Let’s get on the same page as our spouse!

If you are wondering, this is not a blog post on counseling families on marital issues and no, I have not changed the scope of this blog in the new year :). So what does getting on the same page as your spouse refer to in a personal finance blog? This article talks about getting on the same page on your financial decisions with your spouse. 

Why is this even important?

Let me start with the obvious and I am going to cite 3 different points here to explain why. 

1. One of the leading causes of divorce in America is financial issues or ‘money issues’ as stated by the Institute for Divorce Financial Analysts shown here. I did not know there was an institute dedicated to this but apparently it’s a big deal. So I guess the first reason is – if you want to keep your marriage, you really want to be on the same page as your spouse.
2. In the ‘Millionaire next door’ by Thomas Stanley, one of the principles he highlights is to marry someone who shares your financial values. He says if you end up having a spouse who decides to spend too much or simply wants to spend on things that you disagree with, then it is going to result in marital distress and be a major impediment in your path to creating wealth. Said differently, being on the same page with your spouse can be an important part of creating wealth. 
3. Finally, this recent article on Jim Cramer was very interesting for me. Those who don’t know who Jim Cramer is, he is a TV host who hosts the show ‘Mad Money’ on CNBC who talks about investing and is a former hedge fund manager. You can read more about him here. Now, I am not a big follower or fan of Jim Cramer but this article really hit home for me. THE Jim Cramer who espouses the stock market basically cut down his asset allocation of 90% in the stock market to 50%! The rest of the 50% is in cash! Now, most people at the age of 65 would be looking to reduce their risk to the stock market but 50% in cash felt extreme. His reason – he wanted to be on the same page with his wife and ensure she can sleep better at night. So let’s just say you don’t need to just take my word for it – even Jim Cramer seems to feel that way. 

So what does being on the same page financially with your spouse even mean?

First off, being on the same page from my perspective involves a bit of a shared vision on what you want financially. You and your spouse need to agree on broad financial goals. This is probably the foundation and the most important. Do you and your spouse want to keep working till you are 60 or beyond? Do you want to retire early? If you have children, do you want to save for their college? Do you both want to give money to charity? Alternatively, maybe you both decide financial goals are nonsense and want to just live life king size and not worry about the future (not my approach and I would have totally not been compatible with someone like that). Maybe you won’t agree on every single goal but at least some broad ones. 

Second, once you agree on your goals, then you discuss the path to achieve these goals. There are many ways to do this. Rather than get super specific, it’s about agreeing philosophically how we get there. A lot of times this is not an intentional process but just happens automatically. If it happens in a way that works out, good for you. Do you believe working a W2 job and both spouses working is the best way to generate income or do you both believe entrepreneurship is the way to go? Do you want to follow a very frugal and minimalist lifestyle? Or do you want a lifestyle that gives you certain comforts and pleasures? These are super high level questions and certainly things to get aligned on. 

But beyond the above 2 high level pieces, it’s very natural to disagree on specifics. Maybe you want to buy something that you feel has a specific purpose but your spouse thinks it’s a waste of money. My wife and I don’t agree on a number of such small things. But we have kept some boundaries – items that cost beyond a certain amount or that push our monthly expenses above a certain amount we have to discuss and agree on. Items that are smaller – while we may openly disagree or express our opinions, we have simply agreed on the maxim – it’s none of each other’s business :). Now, this is all hugely personal – each couple has to figure out their sweet spot and approach. But the point I am trying to make is to be intentional and talk through it. (I think I sounded like a marital counselor for a moment there 🙂

