‘He who fails to plan, plans to fail’, Proverb
When you got married, did you and your spouse sit down and develop a plan for your family finances?
I am a big believer that those who are proactive achieve the most success, and I have experienced this to be true in the area of money and marriage almost without exception. For the first several years of our marriage, my wife and I basically coasted along and didn’t give much thought to our money.
There was always a little money in the checking account, and we never missed a payment on our rent, cars, student loans or other debt. The money thing was no big deal.
Well, about five years ago, we woke one day to the glaring realization that we had accumulated a lot of debt along with virtually no savings. There’s nothing like a double-line on a home pregnancy test to make you quickly reassess where you stand financially. When we looked under the surface of “everything seems fine,” we received a hefty dose “oh crap, not so much!”
It’s Time for a Plan
For us, that day marked a turning point in our family’s financial condition. We took an honest assessment of where we stood, held hands and decided it was time for some major changes in the way we handled money.
Over the course of the next three-and-a-half years, we paid off nearly $55,000 to become debt-free in our marriage (other than our home mortgage) for the first time. There are many reasons why you might want to consider a similar goal, but today’s post is about something much more universal.
You need a plan.
Whether you want to retire at 40 or just keep your car from getting repossessed, your financial situation and, most importantly, your marriage will improve if you develop a plan for your money. When you tell your money where to go instead of wondering where it went, you take control of your family’s financial success.
The Big Three: How to Make a Money Plan that Works
1. Talk
If you’re single, it’s easy to create a plan and get started immediately. Well, if you’re reading this, there’s a good chance that you have someone you need to coordinate this thing with.
Typically, one spouse is going to have their “aha” moment first. It could be an inspiring story you read online, your first bounced check or the 100th call from a bill collector. Regardless of where the seed gets planted, change is coming.
Well, when you’re married, a financial plan is only as effective as the most reluctant spouse wants it to be. To get started, you need to discuss just exactly what you hope to accomplish for your marriage and family.
Use some of your Couple Time to ask each other, “What’s our plan all about?”
2. Lock Arms
Once you’ve discussed your goals, it’s time to start taking action. And the key to effective action when you’re married is a little word with big implications: Unity.
I’m a firm believer that the biggest key to a successful financial game plan is being on the same page before you begin and then making adjustments as you progress to make sure you stay on track with each other.
So what does unity look like? Well, it depends on your relationship, but how you handle your bank accounts will be a good indication of where you stand.
I have to admit that I used to have a pretty cut-and-dry view on this topic. However, thanks to you fabulous Simple Marriage readers and our active community back at Engaged Marriage, I have opened my mind.
I invite you to read the most popular post on my site called “Should Married Couples Have Joint or Separate Bank Accounts?” and consider the variety of intelligent (and very passionate!) opinions in the post and comments. To me, the bottom line is that you need to operate your finances from a central plan, which brings us to the dreaded “B” word.
3. Write It Down
Once you’ve talked it over with your spouse and committed to approach your finances with a unified mindset, you’re ready to physically create your financial plan. Your plan will likely grow over time and include a variety of short, intermediate and long-term goals.
However, at its core, your plan needs to have a specific map for how you will handle your income and expenses. And it needs to lay this out before you actually receive your income and then spend it (it is a plan, after all).
You guessed it, the base of any effective money plan is a monthly budget. I’ve written previously here about the benefits a budget provides for your marriage. If it’s the key to financial success and it’s great for your relationship, why doesn’t everyone use a budget?
You probably have your own reasons, but I know that we didn’t have a budget for years because we were ignorant about what was happening to our money and we liked it that way! Another big issue, which actually popped up for us again recently, is the feeling that preparing a budget takes too much time and effort.
Well, trust me when I tell you it doesn’t have to be that way. There are many fantastic budget software options out there, and we recently found a system that makes it easy and really meets our family’s needs. Plus, it has a cool name: You Need A Budget!
Whether you choose a slick computer program or a simple legal pad and pencil, please just get started so you can lay the foundation for your family’s financial success!
Share Your Plan (or Lack Thereof) with the Community!
I really want to hear your thoughts on this subject. I was frankly enlightened by the feedback I’ve received here previously on financial issues, and I would love to hear how your own family handles the issue of financial planning.
Please leave a comment sharing whether you have a money plan and how you and your spouse address the need for unity (or don’t). Thanks!
(photo source)
Thanks for your posts on keeping marriages simple. I’ve been following for a little while because I have my own ambition to get married. I’m currently engaged to a wonderful young woman and my only desire is to start a life with her. However, we’re college students who need help. Anything would be greatly appreciated.
http://www.christaandshawnforever.blogspot.com/
Thank you!
Thanks for the comment, Shawn. I understand how tough it can be financially when you’re just starting out (or just trying to start out). Keep your chin up and don’t worry about spending a bunch of money on a wedding. It really is just a day when your focus should be on the rest of your lives together.
Plus, with all due respect, you’ll be better served getting a part-time job and working as hard as you can to earn the extra cash you need rather than seeking online donations.
I am a firm believer that to cultivate complete trust in a relationship you need to try and trust your spouse with everything….including finances. My husband and I chose to pool our resources from day 1 and we live and pay bills out of one bank account. After a crash and burn first year, and with gentle nudging from the leaders of our young married’s bible study, we sat down and BUDGETED. We simply listed all our fixed monthly expenses (things such as utilities, mortgage, insurance, etc) and subtracted that from our total monthly income. The money leftover gets divided between expenses that can be controlled ie: groceries, entertainment. We include a monthly savings and RRSP deposit in our fixed expenses since setting that money aside is important to us. At first it required some working and re-working since we were hardly breaking even, but now we re-evaluate it once or twice a year depending on salary changes or payment changes. We have even moved to using cash for groceries and entertainment, when the money is gone then we know we can’t spend until next month! It takes a lot of worry off my mind knowing that we’re living within our means now and actually being able to see it on paper!
