Most people don’t marry for money but marriage is more than a romantic arrangement.  Fewer partnerships would end in divorce if the people involved would think more objectively about their finances and how they will handle them together.  You really should be working together as a team.

That means treating your marriage like a business:

  • Have a plan.  A successful business has a business plan that includes its goals for the future and how they will be achieved.  Married partners should also agree on goals and craft a plan together.
  • Have a Chief Financial Officer (CFO).  Have one person in charge of the day-to-day financial details such as paying the bills and monitoring accounts to stay on track.  Usually one person is more comfortable with these duties and it reduces the chances of bills being unpaid or other important details slipping through the cracks because one of you thought the other was handling it.
  • Review regularly.  Public businesses give details of their financial situations quarterly and have a comprehensive annual report.  It’s also important for couples to regularly review their finances together.  Honesty about financial matters is crucial.  Do you hide your purchases, have a secret bank account or neglect to tell your partner about a raise in pay?

You don’t have to have the exact same approach to money.  Some people are spenders and some are savers and usually they attract each other.  Our personalities, how we were raised and our life experiences shape how we think about and deal with money.  You have to be willing to listen to each other and make compromises to find a system that works best for you both.  Don’t assume that everything will simply fall into place.

Basic banking

Some couples maintain separate bank accounts and divide up the bills.  Some open a joint chequing account for bills and have their own separate accounts, and some people merge everything together into both names.  You need to figure out what works best for you.

Spending decisions

Most couples don’t want to debate every $10 purchase.  On the other hand you’ll want some say in a large purchase.  You don’t want to be surprised by a Ferrari in the driveway when you get home from work.

Work out a budget together for how much to spend on groceries, clothes and household items.  Decide on personal allowances.  My husband will spend everything in his wallet regardless of the amount, so he gets a pittance for his allowance.

Paying bills

Will you contribute equally toward your expenses or proportionate with your incomes?  (This, of course, assumes a two-income household.)  It’s more efficient to make one person responsible for most money matters but the other partner should not be left in the dark.  If something happens to your CFO, you’re going to need to step in and take over.

It’s important for married couples to review their finances together every few months with an overall review each year to prepare a net worth statement and budget for the following year.

Even if the non-CFO has absolutely no interest in financial matters, they at least need to know where to find important information such as bank accounts, passwords and insurance documents should something happen to their partner.

A workable plan can help head off a lot of money conflicts.  The time you spend taking care of these issues is an important investment in your marriage.

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12 Comments

  1. krantcents on September 29, 2011 at 8:35 am

    Hmmm! I never realized that I do many of your suggestions. I guess I run our marriage like a business. The rewards are worth it. We keep our expenses low and we can travel overseas every other year. We enjoy life, but only do what we determine is important to us.

  2. Canadian Personal Finance on September 29, 2011 at 10:19 am

    I agree with your statements. I think our family runs ours like a co-op. We both have access to the financial data (spreadsheet with all our account information) and we each have an equal share in financial decisions.

    • Boomer on October 1, 2011 at 2:39 pm

      @Canadian Personal Finance: Do you have one person responsible for paying monthly bills or do you take turns?

      • Canadian Personal Finance on October 1, 2011 at 9:52 pm

        We actually have everything automated but every month we do a review on our receipts to see where we could cut back and our business projections and revenue.

  3. Michelle on September 29, 2011 at 6:51 pm

    Great tips, I guess we run our relationship like a business also.

  4. The Wealthy Canadian on October 1, 2011 at 1:00 pm

    My wife and I are an excellent team.

    Although I do the bulk of our bills and investment decisions, she is involved in a lot of the broad-based decisions. I do a monthly net worth statement and cash flow statement like clockwork.

    My wife is also the designated ‘coupon-clipper’ and seeks out deals for groceries. I admire the fact that she has always been responsible with her money. Just the other day, we headed to Old Navy to buy some clothes for our baby and she hauled out two coupons. She said, “you pay for these articles and I’ll pay for these”. By making separate purchases, we were able to get two free articles of clothing for our baby.

    Every weekend, we allocate time to discuss our finances. I don’t want to imagine where we would be if we weren’t on the same page in terms of long-range planning. I know of couples in which one spouse is a die-hard “spend it all or we’ll die” type, and it’s sad to see splurging to the extreme.

    Great post!

    • Canadian Personal Finance on October 1, 2011 at 10:24 pm

      @Wealthy Canadian

      Great to see your family both does well with finances. We both challenge one another to see how we can save even more.

      I agree with the importance of being on the same page for finance.

  5. Boomer on October 1, 2011 at 2:42 pm

    @Wealth Canadian: It’s good to see that you and your wife make such a good team financially speaking. I hope you realize that you are probably in the minority as many couples are on opposite sides when it comes to spending & saving.

  6. Jean on October 2, 2011 at 6:15 am

    Good post. Marriage is indeed like a business in so many ways. Both members should participate as equally as possible in financial matters. It’s good to be as transparent as possible to each other with the day to day expenditures too, so there are never any surprises, like you said.

    -Jean

  7. Caroline Hanna on October 4, 2011 at 11:28 pm

    Great post…I just wrote something similar like this but got the advice from my mom when I was young around the dinner table (you know the been there done that) type of advice. Thanks for posting!

  8. Mike on October 5, 2011 at 4:54 am

    Good suggestion about reviewing all expenditures together / not hiding purchases. I heard a term the other day for the first time on Dave Ramsey – “financial infidelity”. Very destructive to a marriage.

  9. UltimateSmartMoney on October 13, 2011 at 5:22 pm

    I firmly believe married couples should join their bank accounts. They say having separate accounts is better in case of divorce. I say don’t plan for an easy divorce. Make it difficult so that you think twice about getting divorce. Don’t you agree?

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