Financial stress on families and couples. How does it affect relationships and how can it be avoided?
As you know, finances are a subject most households either avoid, or have very intense views about. It can cause resentment towards each other as couples, but does it have to be this way?
The short answer is: Absolutely not!
When it comes to discussing finances, it seems that couples do not take the time to properly review their spending. I think most of it stems from lack of money management, learning the value of money and understanding the needs of the household. Money should be discussed freely without shame or being ridiculed because of the way one manages their finances.
If you were not taught how to effectively manage your money then how do you expect to do it? This is a huge issue with partners that I have discussed this with. In most households for instance, one partner manages the money as best they can – which typically (not always) is the same person that is doing the household shopping for the food, clothes, gifts and the daily household operations. This also can create animosity between partners as the one is in the “dark” and feels resentment towards their partner as they manage and also spend the money.
It is never a good feeling to not know when things are being paid or how much the household costs are. It inevitably leads one partner in the relationship feeling like they are not a contributing partner in the house.
I often hear couples say they have to ask for an ‘allowance’ or whether there is money for gas. They want to know more about household spending. This then causes the other spouse to feel personally attacked and scrutinized which can then heat up arguments. I’ve heard couples even in my office say “If you think you can do better then feel free to manage the money”. This seems to be a typical response and unfortunately very common among households where money isn’t discussed or budgeting isn’t practiced.
Helping Couples with Financial Stress
First of all, every situation needs to be heard, and they are not all the same. However, when I sit with clients there are a few main things I will discuss with them when it comes to their finances:
I suggest they set up a night – which can be once a week, month or even on paydays to allow time to discuss the household finances. I encourage them to make it fun. It may still get intense and heated at times, however working together discussing expenses can help set up a system that involves both partners in new roles, working together.
I also recommend to couples to open up the communication lines, to show the other partner how to pay the bills online and how to access account information. This will allow for the other partner to be able to step in if needed and assume that role.
This will take time to develop and be required to be maintained once a budget is set. I personally like to keep it simple. Start with a daily spending log using the receipts throughout the month to see where the household monies are being spent. (Receipts show everything, and exactly what the money is being spent on)
When tracking for the first month, just spend the money as you normally would. Track it, identifying the individual categories, dates and the amounts. At the end of the first month you may notice the habits of your household. I like to refer to it as your “reality check “.
This is valuable information when you are trying to set a budget and will allow you to decide if you want to make changes. It also gives you the opportunity to see where and when money is being spent.
Often, many couples are shocked at some aspects of their spending. This can be shared or maybe one partner may want to take on the role of the budgeting, while the other partner takes the responsibility of paying the bills.
You will need to have at least 6 months of tracking to really get the picture of what your household requires in a budget. Taking the average of the 6 months, will set up your new guidelines for your budget. Use the average amounts to allow for better organization of your paycheque to accommodate your household needs.
*Please note: this is average and not exact. You will need to allow for flexibility in this area of your budget. A simple way that I suggest is to use the guideline developed. When you have money left over at the end of the month, start a cushion/nest egg fund to allow for the months you need more than the guideline amount.
By tracking the spending both partners see where the money is going. This can open up communication between each other and the feeling that both of you are contributing towards the household financial management.
Bank accounts are always a touchy subject with couples. “Should we have a joint account or separate accounts?” is always a question I am asked. In short, either will work. It depends on your understanding and how you set up household ‘systems’ that work for both of you.
I do recommend separating your money using either “bill money” and” day to day spending”. You can do this by having multiple accounts if you prefer – the debit card for your spending, or just by using the cash system.
Having a communication binder can also be a great way of setting up systems for the household finances. In the binder, set it up so that it has the 12 month dividers. Place in each month’s calendar – daily tracking sheets and any non automatic payment invoices (payments you have to make on your own through online payments or cash).
In the back of the binder, I would have a page protector or envelope to store any receipts that you are keeping for items like big ticketed purchases, household appliances or clothing that may need to be returned. Have a log sheet that will identify the item where it was bought and when.
- On the monthly calendar, write in when your pay periods are and when your bill payments are due (this will give a great visual of what is happening financially and when)
- Daily tracking sheet – once logged, you do not need to keep the receipts as this may create more work going through receipts that are not needed. Only keep receipts for items that would potentially need to be returned for warrantee or gift items etc.
- Non-automatic payment invoices – by adding this it will save some time should you need to follow up with payments made. Write on the invoice when the payment was made the amount paid and if online, put the confirmation number.
I encourage all couples to be open in their communication with each other about their finances, and both parties should help manage their household finances together. Not only to help avoid the arguments, but to never have one of them in the “dark” or feeling like they are not a part of the family budget.
If the finances were solely on one person and that person could no longer manage the finances because they have passed on or the relationship ended – how would this affect the other partner? Definitely not the best position to be in, and it can be avoided.
Managing household finances is a task for both partners in a relationship and should not be hidden. This isn’t a fixed solution to arguments about finances, however it will certainly help keep things in perspective for what is worth arguing about instead of the small stuff. Financial stress is very real and harder when you are doing it alone.
Open the communication, share the responsibility of budgeting and bring the family together. I see it as a win-win situation.
If you would like help managing your finances, we can help. Give us a call at 1-888-371-8900 or contact us to set up a phone consultation at no cost.