8. Money and spouse: team work or war?

How are you? Have you started implementing what you have been learning in this course? You have already done half of the lessons and learned the main tools to manage money: tracking, planning (budgeting), listing future expenses (commitments and projects) and how much to save for them, prioritising expenses and setting spending limits, minimising risks… all these tools help us manage ourselves by setting limits and reminders, showing us what we have done and where to go. 

We could stop here… but there is one big challenge: we are not alone to manage money. In the second part of this course, we are going to look at money and others… spouse who spends with different priorities, children who cry to get toys, relatives who need support, neighbours, community, city, country… we’ll widen the circle one at a time and this will help us understand the world of finance in part 3 and topics such as investing, retirement and banking: money is a social tool.
Let’s start with the smallest circle: family – and especially spouses. If you are not married yet, read this lesson as “prevention”… and if you are already married, read it as a “cure”!

From hostility to cooperation: war vs. team work 

• Arguing about money is frequent, in all families, everywhere, rich or poor. It can go from unspoken resentment, to a few remarks, to frequent arguments, even domestic violence, and divorce (it would be one of the two major reasons for divorce in the USA).  These arguments create negative feelings between spouses and impact children, and make things worse!
• No coordination: spouses take decisions or buy things without consulting each other which can be a waste of money… and also lead to arguments; or one spouse manages all the money questions, but if this person leaves or deceases, the remaining spouse has no clue about the family’s financial issues, especially if the person who left was the only or main breadwinner in the family.
• Mistrust: is a huge silent issue. Spouses don’t trust each other about money, creating resentment and spoiling the relationship and the peace of the home.
• Different money management styles: it is very typical that both spouses have different spending pattern, and different habits and values depending on their family background. So maybe you have started implementing this course, and your spouse doesn’t want to track, or thinks a budget is a waste of time…
• Different incomes: sometimes the spouse with a lower or no income feels being “worthless” or despised:  value has a lot more to do than money – and the contribution to family well-being is not measured by the salary – a spouse with a smaller salary or no salary may be a major well-being contributor.
• Financial abuse: in extreme cases, one spouse has all the financial power (income, spending decision) and uses it to mistreat the other.

Your homework:
Does this sound familiar? Before clicking on the second part, audit your family financial situation – not the financial one, but the soft skills:

• Who takes financial decisions?
• Do you trust your spouse?
• Do you argue with money?
• What do you argue about?

Each of the spouses can audit the situation separately first then share your findings to each other… if your views are very different, this will also be the place to start with! If you agree on the audit, work together on improving how you manage your finance together.

Knowing Your Rights and Responsibilities:

Another fundamental point is to find out about the applicable law in your case (your country, or place of residence if you live abroad). If you are married, for example, what does the law say about the property rights of each spouse’s money, before and during the marriage: are assets considered joint property or separate property? What about debts: do they bind both spouses or only the one who incurred the debt? Do you need to draw up a prenuptial agreement? These points can completely change the financial situation of the spouses, particularly at the end of the marriage (death, divorce, etc.), so learn your rights and responsibilities. Similarly, if you are cohabiting, what are the consequences: are you as well protected as in a marriage? All these questions deserve careful consideration!

Let’s put this into practise

Let’s focus on fairness, communication, team work and wills.

1. Fairness: Fairness starts at home, with those whom you love and live with.
2. Communication: What do you think of these sentences?
   • You’re hopeless with money. 
   • A new phone – what a waste of money! 
   • You spend too much on stupid things!
   • It’s your fault! You keep buying new clothes!
     
