They’ve paid off $25,000 in debt with only one income. They answered these questions.
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Marriages are built on trust. If you haven’t figured out where your money is going, that trust is not complete. Every couple needs to address money issues in order to have complete trust. Money fights contribute to divorce. A study done by Kansas State University reports that arguments about money are the top predictor for divorce.
The way you were taught to respect the power and trust that comes with money, affects every aspect of your life.
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Women tend to worry. We don’t want to worry so much about money. Just like you, we’re better caretakers when we aren’t concerned about being able to pay the bills. We want more confidence in the future, more stability in what we can do together. By answering these questions openly, you can help us gain that.
I know how important this is. At the end of 2013, we were over $57,000 in debt, having a strained relationship because neither of us wanted to really talk about it, and wondering how we would ever get out. We made a goal to pay off $5,000 of our credit card debt the next year. Then we got serious. We talked about things we didn’t want to talk about. We figured out a way that works for us. We started dreaming. In 2014, we paid off over $25,000 of debt and are working hard to make the rest a thing of the past.
Spouses need to understand what you really think about money and how to use it. When you talk about money, you are really talking about the future. Discuss these five questions with your sweetheart and watch the trust increase today—and in the future—in your relationship.
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1. What were you taught about money?
Money is related to power. The way you were taught to respect the power and trust that comes with money, affects every aspect of your life. Explain how you were taught to manage money to your partner. Some parents raise their children to never ask about money. Other families choose to include their children in the family budget meetings, so they are involved in the entire process of money management. Most of us were raised somewhere in between.
You may have had an allowance. “Work hard for your money,” may have been your family’s mantra. Did you just ask for twenty bucks when it was time to go to the movies with friends or did you earn it on your own? Get honest with your partner about what you were taught about money. You can work through the issues together.
2. How do we really get out of debt?
The average American household has $15,000 of credit card debt alone. Of those American families in debt, one out of three are in collections. So, sure, you want to get out of debt, but how exactly? Credit cards, student loans, car payments and medical bills can create a mess. It’s time to get organized. Knowing where your debt is coming from gives you a chance to create order. Your family needs a plan.
Decide the best strategy for your family to tackle the debt. Here’s what your wife really wants to tell you, it’s okay to say, “I don’t know.” Working together is the best plan. You could follow the money gurus on the radio, work a debt snowball, pay it all off by keeping the same job and working loads of overtime. You could add more risk with a new job, or trying a new business to create more income. Would it be better for your family if the at-home partner went to work part-time? There are possibilities to make this happen, but only once a plan is in place. Work together to have that trust in place.
3. What’s our policy on spending? (And not just on the big things.)
Couples get in debt because they haven’t made good decisions. Establish the framework for what you will and will not spend money on. Part of that is setting limits. You need transportation to get to work—you don’t need the luxury car of the year. You need food, but you don’t need to eat out several times a week. Set the number of times you can go out to eat each month. Declare an actual number, not just the amount you can spend. Together, set the number of how much each of you are allowed to spend on the fun things.
Creating a budget doesn’t have to be painful. Some couples use just a few guidelines to get the spending on track, and determine where both parties understand the limits. You can have a frothy, caffeinated beverage every day. Just set the limits so you both know what the daily spending number is. Don’t worry, you will change that number regularly as your needs change. But the clarity only comes once you have discussed it and set your guidelines.
4. What is your goal with money? What is our goal with money?
Most couples are in financial trouble, not because they have different goals, but because they have none. Ask questions of each other and set your goals. Decide together when you will buy a house. Determine when to buy another car. Dream together and plan that vacation you’ve always wanted. Talk it over. Agree to merge bank accounts for more accountability, even if it’s just for a while. The choice is yours, just agree together.
Once you have set your goal with money—be it a house, a new car, retirement savings, or a big, fancy vacation—it’s easier to work towards it because you see that goal. You have made it real with creating a plan. But that will never happen until you have the conversation about money.
5. What will teach our children about money?
Children may be in your future, discuss the guidelines you will use to teach them about money. Think about when you will start to talk about money. Determine if you will set an allowance and savings account—so they are set up with a strong foundation. This is a gift they will remember their entire lives.
This brings a level of trust in the relationship you haven’t yet experienced.
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Remember to discuss the little things, like: How much does the tooth fairy pay out? (Note: if you got a quarter, and she received ten bucks, there could be a problem later.) Set a price range for children’s gifts. The more decisions you make together as a couple now, the more consistent you’ll be later in minimizing unnecessary conflict from lack of communication on money.
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Bonus question: If you die, what happens to me financially?
Most women want to know the answer to this question. Talk about it. Take steps to prepare for the worst. It’s hard to think about, let alone discuss. Get renter’s insurance while you’re in a temporary apartment. Once you have the conversation, trust increases. It’s difficult. No couple wants to talk about this, but once you do, you’ll be so glad you did.
Money isn’t the only cause of divorce, but it is a contributor. When you take the time to have these conversations, answer difficult questions, and determine together your best course of action, you will both understand your plan better. You will appreciate your partner even more. This brings a level of trust in the relationship you haven’t yet experienced.
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Photo: Flickr/ smile_kerry
I spent sixteen years in a relationship in which my partner looked after ALL the money matters. Through the entire time I had the higher income and both of us worked full time through the entire relationship. She was a bookkeeper who, as she would say, “loves mucking ’round with money”. My interests tended to be a bit more esoteric. We are long separated but I would still trust her even now if we had joint finances. She proved her integrity time and again.