Marriage and Money: Fighting Over Finances? Try This Approach

Whether he’s frustrated with her shopping sprees, or she’s angry about the money he spent on the night out with the guys, when it comes to marriage and money, power struggles are an endless cause of conflict.

It doesn’t have to be this way. A few simple changes can bring peace and harmony to the discussions that you and your spouse have about finances.

The downside: harmony when it comes to marriage and money, although entirely possible, doesn’t leave room for one spouse to hold the purse strings. You have to approach things from a partnership view; after all, isn’t that what marriage is all about?

David Rosenthal, a financial advisor and principal with Wealth Management Solutions in Scottsdale, AZ, has a solution that creates a true financial partnership with your significant other, while allowing each of you to spend money without feeling guilty, or asking for permission.
Here are the basics:

1. Create a household account. All income earned gets deposited here. All household bills are paid from this account. In addition, any joint activities are financed with this account. Dinner together, new furniture, family ski trip: these types of purchases all come from the household account.

2. Determine the approximate amount of money left over each month after household bills and joint activities are paid for. Divide this amount in half, and direct deposit it into individual accounts, one for each spouse, every month. This is their money, to do with as they please. New shoes, drinks with the boys, spa treatment: these types of purchase all come out of each person’s individual account.
This system is simple, yet effective in that it accomplishes several things:

• Eliminates power struggles over who makes more money. As the family income increases, everyone benefits.
• Eliminates arguments over personal spending. If she has to have a $400 blouse, as long as it doesn’t come out of the household account, that’s fine. If he wants the latest tech gadget, it’s no questions asked.
• Provides built in incentives for both parties to control household spending and communicate over major household purchases.
• Creates a true sense of partnership by leveling the playing field.

Each spouse has their own unique strengths they bring to the marriage. When one spouse holds all the financial strings and dolls out an allowance, it doesn’t foster an environment of equality. Neither does nitpicking at each other over shopping habits.

As Dave Rosenthal says, “As an adult, nobody wants to have to justify their purchases. This simple system allows both parties to maintain their financial independence.”

If you’re not ready to commit to true equality, you can also divide funds into the individual accounts according to a percentage of earnings. If you’re the breadwinner of the family, this approach may feel more comfortable to you.

The downside: it doesn’t create a true partnership, nor is it 100% equal. It may however, be a good way to take a small step forward toward finding a marriage and money system that works for you.

Contributed by Dana M. Anspach, CFP®, About.com Guide to Money Over 55. Visit www.moneyover55.about.com to sign up for Dana’s newsletter.

Technorati Tags: Fighting, management, marriage, marriage & money management, money, money management