Couples and Money

Creating Money Transparency in a Relationship

Creating Money Transparency in Relationships | www.TheHeavyPurse.comOne area that couples frequently struggle with is discussing money. It’s a topic that was unlikely openly talked about in many homes, which makes it harder for couples to create a money system for themselves. Our parents may have even had a great system but because they never discussed it, we assume money just automatically falls into place. While that’s certainly possible, the reality is it takes a bit of work and negotiation, but it’s worth the effort.

Money Transparency Isn’t Money Micromanagement

I firmly believe money needs to be transparent in a relationship, but at the same time, nobody likes feeling as though big brother is watching and every purchase is put under a microscope and open to judgement. This is where clarity and systems will become your new best friends.

Most people don’t want to ask “permission” from their partner to buy small things, like a cup of coffee, a pack of gum or to go out for lunch with a friend or co-worker. This is completely understandable. However, you still need to have a system in place where you can:

  1. Comfortably spend without needing to “report” back to your partner
  2. Stay within budget

This way no one gets the dreaded “denied card” message when they try to buy something or need to hide purchases.

Agree on the Big Purchases Together

Most of us would automatically agree that big purchases should be made together. Sadly, not everyone even agrees what a big purchase is! Set a dollar amount so you both know when you need to get approval from the other before purchasing an item. You both must agree to this and abide by the rules you set.

If you think the amount is too high or low or still feel micromanaged, don’t let those feeling fester and turn into resentment. Be honest and share why. Sometimes we’ve only had to be accountable to ourselves for a long time, and it can be hard to adjust from a “me” to “we” mindset. Other times we hold some childhood scars of watching parents fight over money that may make us either too passive or too aggressive. Be open, honest and supportive of one another. You will figure it out.

The Little Things Do Add Up

This is probably where most couples struggle. You want your money to be transparent but again you don’t want to have call your spouse or partner and let them know you just bought a cup coffee. Most likely, they also don’t want you to call and tell them that exciting news either. 🙂 However, those little $5-10 expenses we feel are inconsequential in the moment, do add up over time.

Let’s say, you both spend on average $5 a day or a total of $310 a month on little things such as coffee, gum, a magazine, etc. When you consider $310, it becomes a much more robust number than $5, which didn’t seem like a really big deal. Again, $310 may be a reasonable number or you may be astonished to see you spend so much on little things. The power is knowing how you’re spending your money, so you can make adjustments, if needed.

Set Aside Some Fun Money

Start by reviewing where your money goes. Once you pay all your bills, including money for savings/investments, groceries, gas and entertainment, then take a look at your remaining discretionary income and set an amount so each person has as an allowance or fun money. This is the money each of you can choose to spend however you see fit. You don’t need to get permission first nor should you have to hide anything you buy with it either.

Whatever the amount you choose, it just needs to be accounted for within your budget, so you both can spend that amount without worrying that you’re overspending and creating debt or putting the other one in the awkward position of having their card denied. Again, if you’re uncomfortable with the amount, talk about it. Those little things we buy can mean a lot to us and it can initially be hard to give up. I find those who struggle with this often don’t have shared couple goals. If you have something you’re working towards together, it’s much easier to give-up once treasured purchases because you’re working towards something bigger and more important. Even better, you don’t feel deprived or any resentment towards changing your spending habits.

Financial Infidelity Is Often Unintentional but Still Hurtful

While there are definitely people who commit financial infidelity with malice, most of the time it occurs accidentally because we simply don’t have a system in place. There is no absolute right system, but the one that works best for you. It will take a little trial and error but don’t give-up. Some may think this is completely unromantic and a relationship killer. I disagree. This is a relationship strengthener. Get on the same page now, so you don’t spend most of your time arguing about money later as so many couples do. You may be surprised by how bonding these kinds of conversations really are and it’s a wonderful example to set for your children.