Ultimately, like everything in life – both of you are likely going to need to compromise in some areas. I will tell you why Jim Cramer’s story resonated so much with me. I will share a personal story of mine. For years, my wife and I lived in a modestly priced townhome which was perfect for our family and we did not need a ton of space. In fact, we loved not having to do lawn and snow care (the HOA took care of it). But my wife grew up in a large family back home in India and was constantly used to having a lot of people come over and hang out in the house. One of the challenges we had in the townhome was that we noticed it got a bit uncomfortable when we invited more than a certain number of people. Kids birthday parties had to be done in the nearby public parks. She started feeling strongly about the idea of having more space to host people, and having more kids come over to play. I resisted the idea for years because I felt it would a) set us back on our financial goals and b) I would appear a hypocrite to my own ideology that I had in the last year publicly made known through this blog.  But I came to realize that a) my wife made some good points and irrespective of whether I completely agreed with them or not, it was important to acknowledge her opinion and more importantly, I did not want either of us to have regrets later in life and b) I always say personal finance is personal. So that means you have to do the things that make sense for you. If you have the financial wherewithal and can be responsible, then you should feel free to spend the money on the things that matter. So based on that, my wife and I made the big decision to buy a bigger, more expensive, single family home in Nov 2021. We went into the decision eyes wide open, fully understanding all the financial implications. Our family loves our new home and are enjoying it so far. As for me in particular, despite all my misgivings, I don’t regret the decision and am appreciating the extra space. I relate this story to explain the point that compromises will need to be made but both of you need to be comfortable with it, otherwise it will likely brew resentment. 

How do we get on the same page?

I am going to offer some simple, practical suggestions here. Know that you have to personalize them and can choose to do whatever makes sense to you.

• Get a financial advisor and make sure both of you get engaged with your advisor at the same time – a financial advisor is the equivalent of a marital counselor for your finances. He/she can provide advice and a good one will start by asking about your goals. This is a neutral third party who can provide feedback without any emotions involved. Your financial advisor is probably not going to tell you not to buy that expensive suit or whatever. But he/she might tell you that you need to save $X each month to achieve your goals and one way to do that is to figure out how to reduce your expenses. 
• Talk to friends you trust – sometimes what can be more impactful beyond a financial advisor is to talk to a friend who you think has knowledge about the specific topic and you can trust. Maybe you want to invest in something and if you have a friend who has a lot of experience investing in it, talk to him/her about it together. You can both experience the same information flow. 
• Have a regular cadence of reviewing your finances together. Some people have special date nights to talk about finances! If that sounds like a terrible idea to you, you can figure out the best way to talk through it. Once a month, I take some time to walk my wife through our monthly income and expenditures. Now, it’s a different thing that everytime i open my spreadsheet and start talking about finances with my wife, she starts yawning 🙂 So I clearly need to do a better job of this. 
• Make a budget together – A lot of folks hate budgets and I don’t really believe in detailed budgets but I do believe it has a time and a place and for some people. A budget may truly be the way to ensure some folks keep their expenses in line. What I personally like to do is to have a high level budget for the year and each month on an average. I also specifically budget for high level categories. Now that works well for us but as I said, each family has to decide the best approach. My wife does a good job with this. When we have specific occasions like a birthday party, she always talks about spending no more than a certain amount of money and we work to stay within that budget.
• Be fully transparent with each other – Some families decide to create a joint bank account for common family expenses and maintain separate bank accounts for their individual personal expenses. Some folks will simply put all expenses on one spouse’s bank account and move the other spouses’ money into a joint savings account. You can do it whichever way you want. But whatever you do, make sure both spouses have access to all accounts as much as practical. Financial infidelity is a leading cause of marital stress so the more transparent you can be, the better. 
• Work extra hard to ensure both partners have a certain level of financial literacy – admittedly, this is a challenge for me. In my family, I am clearly the one who has more knowledge on our finances and takes the lead on all things financial. But it is a never ending journey for me to ensure my wife is financially literate and understands where exactly all our money goes. Over dependence on a spouse is a common challenge and god forbid, if that spouse passes away or the couple divorces, the other spouse gets overwhelmed and completely at a loss. It is not only healthy but extremely important to get both partners in a relationship to a minimum level of financial literacy especially about their own finances. 

Concluding comments

Ultimately, people marry or get into relationships to find joy and meaning in their life. Money needs to enable that and not be the reason to hinder that. As I always say, money cannot buy happiness but the lack of it can cause a lot of unhappiness. Done right, there is joy and a sense of accomplishment in going on this financial journey together with your partner. My hope is this article provides some perspectives and suggestions on ways to go about doing that.

Thank you for reading and I wish you luck on your joint financial journey!

Disclaimer: I am not a financial advisor and all the information in my articles are from my personal experience and are for informational and educational purposes only. Please consult with a financial advisor or CPA for professional advice.