---

How to manage finances in marriage is one of the biggest issues couples have to face. So, what’s the best way to manage money as a couple?

To successfully manage money as a couple you must begin by using a budget. A budget helps you know how much money is coming in the household, and how much money is being spent each month. It also tells you ‘where’ your money is going. Once you know where money is spent, you can better monitor and dictate your expenses.

Most people only track where they spent money. In other words, they only look at their budget from hindsight. They see where all the money went. But they fail to determine ahead of time where their money should go. This is backwards.

To successfully manage money, you must first get control of where it goes. You need to be the one to determine ahead of time what you should spend your money on. This helps you avoid impulsive and compulsive spending.

Dave Ramsey, the guru of money management, says ‘you either tell your money where to go, or it tells you where it went.’

So true.

A family budget is absolutely essential for managing finances in marriage.

Meet Bill and Janet

I want to introduce you to Bill and Janet. They have money problems. They both work. Have pretty good jobs. Enjoy their family and share a few special activities and hobbies together.

But they waste a lot of money. Which puts them in the red each month.

Your income statement shows whether a business is in the green, black or red. Green means you have an operating profit, black means you are around break-even and red means you don’t have enough revenue to meet operating expenses.

Bill and Janet work mostly from the ‘red.’ Which strains their relationship.

They know they need to do something about it, so they decide to change things.

We will refer back to Bill and Janet throughout this article. Their journey may be your journey. If so, you will find answers, help and hope.

Regardless if you fully identify or not, you can learn a lot from the steps they took.

How To Manage Your Finances

Perhaps the best place to begin is to make sure you are in agreement. Problems arise when there is not unity concerning money matters. When there is agreement it is easier to implement a plan to get your household finances in order.

In this article we will discuss 8 Money Mistakes Couples Make.

1. Not having a budget
2. Not being on the same page
3. Not talking about money
4. Keeping secrets about money
5. Not holding yourself accountable to the budget or promises you make
6. Not taking it serious
7. Thinking it will all work out in the end (without a plan)
8. Failure to track your money

Someone wisely said, ‘The only real mistake is the one from which we learn nothing.’

As we begin to put together a plan for our money, let’s first look at some of the common mistakes couples make.

Eight Big Mistakes Couples Make With Money

As we look at each one of these mistakes, I’ll refer back to Bill and Janet to see how they handled these issues.

Let’s dig in.

1. Not having a budget.

Everything should begin and end with a budget.

A budget is simply an estimate of income and expenses for a set period of time with designated categories.
Dave Ramsey

Simply put, a budget helps you know how much money you have each month to work with. Then determine exactly where that money should go in order for your family to operate successfully.

The problem with most couples is impulsive and compulsive spending.

By that I mean, spending that is not ‘in the budget.’

Here’s what a lot of people do. They go to the store to pick up necessary items (groceries for example). While there, they see something they want. Instead of determining if it is on the grocery list, they impulsively purchase the item (even though it is not necessary or in the budget). They spend money without first determining if they can afford it, or if they even need it.

This is compulsive and impulsive purchasing.

The grocery stores are masters at impulse marketing.

At every checkout there is a stand with miscellaneous items to entice you to purchase.

These are usually unnecessary items. They are things you add into your purchase because they look good. They appeal to your hunger, desire or cravings. Thus, they are impulse purchases.

A budget helps you avoid falling into the trap of buying things you don’t need.

How About Bill and Janet…

Bill and Janet were doing pretty good. They loved each other deeply. Shared common hobbies. And enjoyed time with their children.

One of their hobbies was golf. Janet picked up the sport when they were dating so she could spend time with Bill. She liked it because it got them both out of the house and gave them exercise.

Bill was obsessed with the sport. He didn’t just like it. He couldn’t get enough.

This is where the problem occurred. They were doing pretty good financially with both of their salaries. But they never seemed to have anything left over at the end of the month.