Bravo, Camille! I love the success that you and your husband are enjoying by living on purpose and with a plan. You guys are doing exactly what I recommend for young couples, and I know your approach will serve you well in your finances and, more importantly, your marriage!
Thank you for this post. I wish my husband and I would have had far more discussions about money before we got married. I had quite a bit of credit card debt but I felt it was manageable and as it turns out he had extremely bad money management. From the beginning it was decided that I would be in charge of finances because of it but little did I know how much a battle it was going to be. As a result of giving in to things we shouldn’t have bought and some other bad decisions we are now fighting hard to not declare bankruptcy. We have had more fights about money than any other topic but we are determined to come out better in the end! I pray other couples will learn from your information and not hit the pitfalls we have!!
You’re very welcome, Julia! I really appreciate you sharing your story for others to learn from. As you’ve experienced, open communication about money is simply vital to a success in both marriage and life. It sounds like you guys have taken your knocks, but you have now learned some valuable lessons that will serve you well as you move forward and get back on solid financial footing.
thank you for such a great post! I am getting married in October and we have had many money talks. It is so important to have a plan of action… a blueprint for our family. We are paying for the wedding ourselves with savings and have paid off all debt expect for my car and his student loans. We also bought a house this fall so we have a mortage too. I think we are in a pretty good place right now but it is so crucial to remember that that kind of security can be very short lasting… it is all about choices we make along the way.
Thanks, Sara! It’s great to hear that you guys have made it a point to be intentional with your money and open up the communication about it as you prepare for your marriage. Congratulations in advance on your upcoming (cash) wedding!
Thankfully my husband and I have a plan! A written down one. We also have weekly budget meetings and have print out of goals, etc.
The plans of the diligent lead surely to abundance,
but everyone who is hasty comes only to poverty.
—Proverbs 21:5
What a PERFECT quote from Scripture, Favor. Thank you for sharing it!
Dustin doesn’t disappoint; thanks for great financial and marital insight!
Your “Big Three” are spot-on and I think they’re written in the perfect order. Early in my marriage, my wife and I wouldn’t talk about money very much (at least not without passive-agressive tongue lashings) because we both assumed we had the same perspective. No amount of premarital counseling could’ve prepared us for getting on the same page financially.
Being so sold out and committed to the marriage is the critical first step; the budget is the practical execution of that first step. And if one spouse chooses to willingly disregard the game plan in a budget, they are disregarding a financial commitment they made to their spouse.
No room for that in a solid, engaged married.
Thanks Dustin!
You’re too kind, Derek! Your comment is awesome, as is your vital work in helping people find success in their finances (and marriages).
My husband & I share a bank account and use a partly cash system. After each pay period, we take out the cash we’ve budgeted for groceries, general spending, kids’ allowances, and gas. The rest in the account we use to pay bills online. This worked really well for a while, but some pay periods we run out of spending cash & have to dip into the bank account (if something hasn’t come through or money has already been deposited for the next pay period). With 4 kids, it’s difficult to budget sometimes…things always seem to come up. We recently realized that we’ve gotten in over our heads somehow (expenses have increased, income hasn’t decreased), but before we could get seriously late, we went to a non-profit debt management organization & started a program to pay off all our unsecured debt in 3 years, saving us $100/month in payments. We also combed our account & cut over $300 in extraneous monthly expenses. We’re pinching every penny we can so we can be debt-free & not worry about money. It’s such a strain on relationships and families. I hate being dependent on it! We also pray a lot about it & try to give our stress up to God instead of ourselves & each other. And we give any “extra” we find to the church or various charities.
Thank you for sharing your story, Ashley. The hard work you are doing now will pay great dividends in the future of your marriage and family life. We have two little kids and one on the way very soon, so I can certainly relate to those unexpected expenses!
The above tips are great and easy to implement. Before, my dear husband and I only work on monthly plans i.e. salary vs bills, leftovers save. Now we have a bigger plan involving 2 big words – Financial Planning! Once we engaged a qualified FP, it opened a big new world to us…see how we did on the first part. These may also help to consolidate into the long term plan.
http://workandwok.com/2010/04/21/managing-family-finances-planning/
My wife and I had plenty of money talks before even getting engaged, and they only increased after the engagement. Our pre-marital counseling included an over-view of personal finances and some advice where it was needed. We have a monthly budget and any purchase over a set amount is discussed before being made. Our only debt is school, and we have a solid plan to pay it off upon graduation (that will work even with two minimum-wage, full-time jobs).
Fortunately, we share views on most things financial, so it is easy for us to make decisions.
We started out married life when I was unemployed and in debt. Thanks to my wife’s prudence and austerity measures (as well as interest-free loans from family), after 9 years together (it was our anniversary, 1st June), we are nearing the end of the tunnel. Debts are almost cleared, I have a stable (?) job, we have a house. Things are looking up. At least financially! Because of the change/improvement, our budgeting has gone to pot. Spending is increasing and the *simple* life which strengthened our relationship is becoming (at least for me) uncomfortable in its wastefulness and extravegance – more specifically, our different spending priorities. Surprisingly, this is putting a strain on our relationship!! I would have thought the other way around is more usual – reduced financial stability = greater relationship stress. We haven’t made the adjustment and really need to talk it through. I think one area is saving for a rainy day – note the question mark in “stable (?) job”… Any advice welcome!