Shannon

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Comments

  1. Monday, March 3rd, 2014
    My wife and I pretty much now all the purchases we make even if we don't ask each other beforehand (though we often do, even with smaller purchases). Our monthly income/expense spreadsheet really helps with that as we have all our income/expenses laid out so it's easy to review where our money goes. Definitely helps us limit mis-communication!
    • Shannon
      Monday, March 3rd, 2014
      Yes, having a monthly spreadsheet or some way to track expenses really helps you see where you spend your money and keeps you both accountable. It's great that you and Victoria are on the same page and so open to discussing your finances. It definitely helps you limit any miscommunication and avoid hurt feelings.
  2. Monday, March 3rd, 2014
    Solid post Shannon and I could not agree more! That transparency issue is so vital in order to make sure both parties are on the same page and fighting the same battle. We don't have a hard and fast limit, but I'd say it's in the $100 range before needing to discuss purchase and beyond that we make all big decisions together. Plus, working from home helps out in this area a lot. :)
    • Shannon
      Monday, March 3rd, 2014
      It's amazing how many couples are inadvertently working against each other because they don't have open communication regarding how they use their money. It sounds like you and Nicole have a system in place that works for you and working from home together probably does make it a bit easier too!
  3. Kathy
    Monday, March 3rd, 2014
    Both partners absolutely need to be on the same page regarding spending. My husband and I don't need to discuss everything we buy, because we each know how the other feels about certain things. We certainly don't need to ask permission to buy anything but we always tell the other when we did. That way, if one of us bought a pair of jeans or a book and put it on the credit card, the other isn't surprised when the bill arrives and payment is already planned for. I fear many couples are working against each other instead of together which in my opinion is pure selfishness.
    • Shannon
      Monday, March 3rd, 2014
      Yes, I agree Kathy. Too many couples are working against each other and many of them don't even realize it. They wonder why they argue about money and money tension exists. Money transparency and open communication is so important. People may think it's strange to talk over purchases with each other first, but it's a great sign of excellent communication and less friction over money between couples.
  4. Monday, March 3rd, 2014
    Great post Shannon! I know that people think it is debilitating to have to tell their partner about every purchase, but staying within a "spending" budget in total is something that anyone should agree to and should want to live within for the success of your financial team. I often "negotiate" with clients that if the person who needs the spending budget stays below that budget, then they can use what is remaining for "fun." It makes it a more positive conversation than just telling them what they can't do.
    • Shannon
      Monday, March 3rd, 2014
      Yes, some people find it emasculating or humiliating to tell their partner what they bought or be held to a budget. But if you don't communicate what you buy or know how much you can comfortably spend - it makes it incredibly hard to avoid creating unnecessary debt and stress. thinking about what you're working towards together does change the tone of the conversation into something positive.
  5. Monday, March 3rd, 2014
    I was at a food and wine event over the weekend, and I wanted to buy some BBQ sauces. It was only $12, but I asked my wife if she was OK with it. Partially because she was standing right next to me, but the other part was simply out of respect for her and our process. The money is ours, and unless we have a prearranged agreement in place I want her to know (and vice versa) where the money is going.
    • Shannon
      Monday, March 3rd, 2014
      It's wonderful that you and Vonnie had a good system in place and communicate so well. I know how hard the two of you worked to eliminate your debt. I love the attitude that it's "our" money. Some couples really struggle with this and that "we" and "our" attitude really makes a huge difference. Being on the same page is so important.
  6. Monday, March 3rd, 2014
    Very good tips Shannon!
    Your point about agreeing on big purchases but not asking permission every time you spend 5 bucks reminded me of a guy I worked with before I got married. He and his wife had an agreement that they had to phone each other every time one of them wanted to spend more than $50. I was young and my first thought was how weird is that. You earn the money and you have to ask permission to spend it? They both had good jobs, but that was their way of staying on budget, and once I got married, it made perfect sense to me too.
    • Shannon
      Monday, March 3rd, 2014
      Yes, it can seem strange to check-in with your spouse but when you don't communicate - it's very hard to know where your money is going and how much is even still in the bank account! I think because it does seem odd and sometimes oft-putting is why some couples don't set-up some sort of system. It's always interesting how things that seem so weird at one time now feel very natural! LOL!
  7. Monday, March 3rd, 2014
    Awesome article!
    My husband and I don't really sweat the small purchases too much. One of the things that we've learned to really enjoy talking about are our "No Spend Days". It's not so much a report-back, but a celebration of doing (or not doing) the small things with our money that can add up in the long run. As a general rule, we do tend to talk about all purchases above $200. This way, we are on the same page when it comes to all the things that can contribute to our budget. I agree, financial infidelity (or lying by omission) can be a relationship-killer if you let it!
    • Shannon
      Monday, March 3rd, 2014
      Love the "no spend days" and the fact that you and your husband are doing great job communicating and getting on the same page. It's so important and it really makes a difference in your relationship. Money conversation can be such a source of stress for couples, but if you can figure out your systems early and commit to open, supportive communication, then money conversations are fun! And yes, financial infidelity can truly wreak havoc on a marriage.
  8. Monday, March 3rd, 2014
    My partner is all about the little things. I hate making him feel he has to 'report' to me but often we need that in order to stay within budget. He has a fun allowance of his own - don't ask don't tell - but too often he still uses our joint card for other random purchases and those $5 bucks here and there a few times a week adds up fast over a month.
    • Shannon
      Monday, March 3rd, 2014
      Those $5 expenses do add over time, even though they seem inconsequential in the moment. They can make it hard for you to stay on budget. It's good that he has you to keep him on track! :)
  9. Monday, March 3rd, 2014
    If you can't be on the same page financially, you won't understand each other's decisions on many things. The earlier you start working on this the better! They say if you are arguing about money, you are really arguing about who has the power in the relationship. That's not a helpful way to look at it at all. Set your goals together and the steps to achieve them.
    • Shannon
      Monday, March 3rd, 2014
      Great point, Maggie. Lots of time money arguments are about power, or more specifically an imbalance of power. It's really important that couples see themselves as equal partners regarding how money is spent, regardless of who makes more. I agree the earlier you figure out your systems and get on the same page financially - the better. Less time arguing and more time enjoying your relationship!
  10. Monday, March 3rd, 2014
    I would reiterate that it's way less awkward to spend time setting up these money boundaries in a relationship than to deal with the built up anger that surprises you after months or years of not understanding the others' spending habits. Just have the conversations now and avoid all the mess!
    • Shannon
      Monday, March 3rd, 2014
      I agree 100%! Some people avoid the conversation because they are afraid to cause a fuss or potentially start an argument. But it's always better to work through this now and remind each other to keep communication open and supportive.
  11. Monday, March 3rd, 2014
    Hi Shannon,

