2894: How Do I Budget if My Partner is a Spender? by Amanda Amezcua with Women Who Money

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[00:00:30] How Do I Budget If My Partner is a Spender by Amanda Amezcua with WomenWhoMoney.com

[00:00:36] And I'm your host and personal finance enthusiast, Diana Merriam.

[00:00:40] Now let's get right to it and continue optimizing your life.

[00:00:48] How Do I Budget If My Partner is a Spender by Amanda Amezcua with WomenWhoMoney.com

[00:00:56] You dreamt of the day you'd join your life with the person who makes your soul happy.

[00:01:01] Your nearly flawless alignment has been almost surprising.

[00:01:06] However, as mine and yours have become ours, one subject remains sore. Finances.

[00:01:14] You've done the work of calculating the perfect budget with a place for everything and everything in its place.

[00:01:20] Except for your partner's spending.

[00:01:22] You often find yourself questioning the way they choose to spend money.

[00:01:26] You don't want to start arguments.

[00:01:28] But you feel if you don't say something, they'll keep spending too much money and you'll always be living in a deficit.

[00:01:35] Equally frustrating is the thought that if they don't stop spending, you'll never get the chance to achieve the financial goals that matter to you.

[00:01:43] This conflict isn't out of the ordinary.

[00:01:47] Numerous studies over the past decade have made it common knowledge that money is one of the leading causes of relationship turmoil and is noted as a significant contributor to separation and divorce.

[00:02:00] This isn't to say opposites who've attracted are hopeless in finding success.

[00:02:06] You need not choose between being romantically happy and building financial stability.

[00:02:12] Rather, acknowledging and validating your differences can go a long way in making peace with your finances and sustaining team spirit in your money matters and relationship.

[00:02:24] After all, it's easier and more productive to change how you budget rather than try to change each other's nature.

[00:02:33] Getting on the same page about money.

[00:02:35] Instead of going head to head over a budget, unite your partnership powers with these suggested exercises.

[00:02:44] Number one, uncover common money goals.

[00:02:48] An individual's values often dictate how one spends money.

[00:02:54] Disagreements can happen if you don't understand or respect your partner's values or they don't understand or appreciate yours.

[00:03:01] To find common goals, it's important for you and your partner to each set aside some time to define your own set of values.

[00:03:10] Ponder on what major areas you spend money and why you believe you choose to spend it that way.

[00:03:17] For better insight into your partner's choices, give the same consideration to their habits.

[00:03:24] It's likely that you haven't peeled back the emotional and psychological side to spending in this way before.

[00:03:30] You might realize what you deemed as frivolous or meaningless spending is actually rooted in a value you hold as well.

[00:03:39] For example, if your partner has been anxious to spend money on home improvements that seem unnecessary to you,

[00:03:47] the value they're fulfilling might be family orientation or the sustainment of a good quality of life.

[00:03:54] Those are much harder to sneer at than the dollars going out of your bank account.

[00:03:59] Come together to share what you both discover, draw similarities, and consider compromises for each other's non-negotiable values.

[00:04:08] With your values in black and white, you can work together to set common and individual goals, providing fulfillment for both partners.

[00:04:18] These goals may be spending within a budgeted amount, or may warrant the setting up of a new savings or bank account to manage your flow of discretionary funds better.

[00:04:28] Working to identify values, then validating them by creating shared goals will help your partner to feel accepted.

[00:04:37] This, in turn, will cultivate an internal motivation far better for their well-being and your joint financial picture than the all-too-tempting nagging.

[00:04:48] Number two, collaborate on a budget.

[00:04:52] Once you establish values and goals, work them into a budget or budgets depending on how you integrate your finances.

[00:05:00] If you have separate bank accounts and split bills, a budget for each of you makes more sense.

[00:05:06] Writing out even a basic budget ensures spending occurs more intentionally.

[00:05:11] Start by noting all income and listing out expenses, including both needs and wants.

[00:05:19] Discuss with your partner how you might use the income to meet obligations, and then funnel it into categories supporting each partner's goals.

[00:05:28] Now is the time to agree upon an appropriate monthly allotment for each person's spending.

[00:05:35] Once decided, the issue should not be raised again unless income changes drastically.

[00:05:40] It's equally critical that both parties have a voice in this process.

