couple

The number one cause of divorce in the United States is disagreements over money. If you want to keep your marriage in good condition regular, open financial talk must be a part of your relationship.

Arguments over money are probably such a large issue in relationship because the way you spend money shows, in an undeniable way, where your priorities really are. If you talk about how much you want to save for retirement, but actually spend money on eating out, then eating out is really your priority.

Making a budget is actually a priority setting activity — which is exactly the kind of important thing that you should be regularly doing in a relationship.

Here are the steps that Noelani and I follow at the start of each month for a successful couple finance meeting:

  1. We gather all the information about our incomes from the preceding month.
  2. 15% of our pre-tax incomes goes toward long-term savings and retirement before any other discussion. No negotiation.
  3. We estimate the month’s bills, and put that amount of money into our joint bills account. We pay the bills proportionally to our income e.g. if Noelani makes 45% of the household income, she pays 45% of the bills and I pay the remainder.
  4. We review any medium-term savings plans we have, such as travel or large joint purchases. This money is put into separate ING accounts and is also split proportionally.
  5. The money we individually have left over after our joint budgeting is our discretionary money. We can each do whatever we like with our respective remaining money without needing to consult each other. Having a little financial space of your own is important for releasing some of the pressure.

While it sounds like a hassle, it only takes us fifteen minutes to complete the steps, but that’s after the practice of years. Our first time took an entire night (mostly because estimating bills is difficult the first time through), but it gets faster with each repetition.

More important than sorting out the bills is the communication about our future, common goals. Some of the big changes we are making in our lives are the direct result of conversations we’ve started in these meetings. A couple finance meeting is a dedicated time to talk about the shape of the future you want with your partner — so make sure you get started on them if you haven’t already.

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Header photograph by neona