Marriage And Finances: Thoughts On Doing And Deciding
Research consistently shows that money arguments are a part of many marital problems. In 74 percent of divorces, money problems are listed as one critical cause. Whether money arguments are a symptom or the cause of trouble is not clear. Money (or lack thereof) may not be the problem; differing perspectives on the role money plays in a marriage and miscommunication about money decisions and behaviors are more likely the difficulty.
When preparing for marriage, the question about who will “handle the checkbook” invariably arises. Couples confuse the task of paying bills and managing investments with the decision-making process. The first two are no different than taking out the garbage or making the bed; decision-making, however, is most important and should not be delegated to one spouse.
Even though the financial world is more complex than in the past, money management basics for married couples remains the same. Couples should consider some basic principles. Agreeing on these provides a firm foundation on which to build an economic household. Marriage is an economic partnership — income accrues to the family, not to the individual who earned it. Total expenses should be less than total income. Saving for long-term goals is imperative for long-term financial security. Both partners should take part in making financial decisions — setting goals and understanding income and expenses.
Because marriage is an economic partnership (remember “for richer, for poorer”), couples must discuss the allocation of labor among daily living tasks, which include working in the marketplace, caring for children and other family members, and volunteering or participating in community and parish life. Economic allocations should not be made based on the financial return from these various activities — in a family all are considered equal. Therefore, economic income belongs to the family, not to the person who participated in the commercial marketplace. Assuming responsibility for one task rather than another requires economic trust between spouses.
The practical component of sharing financial resources may be lived in a variety of ways. Spouses may share checking and savings accounts, or multiple accounts may fit their style and needs better. Perhaps they have one account for paying bills and one for each spouse’s individual spending money (allocated of course, by agreement of the couple). One spouse may save the funds for retirement in her work plan while emergency funds are accumulated in a joint account. For a variety of legal and financial reasons, the marital home may be titled to only one spouse. Regardless of the name on the title, an attitude that all financial resources are “ours” is important to a successful money marriage.
Financial deficits are never good as they eventually create financial cliffs. Long-term financial security requires that total expenses be less than total income. Couples need to decide how to allocate income to meet family needs. One method is to follow standard budget allocations (25 percent of net pay for housing, 10 percent for utilities, 15-20 percent for food and transportation each and the remainder to cover variable expenses such as clothing, communications, entertainment, gifts and donations). Another, more personal, system explores the priorities of each person and then compromise is used to set the budget. For example, among the common spending categories listed above, a spouse might choose housing and entertainment as his priorities while she chooses housing and transportation as hers. Regardless of methodology, once spending plans are agreed upon, each spouse has a moral responsibility to adhere to the plan. Because plans and family contexts change over time, revisiting a spending plan annually is a good idea.
The subject of allowances — for spouses and children — arises in most family situations. Allowances offer individuals a bit of control and accommodate variances in personality and priorities. Each spouse, regardless of market earning capacity, should enjoy money to spend without accounting for it to the other. The amount and what expenses are to be covered by the allowance need to be agreed upon in advance. While one spouse may need a greater allowance, perhaps to cover work related meals, allowances should not be dependent upon earned income or production levels. These guidelines hold true for allowances for children as well.
The tasks of banking and shopping are the practical parts of implementing the spending plan. As a matter of course, one spouse may be more detailed or numbers-oriented and actually enjoy the task of paying bills, balancing accounts or selecting investments. Electronic banking makes depositing paychecks easy and tracking spending a breeze. To minimize arguments and overspending, explore the use of electronic banking to pay regular bills automatically. Utility company budget plans help convert seasonal variations in expenses into equal monthly payments. Allowances for each partner’s spending money can be made in cash or debit cards, which may be safer and easier.
A family’s finances cannot be considered at just one point in time. Married couples will have to allocate income and expenses across time as well. Goal setting is a key component in financial management. As with spending decisions, a couple must consider the purpose and amount to save for goals. Couples will disagree upon goals and can employ the priority/compromise procedure discussed above to compromise. Again, once agreements are made, it’s incumbent upon each spouse to work toward common goals.
Both partners should be involved in understanding household finances and making decisions. The excuse of “I’m not a numbers person” is not appropriate. Why? Because understanding and decision-making are different than the task of paying bills, selecting investments and negotiating the purchase of a house or car. Understanding is a precursor to appropriate decisions. The marriage commitment assumes active participation in all aspects of family life. Joint decision-making increases the probability that marital and family goals will be reached. And asking one partner to shoulder the burden for economic stability is unfair.
Sacramentally, legally and practically, marriage is an economic partnership. Trust and commitment are the cornerstones of success. While the tasks of managing money may be assigned to one person, neither partner should be excused or excluded from understanding and participating in financial decisions as money is one vital component of family life.
Sharon Burns is the director of Catholic Charities for the Diocese of Evansville.