    You've shared some great tips. I especially like the one about agreeing on big purchases.

    We always check with each other at the end of the week to make sure we're balance out and not kick out account into overdraft :).

    Thanks for sharing these tips with us. Such a touchy subject but it has to be talked about.

    Have a great new week!
    • Shannon
      Monday, March 3rd, 2014
      It really can be a touchy subject for some couples, which is why I'm sure so many avoid it. They don't know how to bring it up without starting an argument. So unfortunate. It's great that you and your husband don't fall into the group and are able to talk to one another about how you're using your money!
  12. Monday, March 3rd, 2014
    We used to have a really hard time with that because we did not have any sort of budget or system in place and we didn't talk about it. Now, we each have a personal allowance. Honestly, after getting out of debt, it's so much easier to not want to spend money for the most part. Not paying attention is the worst thing you can do, but micromanaging can really throw salt into the wounds if you are in a bad financial mess and looking for someone to blame. Communication really does solve most financial problems.
    • Shannon
      Monday, March 3rd, 2014
      It's a common problem, Kim. Many couples think they are doing okay with setting up a system but upon closer examination - most found out that they are not as in sync as they think they are. I agree - not having system or micromanaging - can cause problems. It's always the best to communicate in a open and supportive manner. Money conversations can become heated but you have to remember that you're working to create a life together, not against each other.
  13. Tuesday, March 4th, 2014
    We are very open about money, and it really helps our relationship (and business). Jocelyn and I are Copreneurs and work together in our business, so we have to be on the same page!
    -
    We are also ALWAYS discussing money with our kids. Like you said in your post, our parents probably had good systems but never let us in on the secret! I want my kids to understand money as they grow up and let them avoid the mistakes we made when we were young!
    -
    Also, in good times and bad, you have to agree that money will never cause relationship problems in your marriage. In fact, if money problems come (and they will) you have to pull together even more!
    -
    Very good post. Thanks for sharing!

