Posted over 9 years ago

Newly Married? Some Money Lessons Learned

as asked recently to give my Top Ten list of financial advice for newlyweds. I am about to round the corner on my third year of marriage. Some things we’ve learned by doing, and some things we’ve learned by not doing (the hard way).

Want other opinions? I have listed a few other resources at the base of the article.

#1 DISCUSS YOUR SHORT-TERM AND LONG-TERM FINANCIAL GOALS.

I can’t say enough for this one. It had to be the start of the list. The result of this discussion(s) should be written down. It should be constantly referenced. It should be the starting point for all future money talks in your marriage. Without shared goals and vision, you’ll run around putting money towards whatever’s latest and loudest (via David Allen). Some things we do:

Goals are available in a Google document.
Goals are reviewed on a weekly basis, this is encouraging.
We attach specific dollar amounts to our goals. For instance, it’s better to save up for a fixed downpayment amount, than to save with no target.
Measure the goals. Did you hit your target this month? Why or why not? Is the goal unrealistic? Unchallenging?
Make adjustments as needed, but not to suit your laziness or lack of motivation.

#2 UNIFY YOUR BUDGET.

Unifying accounts is a choice different for each couple. Regardless, shared expenses dictate an agreed understanding into what you should spend on different kinds of items (rent, travel, furniture). We have decided to unify all of our accounts. We have found great joy and efficiency in the spending/investing accountability and wisdom we provide to one another. Goal setting is easier, because we both know exactly what’s going on at all times. Some things we do:

Agree on a monthly budget amount.
Pay ourselves a joint bonus of $300 at the end of the month, if we hit our budget.
Carry monthly deficits in our budget. A fat month in May is a lean month in June.
Go shopping together. We spend time together and understand what the other person needs.

#3 DISCUSS DEPENDENTS, AND THEIR FINANCIAL IMPACT.

Kids, Dogs, Cats, Fish... whether you already have them or not, eventually one or many of them will cost money. Do you agree on when and how to use that money? We are shocked and amazed by friends who never talked about these critical issues before taking on one or many dependent lives. Know what your partner thinks about these things. Be willing to act on that knowlege. Some things we do:

Talk about kids, all the time. Even though we don’t have any, yet.
Agree upon a pet policy (no pets for us, tough in NYC).
Watch other people’s children and learn from that experience.
Talk with parents about their budgets, learn where to plan or where can do better.
Talk about items way down-the-line. Our children’s college support is an active discussion in our home.

#4 MAKE YOUR HIGH-COST ITEMS KNOWN.

It blows my mind how many people are shocked when they look at their spouse's bar tab, coffee receipt, or shopping charges. Know where your partner is likely to spend money. Don't get mad at them, they clearly value it. Just find a way to factor it in. Remit Sethi is very big on paying for the things you truly value, and losing all the rest. Some things we do:

Talk about upcoming lifestyle expenses at the beginning of the month (buying shoes, bachelor party for friend, etc.)
Include a great meal in all of our trips, but don’t go overboard for every meal.
Choose a substitute when things are tighter. Drink at home, make coffee yourself, rent a nice dress for a friend’s wedding.
Take days off, good for your mental agility as well. You don’t need to drink or eat out and about every day. Shopping can be once every couple of weeks (or less).

#5 NO SECRETS.

Even though you and your spouse may disagree on certain items (campaign contributions come to mind), they should still be out in the open. You need to be free to talk about where your money goes. If your opinion and interest is not valued, there could be a larger problem. We’ve seen dysfunction in marriage when hobbies, investments, subscriptions, or even food are not agreed upon. Some things we do:

Every account flows into our mint.com dashboard. Other than cash, it’s hard to mask a transaction.
Never give the other person too hard of a time (unless it’s really bad, there are limits). Be supportive, and understand why they fell for that expense at the time.
Just be honest. It’s hard, but it’s healthy.

#6 TALK ABOUT MONEY.

Seems like a no brainer, but tons of couples mess this up. Keep each other accountable, make it a regular, non-taboo topic. We have check-ins. Flights, car, and train rides are great for this. Some things we do:

Talk over dinner. If you have an investment idea you can’t share, it’s probably not very good.
Send each other articles on different ideas or investments. We read these over lunch or on the train.
Talk with friends about money. For some people this is uncomfortable, for others, it’s a good chance to let your guard down and be frank about your ideas. You also learn things.
Encourage each other rewarding great decisions or successful snap judgements (specifically financial)

#7 PLAY TO YOUR STRENGTHS AND IDENTIFY YOUR WEAKNESSES.

My wife is an accountant, she is amazing at running our budget numbers and making cost estimates for our future plans. I would not attempt to do this any better, I listen to her. Some other things we do:

I run the stock investments. I tend to be more interested in this, and I have built up more knowledge in the market.
She does a great deal of analysis for real estate and bigger-budget transactions.
We both make plans based on our opinions, and we come to a nice compromise. I am a risk-on, she is conservative. Meeting in the middle works for us.
I am impatient and my wife often needs to slow me down. I know this weakness, and she helps me with it.

#8 UNIFY YOUR GIVING.

Joint and focused charity is powerful. Our money, our mission(s). When we team up on an investment, we can do more faster. Why should charity and our gift be any different? Some things we do:

We jointly serve on a board for an after school program in New Jersey (New City Kids, Paterson… shameless plug).
We talk about what we’re giving to. We annually re-evaluate, and change the amounts and distribution of our gifts.
We treat giving like investment. Donations come out of our account at the beginning of the month. We never treat the money as a potential spend source.

#9 INVEST IN YOUR RELATIONSHIP.

Couple vacations are about being together and don't need to cost $2,000 in airfare and two weeks in vacation days. Do short, fun, and cost-effective trips when you can. I grew up in Chicago, and moving to the northeast opened me up to an amazing world of regional travel (by train and bus). No matter where you live, you can do this. Some things we do:

Stay in AirBnB homes for as little as one night, if you’re only an hour away, this is easy.
Spend a Saturday in a nearby vacation spot you have never been. For us, these tend to be 2 hours away via train.
Do a house swap with friends nearby. Sometimes you’re just watching their pets, other times, they really want to trade with you and see a new neighborhood.

#10 TALK ABOUT FAMILY.

Is one partner planning to have their parents move in during retirement? Is one partner planning to help pay their brother's phone bill? Need to know these things and where each person stands. This one has been quite a learning experience for me. Perceptions on family differ greatly by culture. Don’t assume you come from the same mindset on this one. Talk to your partner and their family. Make sure you hear their expectations and plans from them. Some things we do:

Project scenarios in which either set of parents would live near us or in the same building.
Set boundaries. For me, the same unit is not okay, the same building (2-3 family) is fine.
Listen to the other person. Things you don’t understand are not wrong. Understand that your joint financial goals need to take in the other person’s preconceived notions.
Don’t assume anything.

The first time you have most of these conversations is the hardest. Start early with financial discussion (ideally before you are married). Keep it up in sickness and in health, for better or for worse.