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How To Manage Finances In A Marriage

In this blog, we’ve discussed strategies for couples to consider when combining accounts, and we’ve discussed how couples should approach budgeting. What we haven’t discussed, though, is how to manage finances in a marriage once you have your accounts and your budget set up.

In this article, we’ll discuss my four-part Monthly Money Meeting process to help you and your spouse manage your money together quickly and efficiently. Best of all, this process should only take you about twenty minutes per month!

(If you’d prefer to listen to this article, you can get a podcast version of this post here: Money and Marriage Podcast Episode 147 – How to Manage Finances in a Marriage.)

It’s (Usually) OK for One Spouse to Do Most of the Financial Management Tasks for Your Family

It’s very normal for one spouse to be much more financially “hands-on” than the other.

If you (or your spouse) like to manage your accounts more than the other, that’s not necessarily a bad thing! In fact, I often recommend that one spouse take the lead in executing the family’s financial management tasks.

However, there are two caveats to this guidance. To learn how to manage finances in a marriage well, you need to do two things if you’re going to delegate the money management tasks to one spouse:

  • Both spouses need to be aware of what’s happening financially. In other words, it’s OK for one spouse to do most of the financial management work, but you should always make sure your spouse is aware of what’s happening.
  • Both spouses get an equal vote in any financial decisions that need to be made. Delegating paying the bills and making transfers between accounts is very different than delegating financial decisions. Whenever you have a big financial choice to make, you and your spouse need to come to an agreement on this decision together.

The good news is that the Monthly Money Meeting process described below will allow one spouse to take the reins in executing financial tasks while also making sure that the other spouse is aware of what’s happening and is involved in financial decisions.

Managing Finances in a Marriage Shouldn’t Be Cumbersome

Part of the reason the Monthly Money Meeting works so well is that it happens frequently enough that you’re both aware of the state of your finances but not so frequently that it becomes overwhelming.

The other reason it is so effective is because the Monthly Money Meeting is very structured. You’re not just setting aside twenty minutes per month to talk about whatever comes to mind when it comes to your finances. Rather, I recommend that your Monthly Money Meeting follow a four-part process (with some pre-work to complete ahead of time):

This graphic is from Chapter 15 of my book, Marriage-Centered Money: Get on the Same Financial Page and Achieve Your Life Goals Together. Grab your copy for 50% off here!

Each of the four main steps should take about five minutes to complete, leaving you with a twenty-minute Monthly Money Meeting in total.

It might take you a few months to get used to the structure and be able to actually complete everything in twenty minutes, but stick with it, and you’ll see progress in how to manage finances in a marriage.

By staying focused on covering the right things in your Monthly Money Meeting, you can efficiently improve the way you communicate about money in your marriage. Here’s how to approach each step:

Pre-Work

It’s important to have an organized game plan going into your Monthly Money Meeting to make the best use of your time and to be able to quickly identify what’s going well (and what needs improvement). Therefore, I recommend that either you or your spouse take a few minutes ahead of the meeting to get organized.

There are three primary tasks to complete before going into your first Monthly Money Meeting.

First, you and your spouse should set a time to have your Monthly Money Meeting each month. These conversations don’t just happen naturally; you need to be proactive about putting them in your calendar. Usually, I find that setting a recurring meeting time on the first day or two of each month in the evenings (after the kids go to bed—if you have them) works best.

The second thing to do before the meeting begins is to gather your financial data from the previous month so you can review your progress over the past thirty days with your spouse during the meeting. If you use a budgeting app or account aggregator, it should be easy to pull together all the information on where your money went for the month. Otherwise, you’ll want to gather your bank and credit card statements for the month so you can review your income and expenses in full for the prior month.

Finally, I recommend bringing a pen and a piece of blank paper to the meeting. Ideally, you’ll have a notebook that you use for all your Monthly Money Meetings so you will stay organized and be able to see your progress over time. You certainly can use a digital note-taking app for how to manage finances in a marriage, but I find there is something about using a literal piece of paper and pen that helps the information stick better over time.

