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My wife trusts me… too much. Specifically, with regard to our finances, that is. When you mix finances and marriage, it’s important that you and your spouse flow together in perfect harmony.
It seems that most of the time when I bring up a financial decision that needs to be made, I hear those special words:
Whatever you think…
Look, I feel good that she trusts my judgment, but it’s important that she understands and is a part of the decision-making.
Every couple’s handling of finances is slightly different. In some relationships, it’s the husband’s “job.” In others, the wife handles it. And in some instances, it’s a joint effort.
Regardless of who handles the finances though, both parties should know what’s going on.
Maybe one person is better with the finances or one person doesn’t care to know the details. Whatever the reason, it shouldn’t matter – a good understanding on both parts of a relationship helps ensure solid financial growth.
Finances and marriage in my household
I’ve been very lucky – Mrs. R2R is on board with the plan to FIRE (financial independence retire early). She’s never been a big spender, so we’ve definitely meshed as far as that goes.
We’ve been married for just shy of 11 years as I write this post and, like many couples who’ve been married a while, we’ve fallen into a money management system that seems to work for us.
In our case, we have separate checking accounts and separate credit cards. Then we have a joint savings account (two accounts if you count our awesome Ally account!).
Mrs. R2R works part-time and makes a lot less than me (though she actually enjoys what she does!). She pays her credit card bills, our groceries, and some of the activities our daughter is involved with (I think gymnastics is going to bleed us dry!!).
I then pay all the other bills (mortgage, property taxes, insurance, utilities, etc.).
In the meantime, we both contribute what we can to our retirement accounts, joint savings, and other investment opportunities.
It might be a little weird, but the system works for us and it’s extremely rare that we ever have a disagreement about money.
The problem though is that because I pay most of our bills, Mrs. R2R isn’t always aware of what those other bills entail. And I don’t mean that in a bad way like “Oh, if she only knew how much THIS costs!” I mean it more as in she doesn’t have the same financial snapshot in her head as I do. For example, she doesn’t get to see the costs of our rental properties and the related income and expenses.
Periodically, I’ll show her our financial picture in Quicken (to her dismay) so she knows where we stand. But generally, she just looks at it and says, “Looks good to me!”
Now, don’t get me wrong – she says she’d take over the task of paying all the bills if I want, but that’s not what I’m after. First off, I’ve got a little bit of an OCD problem and would struggle with that lack of control. More importantly, though, I just want to make sure that she’s in the loop and that we’re steering the ship together.
If I get run over by a bus or eaten by a bear on my backpacking trip (my worst fear ever!), I want to make sure that Mrs. R2R can just immediately take over without too much of a headache.
I mean, if you think about it, she’s already going to be mortified that someone as fantastically awesome as myself is gone. 🙂 Now add in the idea of running with our finances in that state of mind and you’ve got a mess waiting to happen.
Hmmm, now that I think about it, she might just take the life insurance payout, blow this Popsicle stand, and completely forget about little old me in a heartbeat. She’ll probably just bury me in the backyard!
Being on the same page with your spouse
As I mentioned, Mrs. R2R and I rarely disagree about money and when we do, it’s never about anything serious.
However, for many families, finances and marriage can be a touchy subject. I think this is especially the case when a couple is struggling to pay their bills. It makes life a rough ride and it tends to make partners take things out on each other.
I’m not a marriage counselor but I do know that couples somehow need to find a way to get on the same page with their finances. Otherwise, the relationship is likely to be doomed to fail.
Like I said earlier, I use Quicken to manage our finances. At any point in time, I can see exactly where we are with our all our money (great for my OCD! 🙂 ). However, that’s not the only tool available for getting a snapshot of your finances.
In fact, Empower (formerly Personal Capital) is another great tool (and free!!) that I’ve also been utilizing to evaluate our net worth and see how our investments are doing. The most important component I’ve found with this tool though is that you can see what you’re paying in fees in your investment accounts and what it will cost you over the years.
Believe it or not, changing my investments based on what I found there will likely save me over $50,000 in fees alone over a 10-year period. Scary, right?
Once a married couple can figure out how handling finances would work best for them – one partner running the show or a joint effort – then they can start focusing on their path to the future together.
Onto the future!!
Since we’re in good shape with how we handle our finances and our system seems to work well for us, we’re onto the next task…
My goal now is to get Mrs. R2R focused on helping me to navigate this ship we refer to as our finances. She doesn’t need to know every intricate detail (unless she wants to), but she should be a little more involved than she is right now.
For instance, at the very least, in case of an emergency, a spouse should know:
- Where things are located – Quicken files, bank statements, estate documents, etc.
- Login information – Website addresses, usernames, passwords, etc.
- Contact information – Anything not easily known – in our case, the name and info for our property management company.
Lucky for me, we’ve got most of this covered. I send Mrs. R2R an email (as well as my brother as a backup) with instructions on all of the above. I update the instructions about once a year and resend it. It also has the latest copy of my KeePass database attached with all password information (encrypted, of course!).
I have her keep it in a specific folder in her email account separate from everything else. She knows to refer to that email if I die or have some emergency that puts me out of commission for a while.
However, I need to work on taking things a step further. Here’s what I think she should be more aware of:
- Our expenses – Maybe not the specifics of each category, but what are we spending each year and how much of that is discretionary?
- Our savings – How much are we saving each month and where’s the money going?
- Our investments – What are we buying in our retirement and taxable accounts? Shhh, don’t tell her that the answer is almost all index funds!
- How the rental properties are doing – Which ones are cash-flow positive and which ones aren’t? How much do we pay the property management company?
- Long-term planning ideas – How does a Roth IRA Conversion Ladder work and how will we leverage that? What strategies can we use to save money on our taxes? Why will our early retirement help our daughter with the costs of college?
So, how do we make this work? Talk.
We need to discuss these types of topics more often. Mrs. R2R doesn’t really have a lot of interest in learning a ton about money. But I thoroughly enjoy it. So, we just need to sit down and talk more about the options that I learn about that might fit for us.
It’s probably not the most exciting thing for her, but in small increments, it should be a little more bearable. And in order to help make the important decisions, knowing the right information is vital.
So that’s the plan… now let’s see if we can make it work!
When it comes to finances and marriage, how is it handled in your household?
Thanks for reading!!