The reason? Primarily because Bill would impulsively buy the latest and greatest golf club that promised to shave a stroke or two off his game.

When it failed to accomplish that goal, he would eventually sell it to a buddy at a huge loss or get rid of it in a yard sale.

Janet heard about a program offered at a local church called ‘Financial Peace’ that promised to help them get out of debt, get control of their money and save for the future. She was all in.

She finally convinced Bill to attend.

The first thing they learned was to put together a budget to see where the money was going, and then to get control of their spending.

The light came on for Bill when he saw how much money he was wasting by purchasing golf products.

They eventually agreed on a monthly amount to spend on playing golf and buying ‘golf stuff.’ This pretty much ended their money arguments.

But it also helped them save money for their future.

Here’s a short video by Kallie Branciforte from But First, Coffee

Video Courtesy of Kallie from But Firs,t Coffee

Here’s the seven simple steps Kallie (and others use):

This leads me to the next point…

2. Not being on the same page.

When Bill and Janet came into agreement on what to spend their money on, and how much they would spend on hobbies, life got better.

For a couple successfully manage their money, they must be in agreement. Danger is ahead for every couple who is not in agreement financially.

This not only applies to having the same ‘money personality’ – knowing how each partner views money, spending, saving, retirement, etc. It also applies to how you do every day life together.

‘Together’ is the magic word.

I’ve seen couples who have different spending habits destroy love in their relationship because of the friction and frustration that results from stress about money.

Someone once said, ‘Anything with two heads is a freak!’ This is true when it comes to managing money.

I’m not suggesting that only one partner in the marriage controls the money. Quite the contrary. That might work for some couples, but I suggest working together as a unit (being ‘one together’) to determine how money is spent. Two heads in this scenario = two different philosophies and goals for your money.

There are great benefits from this. Working together to solve money problems will help you grow stronger in your relationship.

It builds trust, unity and appreciation in your marriage. When you work together you can both see the sacrifices each other is making to create a successful home.

Without unity, there is little chance that financial issues will run smooth.

3. Not talking about money.

There are some couple who simply refuse to discuss money.

For many years Bill and Janet just didn’t talk about the subject. Bill thought it was unnecessary. Janet didn’t want to upset Bill. Although she was constantly nervous about their finances.

She found herself nagging at times, but they would never sit down for a serious conversation to solve the problem.

Bills solution was to pick up another shift to make up the difference. This worked for a while, but eventually it ate into their family time.

Janet’s solution was to nag, drop hints, fuss and occasionally cry over money problems. This made Bill feel bad, so he would work harder.

Here’s the lesson: Sometimes the issue isn’t about working harder. It’s about living smarter.

When they attended the Financial Peace seminar and read the book, they realized by not talking about money, they were actually prolonging the problem.

One of the big steps you can take to resolve money issues is to have a discussion with your spouse.

Stop avoiding the conversation.

Not long after we moved to Colorado my business took a hit. For several months, finances dried up to a trickle. I had some recurring money each month, but ‘new’ clients weren’t coming in like I needed.

After a few months my wife asked if we could have a heart to heart conversation. Since we always discuss things openly, I agreed to hear her out.

She expressed her concern about our finances and wanted to know my game plan for getting us back on track. I realized that in trying to carry this myself, I had not brought her into the loop of my business plan.

I had committed a major mistake. I had not talked with her about my business.

As we discussed my plans I could immediately see relief in her eyes. She needed to know a few things from me…

1. I had a plan and wasn’t just ‘hoping things would get better.’
2. I was on top of my business and things weren’t spinning out of control.
3. She was included in the decisions.

I had failed to assure her of these things. But with one conversation the financial stress was removed, and we were in unity.

All it took was a conversation.

Many of the couples I counsel simply need to talk. The solutions aren’t really complicated. They may be difficult, but certainly not complicated.

Beginning with a conversation is the first, and often, most important step.

4. Keeping secrets about money.

This is a huge ‘no no.’