Part 1: Celebrate

Too often, when it comes to personal finance, we focus disproportionately on what’s going wrong. Whenever I ask couples what’s on their mind when it comes to finances, it’s always something bad. Even after we achieve financial goals or are making progress on big goals we have in front of us, we typically focus on the next challenge we see down the road.

This can create real problems for couples. By focusing solely on the challenges you’re facing rather than what’s going right, you are by definition setting yourselves up to only communicate about the challenging parts of your financial picture, which is inevitably going to increase the amount of time you spend stressed and fighting about money.

So, I recommend you take a few minutes at the beginning of your Monthly Money Meeting to celebrate what’s going well.

For your first Monthly Money Meeting, take five minutes and acknowledge/appreciate what you’re doing right as a family when it comes to money in general. For subsequent meetings, you should focus on what you’ve accomplished over the past thirty days since your last meeting.

No accomplishment is too small. Take a few minutes to celebrate what’s going well! And don’t be afraid to write a bullet-point list of the items that come up in this part of the conversation at the top of your piece of paper.

To be clear: this is not one of those “power of positive thinking,” “fake it ‘till you make it” type of exercises. There is nothing that puts me in a worse mood than pretending things are in good shape when they clearly aren’t. You should not be lying to yourselves during this exercise.

But I’m also willing to bet if you actually pause for five minutes and think about what you’re doing right financially, you’ll be surprised at how many things come up that you really are doing a good job with. So, take a few minutes to celebrate your wins together.

Part 2: Review

Part of a good Monthly Money Meeting involves reviewing your progress over the past month. After you’re done celebrating your wins, it’s time to take a few minutes to review how you did the previous month.

There is one—and only one—metric you should focus on in this context: how much you saved last month. That’s it.

This should sound familiar if you read our article on budgeting for couples. You create the budget so that you have your monthly savings target, which you’re going to track in your Monthly Money Meeting.

No digging into the individual transactions yet. No judgment on how big or how small the savings number was. Just pull together the information, confirm how much you saved last month, and write it down on your piece of paper.

(Note: I count making extra debt payments as “savings”, since extra debt payments build your net worth just like saving does. If you’re paying extra on your debt, count this as savings!)

If this is your first Monthly Money Meeting, that’s all you need to do for now. You now have your baseline monthly savings rate. That’s good enough—no going through the individual transactions, no shame, no blame. You are ready to move on to Part 3.

For subsequent Monthly Money Meetings, you should compare the amount you saved to the target you set for yourselves during your last Monthly Money Meeting (see Part 3 below).

Did you save as much as you intended? Did you save more? Or did you miss your target?

Here’s the fun part: if you hit or exceeded your savings target for the month, you should move on to Part 3. If you’re saving as much as you need to save, there is absolutely no point in reviewing your spending line item by line item. Unless you’re doing a quick review to make sure there weren’t any fraudulent charges (which isn’t a bad idea), you and your spouse should not dissect who spent money on what. You’ve hit your savings targets that you agreed to as a team. What you do with the rest of the money does not matter.

The only time you should be digging through your historical transactions is if you spent more than you agreed to during your last Monthly Money Meeting. If you didn’t hit your savings targets, I recommend taking a few minutes to determine the cause.

Part 3: Clarify

Once you’re done looking backward at the month that’s passed, it’s time to look forward to the month ahead. Where do you want your money to go this month?

Once again, your monthly savings rate is the only number you should track on a monthly basis. In focusing on this one metric, you will be focusing on the number one key to making financial progress that is in your control. This is a crucial component in how to manage finances in a marriage.

To set your monthly savings target, you should start with how much you saved last month or the number that’s in your budget. Even if you’re not satisfied with how much you saved last month, use your previous month’s savings rate as a starting point for the discussion. The most important thing in setting your savings target for this month is to make sure that it’s actually attainable. I’d rather have you set a savings target of $1,000 this month and hit that savings target than have you set a savings target of $5,000 only to find out the target wasn’t realistic.