    Shane & Jocelyn
    Flipped Lifestyle
    • Shannon
      Wednesday, March 5th, 2014
      Love it, Shane! It's always great to see couples who work well together AND are openly teaching their kids about money. Many parents do have good systems and behaviors and habits around money but they never share them with their kids. It's so important we do so and engage in regular conversations on how we choose to use our money. I know my girls always enjoy these talks (because I don't make them lectures!) and I'm sure your kids do as well. Yes, money problems and issues will occur no matter what but having a strong marriage with open communication makes it much easier to work through the issues when they arise.
  14. Tuesday, March 4th, 2014
    My wife and I didn't really communicate much about money...we have similar spending habits and are both frugal. And while we briefly created a budget, we didn't track our spending. It didn't seem like a problem as we just trust each other, but over time, some issues would come up. It definitely is better to have conversations about financial issues regularly. We really need to work on doing that more often. Thanks for the reminder!
    • Shannon
      Wednesday, March 5th, 2014
      It's definitely important to have regular conversations around money to make sure you both remain on the same page. Even couples with similar money philosophies and great trust in one another can run into the occasional problem. The good news is they are in an excellent position and mindset to tackle the problem and not let it fester.
  15. Tuesday, March 4th, 2014
    I feel fortunate that my husband still feels like a poor college student at heart. I know he knows that he earns real money deep down, but his spending pattern hasn't changed since he was a poor college kid working at a pizza joint. Bless his heart =)
    • Shannon
      Wednesday, March 5th, 2014
      LOL! You two are a good pair. :) Both frugal but you make sure he doesn't forget to enjoy his money too!
  16. Tuesday, March 4th, 2014
    I agree with you on the importance of transparency both in terms of a spending limit (where you have to check with each other if a purchase is a certain amount) and within budget. I think those little expenses can for sure add up to more and then some, so it's important to look at those "leaks." We've had pretty frequent money conversations lately, sometimes small and others big, and I feel it really helps with our accountability and reminding ourselves of our bigger goals!
    • Shannon
      Wednesday, March 5th, 2014
      Those little expenses can add up quickly even though in the moment they don't seem like a big deal. But they can eat up a large portion of your budget if you're not mindful and lead to some pretty big arguments too. :) It's great that you and B are starting married life right and having lots of good conversations to keep you on the same page.
  17. Tuesday, March 4th, 2014
    I think you're spot on about not trying to micromanage each other. That's something I actually personally struggle with and try to remind myself all the time. It's much more productive to get the big things in place and let each other have the freedom to figure out the nuances. We all have different methods and one isn't necessarily better than another. As long as you can stay on track with your goals, it's all good.
    • Shannon
      Wednesday, March 5th, 2014
      I agree - as long as you figure out some system to keep you on track - that's all that matters. It can be difficult at times to find that right balance where you're keeping each other informed without crossing the line into micromanagement. It's particular difficult if one partner tends to be more of a spender or not a big fan of budgets. That's when it's important to focus on goals and the life you want to create together as motivation to stay on track!
  18. Tuesday, March 4th, 2014
    I totally agree with you Shannon. My wife and I have been incredibly open about money since the beginning of our relationship, so it is really helpful to us now. We're usually on the same page, and if we aren't we know we can talk to each other honestly and openly. After seeing how many couples divorce due to financial reasons, I realized I wasn't going to be one of them. That, IMHO, is such a needless reason to split up, since it is a problem with a relatively easy remedy.
    • Shannon
      Wednesday, March 5th, 2014
      It's great that you and your wife have always been open about money with each other. It really does make a huge difference. It's always sad when I work with couples going through a divorce. It's why I stress so hard the importance of open, honest and SUPPORTIVE communication. Sometimes people are scared these kind of talks will make them argue but I find they actually bring you much closer.
  19. Wednesday, March 5th, 2014
    I think the other hard part of this discussion is at what point in the relationship do you come to this agreement? I've been dating my boyfriend for a year and a half and while we talk openly about money, I don't really feel it's my place to tell him how he should and shouldn't spend his money specifically.
    • Shannon
      Wednesday, March 5th, 2014
      Very true! It's not easy to figure out the right time to blend money or when you can start sharing your thoughts on how the other one uses their money. Generally before you start living together and sharing expenses, you want to start put some type of system in place and understand who is responsible for what.
    • Blaze
      Friday, March 7th, 2014
      Knowing what I know now, if I could advise someone just starting out, it would be to choose a partner with similar long term goals. If you aspire to live within well within orbelow your means, save aggressively and retire early, then you are setting yourself up for aggravation or hearache if you fall for someone whose dreams involve big mortgages, car payments and being trapped working until 65 to pay off all the self-inflicted debt. Neither dream is right or wrong, just very different.

