Planning With Your Spouse

3.5 minute read

Financial problems are the number one cause of marital discord and divorce in this country. This statistic could be improved through better communication and planning. When two people aren’t on the same page, have different goals, or no goals, there will be problems. Resentment, bitterness and revenge simmer and boil over into irreconcilable differences. In my opinion the solution is simple, yet requires consistent effort.

In most couples there’s usually a numbers-oriented person – the detailed, analytic. They will drive the household finances, but should not exclude the other person.

For what it’s worth, here’s our approach to planning. We utilize two key sessions:

Monthly budget meeting – 

As you’ve probably guessed, I’m the money nerd and data junkie in our house. My steps:

  • Daily: Mint software to track our purchases. Requires 5 minutes a day. I link Mint to all accounts and cards to import transactions. And ensure transactions are categorized correctly.
  • Monthly: export transactions to Excel to save expenditure category totals
  • Monthly: Sarah and I meet. We grab our beverage of choice and try to make it enjoyable. I present the prior month’s category expenses and we recall large transactions. A big impact is in comparing prior month’s expenses vs. multi-year average for a given category.

We discuss next month’s objectives – for example, keep food expenditures under $1200 because we spent $1500 last month. Or plan for large upcoming expenditures like travel. 

This data is ripe for gamification, making the entire process fun for me. You find imbalances. For example, if you’re spending 20% of your expenditures on entertainment consistently, this warrants investigation. Or you spend equally on eating out and groceries, might indicate an inefficiency. Or it might be an area you value spending on, but at least you know what you’re spending and can adjust as needed.

Quarterly Update-

We started this a couple years ago and it increases the gamification to another level. Think of the Quarterly Update as a financial scoreboard. As you progress through the quarters, years and decades you should observe net worth improvement. If you’re not, you should make some adjustments. 

Your net worth is a simple equation – assets minus liabilities. It can be a great motivator, to review where you were last quarter, or a few years ago. Here you see compounding interest at work.

It provides a scoring mechanism whether your immediate goal is debt reduction or asset appreciation as both impact your net worth.

Seeing net worth change has helped me realize the value in getting your army of dollar bills growing early to compound. And low interest rate debt, such as a 3% mortgage, might not be as detrimental as I previously thought. As long as low interest rates don’t entice you to buy homes or vehicles beyond your means.

Every quarter we meet for an update. I pull all the account balances into our spreadsheet and through formulas the scorecard updates. It separates retirement and short term assets less  debts. It includes a % to FI calculation (which includes an adjustment for planned SS benefits) and a chart showing the net worth increase over time with the quarterly data points. I point out highlights. She reviews and we move on. That’s Ok! It took me a while but I finally realized that other people like my wife might not share my zeal for data and personal finance. These planning sessions involve both and it strikes a chord with me; it doesn’t for her. But, it’s important to keep the other person updated. I’ve talked to many people over the years that don’t share this info and it causes relationship problems. Going back to the intro, a lack of personal finance communication will cause: resentment, bitterness and eventually revenge. Often, the damage is sadly irreconcilable. Don’t become a statistic. Value your partner. If you’re the money nerd (I assume because you’ve read this far, you are) and they’re not, that’s ok. Do the heavy lifting when it comes to the data gathering and execution, but keep your spouse involved in the planning, dreaming and scorekeeping.

Keep it regular and keep it fun.

For the resources mentioned in this post:

Monthly Expenses Spreadsheet – the sheet we use for our monthly budget meetings – highlights when you’re higher or lower than your average in a category. 
Net Worth Statement – a few years ago I downloaded this template created by Fritz at the Retirement Manifesto. We’ve been updating it quarterly ever since.

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