You should then make a few different adjustments to this number to come up with your savings target for the month ahead.

We all know that some months are different from others. Maybe you had an unexpected car repair last month that set you back $750. Unless you’re expecting another $750 repair bill this month, you should adjust your savings target from what happened last month based on what you expect to happen this month. In that scenario, you’d take the savings target you calculated by looking at how much you saved last month and add $750 to it. Since the $750 was spent last month but (probably) won’t be spent again this month, you can add the $750 to your expected savings target for the current month.

Of course, this works both ways. Think through what expenses you know you’re going to have this month that you didn’t have last month, and make sure to adjust your savings target accordingly. It’s always better to identify these uneven expenses in advance to prepare ahead of time to make sure you’re setting the right targets for yourselves.

At the end of the day, the most important piece in how to manage finances in a marriage is to agree on your savings target for the month—together. You both should leave the Monthly Money Meeting knowing what your savings goal is for the month, agreeing that the goal is feasible, and committing you’ll do your best to hit the target over the next thirty days.

Over the years, I’ve noticed that the couples who consistently have the most success hitting their monthly savings targets treat this process of setting their monthly goal very seriously. This isn’t just an exercise where you’re going through the motions to check it off your monthly to-do list; you should treat this as a serious commitment you are making to each other.

As a sign of this commitment, I recommend you write down your savings target for the month at the bottom of your piece of paper. And I wouldn’t stop there—the couples who have the most success implementing this routine literally sign and date the piece of paper right below the monthly savings target.

Physically signing the document helps cement the promise you are making to each other.

Does this mean you’re breaking your vows to one another if you mess up during the month and fall short of your target? Of course not. Does this mean your marriage isn’t going to be successful—financially or otherwise—if something comes up over the course of the month and you aren’t able to save as much as you promised to one another? Absolutely not.

All you are promising is to work in good faith to do what you need to do in order to hit the savings target. You’re promising to commit to the process and do your best to hit your goals. Things can and will happen—that’s normal, and it’s a part of the process. Just stay committed to working together, month in and month out, and you might be surprised at how much progress you will make.

Part 4: Momentum

Before wrapping up your Monthly Money Meeting, you should take one step together to help make your goal a reality.

Making financial progress in your marriage is all about momentum. You’ve accomplished a lot in the first fifteen minutes of your meeting. You’ve celebrated your successes, reviewed the previous month’s information, and set your goals for this month. Now, it’s time to give yourself some momentum for the month ahead.

Look at the monthly savings target you wrote down on your piece of paper. What’s one thing you and your spouse could do right now to help you hit this goal?

It doesn’t need to be a huge step, nor should it be something that takes a lot of time. In the next few minutes, what’s one thing you could do to help make your goal for the month ahead a reality?

For some of you, this will involve paying off your credit cards from last month, so you’re starting the month with a clean slate. (It’s hard to meet your savings targets when you’re still paying for last month’s stuff!) It could also involve adjusting some recurring expenses, scheduling automatic transfers into your savings accounts, or setting up some time on your calendar to monitor your progress in the month ahead.

By taking an immediate step to help make your goal for the month a reality, you’ll dramatically increase your chances of hitting your target. Take that first step toward hitting your goal before you wrap up your Monthly Money Meeting.

It Can Take a Few Months to Develop a Rhythm for How to Manage Finances in a Marriage

Do your best to follow the Monthly Money Meeting process for a few months. It usually takes a couple of months for you to get into a rhythm, hone in your monthly savings targets, and feel like you’re making progress.

Block off twenty minutes or so at the beginning of each month to review your finances together with your spouse. And if you need help getting the process started or want someone to act as a facilitator to your Monthly Money Meeting, you can book a free breakthrough session with me whenever you’re ready.

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