      Sure it's not romantic, you'd rather fall head over heals for the person who catches your eye for any number of reasons. But trying to change each other's nature and get on the same page with life goals after you've fallen in love is not going to be easy. My grandmother used to say, there are lots of wonderful people in the world to fall in love with. Do yourself a favor and fall for someone who's already in sync with you on the major things. In marriage there are enough little compromises to be made, but starting out feeling you'll both need to change significantly is a recipe for disaster.

      When you meet someone new, sure it's nice if they have a great sense of humour, treat you with respect etc etc. You know all the common things you look for in a potential partner. Personally, they'd also need to have their financial house in order and clear priorities about the kind of life they want. In my case we married young and didn't have any sort of plan formulated, but fortunately we came from similar backgrounds, so we inadvertently had similar views on money management. We were more lucky rather than clever in choosing each other. After a few decades of marriage I can now recognize how important that has been, and hope to instill that in our kids.
    • Shannon Ryan
      Friday, March 7th, 2014
      Having similar values and money philosophies with your partner does make life so much easier. You don't have to see eye-to-eye on everything but the same core values is a necessity. And when you do have different views with how to use your money, then you need to work extra hard to find that common ground where you can work together to use your money wisely. People don't always think about whether they are financial match (and not talking about salary but core beliefs) and it is something that needs to be considered too. Otherwise money can quickly become a source of great marital strain.
  20. Wednesday, March 5th, 2014
    It really is amazing how little costs add up. I never used to know where my money went because I thought I was only buying a coffee here or there but when I looked at my spending closely, I was spending too much. Same for the hubby. I think the idea of an allocated amount for 'fun money' would work well for couples and that should avoid feeling 'monitored' too much!
    • Shannon
      Wednesday, March 5th, 2014
      Yes, those little things do add quickly. It's one of the first things people notice when they start tracking their spending. They never realized they spent so much on "little" things that they never thought twice about. Each couple knowing how much money they have to spend alleviates a lot of stress.
  21. Wednesday, March 5th, 2014
    Good post Shannon! So many couples are not on the same page when it comes to finances :(
    • Shannon
      Wednesday, March 5th, 2014
      Thanks, Mackenzie! Yes, it's sad how many couples do not talk about money and are not on the same page with how they want use it.
  22. Thursday, March 6th, 2014
    Great post! We have our main account joint and that helps us to keep us transparent as well. If there are any small purchases that we don't want to 'report' back to each other (especially for gifts and that), we just use our personal credit cards. We don't check each other's credit statements. I trust her and she has to have some fun money for herself as well. Now obviously there's something wrong if a big credit card bill comes out of the account, but so far that's never happened. It's important to always be open and honest about any big purchases.
    • Shannon Ryan
      Friday, March 7th, 2014
      Yes, these days with online banking it is much harder to hide purchases, although people certainly still do it unfortunately. Transparency is always the best and it sounds like you and your wife have a system that works well for you. And even more importantly—trust one another too.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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