Secrets destroy trust, and trust is the foundation of a healthy relationship.

As difficult as it may be, you MUST have hard conversations about your finances and commit to being honest, open and accountable.

“I’m not upset that you lied to me, I’m upset that from now on I can’t believe you.”
– Friedrich Nietzsche

Back to Bill and Janet

At first, Bill and Janet struggled because Bill would slip up, cave in to his compulsion to buy the newest golf club. One time it was when he saw his buddy sporting a new TaylorMade driver. Bill just had to have one.

So he paid cash for one in the pro shop. He justified it by saying Janet would never find out. And she didn’t. At least for a while.

When she did discover he had spent money on the new driver, she was hurt. She felt betrayed. She had sacrificed several things the family actually needed. All because she knew it would help them get ahead. When she found out Bill had purchased the new driver, she felt disappointed. Not just because he had caved to his impulse. But because he wasn’t honest with her.

Bill realized what he had done to hurt their relationship. That was more painful than costing them money.

To rectify the problem, he went back to the Pro Shop at the golf course and asked if he could get his money back. To his surprise, the Golf Pro actually let him get a refund. He told Bill he would do it because he had been a faithful patron in the past.

Bill learned a big lesson. Not just about fighting his impulse to get the newest golf club, but about being accountable for his actions.

This leads me to point #5…

5. Not holding yourself accountable to the budget or promises you make.

Bill’s deception about his purchase was a symptom of something deeper. Yes. It was about managing his impulses. But it was even deeper than that. It was about accountability.

I love this quote from CedarVille.edu:

Accountability eliminates the time and effort you spend on distracting activities and other unproductive behavior. When you make people accountable for their actions, you’re effectively teaching them to value their work. When done right, accountability can increase your team members’ skills and confidence.

I realize this is addressed to businesses and business owners (or other managers). But the principle shouldn’t be lost.

When we are accountable, things run smoother. It actually adds value to the relationship.

Remember how Janet felt hurt when Bill betrayed her by purchasing the new golf club?

That action (failure of accountability) eroded Janet’s confidence in the relationship. Lesson? Accountability to those we love adds value to the relationship.

7 Benefits of Accountability

There are many advantages of holding ourselves accountable to our goals and to one another. The seven mentioned below will help you ‘tie the knot’ on your commitment to your goals.

1. Accelerates Accomplishing Goals

Accountability builds ‘buy in.’ It builds trust that moves you forward toward your financial goals.

2. Assists in Measuring Direction and Speed of Accomplishing Goals

I’ve learned that you can’t control what you do not measure. When you measure your progress, you have better control of the results.

Accountability helps you measure your progress so you can know where you are at all times.

3. Keeps You Engaged With Your Goals.

If you are not accountability to each other financially, you will not stay engaged with your goals.

Accountability sets expectations which build engagement.

4. Holds You Responsible For Achieving Goals

In the business world this is called a ‘performance indicator.’ It tells you where you are. Which in turn holds you accountable for progress.

5. Validates Your Investment in Accomplishing Your Goals

In essence, it ensures both partners have ownership in the goal(s).

6. Strengthens the Culture and Family Dynamic

John Wright, Director and VP Marketing at MCGB Properties Ltd. says:

“Without accountability execution suffers; and a lack of accountability can have a snowball effect throughout the team. Accountability becomes embedded into corporate culture by making it everyone’s responsibility, establishing meaningful goals and team buy-in, building trust through support and encouragement, empowering everyone on the team and celebrating successes together,” says

Don’t miss the power of this statement just because it’s written to business executives. The principles work across the board. Even for families.

7. Defines Reality and Serves as Conflict Resolver

When you have a shared goal that you are both accountable to (and for), the goal itself becomes the conflict resolution.

No more arguing. No more debating. The goal is the accountability metric.

You have agreed on a desired outcome. You made yourself accountable to the goal.

