There are many common myths embraced by couples concerning marriage and money, especially when one or both of you are a practicing physician with your own rigorous financial goals and standards. You’ve probably developed your own personal finance management system to accommodate your needs but remember, your partner has their own set of practices to consider as well.
While these personal tendencies can exist without issue when you’re single, they can easily become points of tension once you’re married. It is likely you’ve experienced some of these tensions in your own marriage and have been unaware of the root cause. Keep in mind, that until you are able to recognize these tensions and are willing to discuss them with your partner, financial conflict may occur more often than you’d like. To get started, and ultimately avoid this tension, you must first understand where your money management tendencies originated. This will help you determine which practices you may have that lead to inefficiency and how to fix them.
Whether you like it or not, your perspective on money and how to manage it is learned from the people or resources around you. If your parents were very frugal, for example, then you’ve probably learned some saving behaviors from them. As you grew into adulthood and started taking on more financial responsibilities, you likely started from the base practices you learned from your parents to manage your finances and then these methods evolved over time as your needs changed. Such behaviors can be conscious or subconscious, which is why money can cause so many issues within a marriage. In general, people don’t have much control over subconscious behavior until they are able to recognize the reason behind why they are making particular decisions.
Below, we will be discussing 4 tips to help combat the most common misconceptions or missteps that couples practice within their financial relationship. They all focus on the concept of consolidation and managing money from one location to create an efficient strategy that will help you and your partner accomplish your joint goals. Keep in mind that we’ve merely highlighted a few best practices below and some of these may not provide the best solution to the issues you and your partner face. With that being said, take a look at these four tips to improve your financial marriage.
Many couples have picked up the message early on from their parents or grandparents that it is best to operate out of one joint checking account. However, with many individuals having lived as adults prior to getting married, this can often be an unnecessary point of tension. There is no one right way or one right number of checking accounts, other than whatever helps you develop a clear, understandable way of paying bills and accomplishing your goals.
With this being said, while many people are still opting for the multiple checking accounts approach to manage finances for different purposes, one central checking account to pay all the bills and handle all the savings is still an easier option. This makes it much easier to figure out and track your spending. Whatever path you decide, the end goal is to clarify your account status for you and your partner alike. Pick a method that makes sense to both of you, if you have a consistent method, then you will likely avoid tension surrounding this issue.
While it’s NOT necessary to combine all your checking accounts, it is definitely beneficial to consolidate your marriage finances into one bank. It is common to see couples with accounts for 2, 3, or 4 different banks where they’ve opened accounts over the years. This results in a lot of inefficiencies with fees, tax forms, and transferring money around. While it may be a pain to update auto drafting bills, setting up all of your accounts in one bank is worth the initial inconvenience, as it will make you much more efficient with your money management. Additionally, it makes it easier to simply know how much money you have in your accounts at any given time as you will be able to access them all from one location.
When you’re single, keeping up with 2 or 3 credit cards is manageable. However, consider how many existing credit cards your partner brings to the table, are you willing to potentially keep up with paying off 5 or more? What a headache! In most situations, you will be well-served to keep no more than 1 credit card each. Pick the one with the best points, rewards, or terms and then close the others out. This way you’ll minimize fees and the risk of a pesky balance going unnoticed and impacting your credit score. This may also help you and your partner to limit your spending, be more mindful of the set credit limit (as there is only one to track), and ultimately simplify the payoff process.
While you and your partner have your own jobs, skills, and personalities, it’s not ideal to keep your financial goals separate. After all, didn’t you get married to chase your dreams together? Make a consolidated list of your goals and then prioritize them together. This way you’ll both understand and agree on what to do with your money year by year, and know that your decisions align with your long-term goals.
There are many misconceptions when it comes to managing your money with your spouse and unfortunately, the world of marriage finances is not cut and dry. Financial incompatibility has been one of the most common reasons for divorce since the dawn of time. That is why it is important for you to regularly engage in open and honest conversations with your spouse to ensure financial alignment and, ultimately, keep a happy marriage. Once you talk through your issues and recognize the cause of tensions in your money life, you can decide what works best for you as a couple.
While there are best practices for financial planning, there is no one right answer and every couple has a unique situation with many variables to consider. Hopefully, understanding a few of the most common financial misconceptions and best practices to simplify your issues can help you solve financial conflicts now and in the future.
Specializing in the financial planning needs of medical professionals, our mission at Spaugh Dameron Tenny is to help you make smart financial decisions that will ultimately help you achieve your goals. We firmly believe in the value our in-depth services can provide, as annual financial planning allows you the opportunity to formally review your goals, make any updates (if needed) and evaluate your progress along the way. If you’ve got some tips or money life hacks that have been helpful in your relationship, drop us a line! Contact us today at (704)-557-9750 to learn more about how we can help you.
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Shane Tenny is the managing partner of Spaugh Dameron Tenny. Along with hosting the Prosperous Doc® podcast, Shane has a true passion for behavioral finance, helping clients and audiences understand how to develop successful strategies based on their unique temperaments. An accomplished and highly engaging speaker, Shane is regularly interviewed for television and podcasts, is actively involved in the Financial Planning Association®, and contributes to industry advisory boards.
