The Importance of Managing Your Finances Together

Right now I am talking to all married, engaged or long-term couples. I cannot stress enough how crucial it is to be on the same page with your partner about your finances. It is commonly accepted that money is one of the leading causes of divorce. If possible, it is best to discuss your finances prior to getting married; however, if you are already married, it is never too late to get yourself back on track.

Some things that are important to discuss about your finances are:

• Are you bringing any debt into the relationship?
• What is your credit history like?
• What do you envision your financial future to look like?
• What sort of lifestyle do you want to maintain?
• Do you want to buy a house?
• What about kids?
• What are your spending habits?
• How do you plan on keeping track of your money in the future?

I know that it is the stereotype that the male keeps track of the finances and the female is fairly clueless and disconnected. I would like to encourage everyone to throw that mental picture right out the window. I think it is imperative that both partners be involved in managing the finances to some extent. If nothing else, it should be precautionary in case something was to happen to your partner. But better yet, you will be most successful in achieving your financial endeavors if you are both on the same page. Knowledge is power, and you will be more powerful against the grip of debt and spending if you are both aware of your financial position and how you plan to achieve the financial goals you have set together. 

I’d like to share a high level overview of how Mike and I manage our finances on a monthly basis. I know that we are a different sort of couple when it comes to money because we are both accountants. Money is our job, so it’s no surprise that we are both involved.

We check on our bank accounts and credit card at least weekly online to ensure that there aren't any surprise transactions and to make sure that automatic withdrawals and deposits are occurring when they should. Then after each month we sit down together and go through every transaction. It usually takes about 30 minutes. I created a spreadsheet in Excel to keep track of all of our transactions where we categorize them (food, mortgage, income, insurance, clothes, utilities, etc.). We try to keep all of our receipts which I enter into the spreadsheet. Mike then reads our online transaction details for the month to me, and I reconcile them to what I already have entered from receipts, adding ones that were missed  (mostly due to lost receipts, auto-withdrawal and deposit transactions). Once that is done, we are able to see how much money we spent on each category for the month, compare that to what we budgeted and take corrective action moving forward.

In a future post, I will show a better picture about what our budget spreadsheet looks like, how we maintain it, and how we use it to make financial decisions, but the point of this post was to emphasize the importance of managing your finances as a team. Money is not something that you will fight about if you are already on the same page with each other. I hope this gets you thinking and talking with your partner.