Financial Advice Married Couples Should Not Ignore

Personal disagreements over financial decision-making are among the main reasons that married couples end up in divorce court. Unfortunately, even when couples have resources and financial advice readily available to them, they still end up fighting over money.

The 2018 Fidelity Couples & Money Study found that couples carrying debt argued significantly more (67%) about money than those couples who were not burdened with debt (41%).

Avoiding Agitation

Beyond repaying personal or professional debts, the Fidelity study found that friction between couples often originated around savings, and how much money should be collectively saved by the time the pair reached retirement age (approximately 65 years old). In the U.S., a general lack of aggregate savings among this demographic, paired with a larger population of retirees drawing on Social Security than ever before, has combined to intensify stress on these aging couples. Other common arguments stemmed from where important financial and legal papers should be located, and who ought to be the primary decision-maker in regard to daily financial choices.

A poll by Money Magazine in 2014 found that 70% of married couples regularly argued about money, surpassing fights about household chores, togetherness, sex, snoring, and dietary choices. Couples cited frivolous purchases, household budgeting, and credit card debt as the biggest sources of friction.

In an effort to help married couples reduce personal disagreements about money and make more accountable financial choices (individually and together), below are a few tips that married couples should not ignore.

Top Personal Finance Tips for Married Couples: Create separate bank accounts—plus one joint account Track your spending Set financial priorities together Communicate about finances regularly Make a plan to pay down existing debt together Be honest about costs and debts
Image by Jiaqi Zhou © The Balance 2020

Separate vs. Joint Accounts

An important consideration to make early in a relationship is whether or not to maintain separate bank accounts, as well as collective ones. If a couple owns a business together, this may seem additionally counterintuitive, but structuring individual "fun money" accounts can be as unique as the couples themselves. Moreover, budgeting a certain amount of cash into individual accounts each month is a way to lessen the guilt about spending on personal items, and reinforces accountability.

According to research from the University of California:

For many, maintaining a separate bank account is an important psychological exclamation of personal control and independence. For some it's the lifeline that makes it possible to leave an abusive relationship.

Conversely, some couples also reported that having joint accounts increased the overall feeling of "togetherness," and that the couple's financial future was singular.

However, for those couples that disagree over what constitutes "frivolous" spending, separate bank accounts with a budgeted monthly allowance may be a good solution.

Track Your Spending Money

Without some form of individualized spending, it's difficult to face the quantitative reality of how personal spending choices affect collective budgeting each month. To make matters worse, Fidelity found that 33% of surveyed couples with debt had "difficulty" talking about their budget/spending habits with one another. Only through honest conversation and budget analysis can couples track and change their financial behavior—and work to reduce the stress, confusion, and frustration of managing money together.

Establishing and following a budget is the most reliable way to eliminate debt and plan for a future together, and it's nearly impossible for couples to set financial goals or build a financial strategy without one.

Software is a powerful tool for couples setting and maintaining a budget, such as YNAB, Mint, Wally, and PocketGuard, among others.

Set Financial Priorities Together

Communication is key to any healthy relationship, and discussing financial decisions is no exception. Communicating about finances is challenging because the priorities of personal finance are as unique as the individuals themselves, and any savings strategy must consider the needs and aspirations of both partners in order to be successful.

If the topic of debt, bills, or retirement goals makes either partner uncomfortable or defensive, a certified financial planner can help set guidelines for a couple, and establish a budget with benchmarks like an emergency fund, raising a family, or saving for retirement.

It's important that both partners know where a couple stands financially in order to establish common financial goals.

Save 10%

Couples living on a "month-to-month" billing cycle can rationalize that they simply don't have enough money to put anything into savings. This is where a budget becomes crucial; in order to save at least 10% of monthly income for future use, it's necessary to consciously and collectively make small adjustments and sacrifices every month.

After paying bills that cannot wait (such as power, gas, insurance, and rent), couples should contribute to an emergency fund, while leaving an additional 10% for retirement. The earlier couples begin saving, the easier it will be to retire someday.

Manage Debt as a Couple

Although in the eyes of the law, any debt acquired before marriage will remain in the name of the person who took on the debt, working as a couple toward a debt-free life will benefit both partners.

Being dishonest about personal spending habits or keeping hidden debts is referred to as "financial infidelity" and inevitably destroys the trust that holds a couple together.​

In Conclusion

As of May 2021, Americans are $16.64 trillion in debt, suggesting that regardless of communication, wealth, or frugality, couples will always be expected to manage an unpredictable economic future.​ Data also shows debt as one of the primary threats to the happiness and financial security of couples of all ages, and thus minimizing debt obligations is a reliable way to positively impact personal relationships and personal finances.