[00:05:46] Your end budget should not be a marching order, but rather the product of each party's own volition.

[00:05:54] A budget might call for a bit of sacrifice, but that sacrifice needs to be a choice.

[00:06:00] Overall, a budget will be an easier sell if it doesn't just permit your partner's spending, it supports it.

[00:06:08] Number three, separate partner spending money from main accounts.

[00:06:13] Tracking how much money there is to spend or how much money is spent can be difficult if all income flows in and out of the same checking account.

[00:06:22] To draw clear lines between budget categories, it may be helpful to organize money by its intended purpose.

[00:06:30] You can choose together whether you'll create new bank accounts or simply stock envelopes with the allotted funds.

[00:06:36] You may even opt for a hybrid system.

[00:06:40] Whatever works for you.

[00:06:42] Because this money is separated and therefore limited, there should be far less of a need to question how it's spent.

[00:06:49] Partners can then enjoy guilt-free spending with no impact on the other parts of the budget.

[00:06:56] Number four, consider tools to help track your finances.

[00:07:01] Spending, as well as saving, can fall off course without some kind of tracking.

[00:07:06] Having a partner stick to these types of goals may be aided by introducing them to the right tool.

[00:07:13] You could both get on board with a mobile banking platform or discuss the features of various apps.

[00:07:19] Additionally, using automatic notifications to alert your partner of low balances or over-limit spending can reduce the frequency of unpleasant conversations.

[00:07:30] A tool shouldn't only be used to neutralize the negative.

[00:07:35] Be sure to celebrate together as the savings wins stack up.

[00:07:40] Communicate appreciation for efforts in the right direction.

[00:07:43] And number five, withhold judgment as you maintain an open dialogue.

[00:07:50] The worst feeling in a relationship is when all communication has stalled out.

[00:07:56] This can happen if one partner feels their decisions are under constant attack.

[00:08:01] No one can deny making smart financial decisions is important.

[00:08:05] But you should never make another person, especially someone you love, feel less than for struggling to meet the standards

[00:08:13] you alone have set.

[00:08:15] Once a rift develops, it takes great care to repair.

[00:08:19] The damage is likely not worth winning the argument in the first place.

[00:08:24] Realize it takes most people a lifetime to understand their relationship with money and develop discipline in its use.

[00:08:32] Have patience with your partner.

[00:08:34] Resist being critical.

[00:08:36] Forgive slip ups.

[00:08:39] Relationships, like budgeting, take work and periodic reassessment.

[00:08:44] So long as you both continually commit to trying, you'll find a harmonious arrangement in both regards.

[00:08:55] You just listened to the post titled,

[00:08:58] How do I budget if my partner is a spender?

[00:09:01] By Amanda Amescoa with WomenWhoMoney.com

[00:09:04] And I'll be right back with my commentary.

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[00:10:10] This post reminded me of a very compelling speech from the Economy Conference this year.

[00:10:16] The speaker was Aaron Thomas, the founder of Preenups.com and a divorce lawyer who shared what he's learned about marriage from working on a thousand divorces.

[00:10:26] And you can watch it on YouTube right now.

[00:10:29] He carries a fundamental belief that establishing a solid financial foundation during engagement can prevent many common marital disputes and that fair prenups help create happy marriages.

[00:10:44] He basically looked at the main reasons why people get divorced.

[00:10:49] And we know that disagreements about finances are a leading cause.

[00:10:53] And he reverse engineered solutions within the prenups, he writes.

[00:10:58] For this specific scenario, where one person is a spender and the other is a saver, he encourages an agreement about separate accounts.

[00:11:07] The spender has access to a pool of money that they can spend freely.

[00:11:11] And anything over a certain monetary threshold needs to be discussed and agreed.

[00:11:16] I really liked how he positioned a prenup as a financial plan for the marriage, not a plan for a divorce.

[00:11:24] Getting married is the most legally significant thing that most of us will ever do aside from dying.

[00:11:31] We are signing a legally binding financial agreement that most of us never read.

[00:11:38] So using a prenup as a partnership agreement for the marriage can help mitigate financial disagreements before they even start.

[00:11:47] And that should do it for today.

[00:11:49] Have a happy rest of your day.

[00:11:50] And I'll see you for the Thursday show tomorrow, where your optimal life awaits.