Now, that decision is the metric we measure by. It serves as the judge on all conflicts concerning the goal.

That’s a nice segue into the next point…

6. Not taking it serious

Accountability to the goal should resolve most of this issue.

Key point is to make a serious commitment to the goal. Mean it.

Even though Bill went through the Financial Peace program and he believed the principles were good, he lacked a commitment. There was no real buy-in.

He wanted things to change, but when it came to making a deep commitment to see it through, his level of commitment was low.

“Without commitment, you cannot have depth in anything, whether it’s a relationship, a business or a hobby.”
Neil Strauss

“Desire is the key to motivation, but it’s determination and commitment to an unrelenting pursuit of your goal – a commitment to excellence – that will enable you to attain the success you seek.”
– Mario Andretti

“We have to recognise that there cannot be relationships unless there is commitment, unless there is loyalty, unless there is love, patience, persistence.”
– Cornel West

When Bill realized they would never move forward until he had full buy-in, he decided it was time to change. That decision was the most important thing that happened on their journey to financial freedom.

Why? Because it was a commitment.

“Unless commitment is made, there are only promises and hopes; but no plans.”
Peter Drucker

7. Thinking it will all work out in the end (without a plan)

I love what the French writer Antoine de Saint-Exupery says about plans…he was a brilliant poet, artist, journalist, aviator and won several French literary honors. But his quote on planning is one of his greatest insights.

“A goal without a plan is just a wish.”

A lot of people wish things were different. But they don’t do anything to move them toward that end.

Here’s the simple breakdown:

1. Set a goal.
2. Make a commitment to the goal.
3. Develop a strategy to reach the goal.

That is planning.

Before his crisis of faith (so to speak), Bill only had a wish. Once he made the firm decision to change things, he could take the next step and develop a plan.

It is simply not enough to want a certain outcome – to desire to get out of debt…to be passionate about living within your means…

Without a game plan you will not succeed.

I like what Yogi Berra says (he is known for his antics and comical misstatements):

“If you don’t know where you are going,
you’ll end up someplace else.”

Make sure you have a written plan to accomplish your goals. We have several budget and household planning templates you can use to put your strategy into place.

8. Failure to track your money

This is perhaps the biggest failure people make (outside of not having a true commitment to get our debt):

Failing to track your spending.

Truth is, you can’t measure progress if you don’t know where your money is going.

All you have is a ‘let’s try harder next month to spend less.’ That’s not a strategy. That’s not a plan that will work.

You must know…

• How much money is coming in. (how much you have to work with).
• How much money is going out.
• Where every penny goes so you can measure and see how you are doing.

Sounds simple huh? It is. But it’s not easy.

Especially if you are just starting out.

That’s why I like programs like Financial Peace by Dave Ramsey. He’s the leading guru on debt free living. You may not agree with everything he says (he covers things like insurance, investing, real estate, etc), but he is VERY good at getting out of debt.

There is a link to several of his books below. If you are serious about getting your finances in order, I would start there.

Even if you know ‘how’ to snowball debt, etc…it is a great motivator that will help you move forward fast. Beside, he has some practical (and great) ideas you may not have thought about.

That’s it. Didn’t mean to give a commercial for Dave, but his stuff is good.

Wrap Up

I hope this article gives you a jump start on how to manage finances in marriage.

As promised, we have links to a few tools to help you get your plan together.

There are many money and marriage tips for couples, but to get you moving forward we suggest using a zero based budget.

Dave Ramsey gives a good overview of how to use this type budget.

Here’s a short video on Zero Based Budgeting

Leave me a comment below. I would love to hear about your journey to financial freedom and how you manage finances in marriage.

Question: What’s the best budgeting and debt relief program you’ve used? How long did it take you to get control of your finances and what has that meant for your marriage?

Resources Mentioned in This Post

Zero Based Budget Form

Financial Peace (Revisited) by Dave Ramsey

Total Money Makeover by Dave Ramsey