How to manage money can often be a huge issue between couples. In my experience, difference in personalities, attitudes about spending, and gaps in communication can often lead to huge rifts between a couple that can eventually lead to divorce. This is one of the reasons why I always insist on meeting with both members of a married couple and why I often find myself counseling couples on how to handle everyday issues regarding their finances. In this series regarding money management for couples, I want to show readers that it is possible to have a harmonious relationship with money as a couple and how to make that happen. This first article will focus on a common source of frustration between couples: spending discretion.

What to spend money on (and what not to) is quite often not something that couples readily agree on. The wife may think it’s important to take nice vacations together every year to strengthen their relationship while the husband views this as a frivolous waste of money. The husband may want to buy an expensive riding lawn mower while the wife would prefer to use that money to bolster their kids’ college savings account. The list of differences can go on and on. While it may not always be possible to agree on every expenditure, you can at least create an environment of respect and open communication that will help avoid a lot of problems. Here are a few ideas on how to do it:

Designate a Job for Every Dollar

At the beginning of the month, you and your spouse should know where all of your money is going. For example, how much will go toward groceries, entertainment, investments, and the home? Every dollar should be accounted for so there is no room for different interpretations of ‘discretionary funds’. To do this, you need to have a good budgeting tool that both you and your partner use. One of my favorite budgeting tools is YNAB (You Need a Budget), an interactive app that links to your bank accounts and can be used on the go.

Agree Ahead of Time

Being proactive is key when it comes to working out an effective spending discretion plan. Decide beforehand how you will handle certain situations that may come up. For example, if one member of the couple sees something they want to buy that isn’t in the budget, how should they handle it? Some of my clients have agreements that if the amount is less than, say, $100, they can go ahead and buy it without checking in with their partner. The important part here is to agree ahead of time what is and isn’t acceptable so there’s no room for argument later.

Use the 24-Hour Rule

Many of my clients find that using a 24-hour rule when it comes to off-budget spending is very useful. This means that if one member of the couple sees something they want to buy, they have to wait 24 hours until they can actually buy it. This allows time for that ‘impulse buy’ effect to wear off and it also gives the person time to think about the purchase and, more importantly, discuss it with their spouse. If they still want to buy it after 24 hours (and their spouse agrees), they can go ahead and make the purchase.

Financial issues don’t have to be a source of frustration or arguments between couples. When you know yourself and your significant other well, you can be understanding of differences in personality and behaviors and come up with proactive ways of managing money that works for all involved. If you’d like to learn more about creating an effective spending discretion plan, please reach out so we can chat.

Patrick Tucker, the owner of True Measure Wealth Management, has over 20 years experience in the industry and has spent the last 15 years learning the ins and outs of the fee-only advisory business. He focuses on client behaviors and what ‘wealth’ means for each individual client to provide caregiving plans that lead to a mindful fulfillment of financial goals. A lifelong learner, Patrick uses his continued knowledge to become a valued partner for his clients and help them explore the wisdom of true wealth.