finger will not accomplish anything. Rather, discuss the financial issue that’s making you disappointed and why. Discuss things that you both can do to work on the issue together. 

3. Talk about Your goals.

You’re more likely to follow through on goals when you’ve made them part of your financial plan. Typical financial Goals may be:

• An emergency fund. You should have at least 3 to 6 months of income to be able to survive a job layoff, medical emergency, etc. Start by saving 10% of your monthly income.
  
• Debt Paydown. High debt balances carry high interest payments and can erode any savings you are trying to accumulate. Allocate a portion of your leftover income to paying off debt. Start by allocating 10% of your income to paying down the highest credit card balances. 
  
• Wish List. You may want to save for a new car or save for a house down payment or a luxury vacation.  
  
• Retirement or Investment Fund. It is a good idea to plan for long for the long term. 

4. Create Joint and Separate Accounts for Certain Expenses

Having one joint Household account for common expenses is one of the best ways to manage money as a couple. The Household account is for essential expenses like rent or mortgage, utility bills, groceries, pharmacy bills. Each of you should also have a separate account for your own personal expenses. Discuss and agree that any large purchases over a certain amount, say $500.00, will be discussed before made. 

5. Divide Financial Responsibilities Between the Two of You.

Who’s going to do the monthly budget? Are you going to pay the bills or will your partner? Who is going to handle grocery shopping in a responsible way? It’s important to know who’s responsible for what in the realm of money management. Money management is all about organization and building trust. Distribute responsibilities by your individual strengths.

You will manage the savings/investments, while your partner will take care of bills and expenditures. Don’t be afraid to experiment and try out different strategies when learning how to manage money as a couple.

6.  Schedule a Regular Financial date monthly.

It is important to revisit your budget at least monthly to see your progress and ensure that you are staying on track. It helps you both be accountable to each other and will give you a sense of accomplishment when you see your goals progressing. Make it fun by celebrating your progress each month. Talk about any new ideas you have had about how to reduce expenses and up your savings.

7. Track Your Transactions

Each of you can keep a record of every expenditure for the month. You can collect your receipts, keep a written log, or use a spending app.

Make use of budgeting apps to make the process easier to manage. 

Above all, remember that you and your spouse are on the same team so you can work together to reach your goals. If you're struggling with finance and relationship issues, consider using Marriage in a Box as a resource. This platform provides access to tools and techniques professionals use for relationship counseling. You can set goals, earn rewards, and find marriage coaching services on the site. Check out the available kits and sources of information online to improve your relationship.

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