   • The school fee is due in 3 months, we still need to save 300 a month. Could we cut back on going out?
   • Are they facts or judgments? They voice an opinion and they blame. The main step towards building peace in your financial discussions is to move from judgments to facts. This is not easy because money is emotional and talking to our spouse is emotional… so talking about money to our spouse is very emotional: all kinds of feelings get in the way: guilt, power, resentment, fear of losing face, jealousy, greed… 
     • Prepare your discussion: Check your facts: you “feel” your spouse spent too much, or you fear you won’t be able to pay for the rent, or you would like to support a family member. Our brain is better at emotions than maths and easily distorts facts… so double check your numbers first. Be positive: try to identify several possible solutions: don’t be “problem-minded” but “solution-minded”. Then, set your goal:  what do you want to obtain from this discussion?
     • Choose the right moment: we are not always available mentally or emotionally to discuss tough things… so don’t rush and find a moment where your spouse has time and is in an open mood.
     • During the discussion: breathe, stick to facts, smile, stay calm, don’t get angry or cry. Don’t say no to everything; listen and respect your spouse’s point of view. Work together on common solutions – the one you have prepared and the ones your spouse suggests. Whenever blame or judgments sneak in, take on you to shift back the discussion on facts and finding a solution. Focusing on facts help go beyond the emotions and build a constructive dialogue which will help find solutions. If the discussion becomes too emotional, stop and find a better moment later.
     • Nurture good communication: sadly in some families, money is the main…and only topic. Create a peaceful and warm atmosphere where communication on other topics is valued and enjoyed as positive moments. This will also make financial discussions easier.
3. Team work :
   • Set the example: if you don’t manage your money, don’t expect others to do it either. Go back to the first seven lessons and implement them in your life as much as you can!
   • Share the work and burden: Discuss how to share the expenses (who pays what – make sure each spouse has one bill in her/his name as proof of address). Take a ‘professional’ approach to money management as co-workers being assigned a team work and being both accountable for it. This will also set an example to your children, later when they get married. If one is better with numbers and spreadsheets, assign the budget to her/him. Or if one has more time, assign the expense tracking and dealing with bills (payment, filing them) to her/him.
   • Track to make sure both of you are on the same page and avoid mistrust. Tracking expenses is the best way to defuse arguments based on preconceptions: stick to facts.
   • Share information: set moments where information is shared and important decisions taken together. Decide on one meeting a month to look at spending priorities and review your family budget. If there are some personal expenses you do not want to disclose (for example you are saving for a personal project), decide on what is part of the family budget and what is kept as personal budget. Make sure your filing system (where your important papers are) is clear and accessible for both of you.
   • Decide together: work together on goals and budget. Discuss how to achieve goals. Set spending priorities as family.
4. Wills: Be kind to your family: prepare what nobody can avoid: passing away.
   • Put your papers in order: have documents to prove your ownership of all important assets (land, house, bank accounts, investments, share in businesses…) as well as documents for all your debts if any… and even small ones. Tell your spouse where they are. Keep them safe (as long as diplomas, birth certificates…). You can also scan them and keep them on a flash drive in a separate (and safe) location (in case your home is damaged). Dealing with the grief of losing one’s spouse is even worse when the living one has to struggle with proving they own their house, or finding out debts they didn’t know about, or cannot make sense of all the papers left in a stack. Besides, in such difficult moments, the brain may not be ready to take sensible decisions and may also be easier victims for ‘benevolent’ helpers who will profit from the situation and rip them off.
   • Prepare your will: inquire on your national inheritance law and what applies to your spouse legally (how will your property and debts be dealt with and shared, spouse’s common and personal properties, what will your spouse legally inherit). If you are the breadwinner, think of how your spouse (and children at charge) will survive financially without your support and identify solutions. Write your will accordingly and have it kept in a secure place where it will be found (with a lawyer, or trusted friend or relative…).
   • Discuss the unavoidable: of all the things that will happen to us, death is the only sure one – but also the least discussed one. So practice sensible non emotional discussion and go through the papers and what to do, with your spouse, once at least, then do some updates if any are needed.

Action plan:

1. Discuss with your spouse how you can work together on your family finance (prepare your discussion first).
2. List your family goals together, and write and discuss your family budget.
3. Find the best way to share the important pieces of information and papers.
4. Make sure that all your important papers are in order (especially property deeds, debts contracts…) and both you and your spouse know where they are. Update them if circumstances change. Have a trusted third person – scan them.
5. Write your will.