3 keys to making your personal finances work as a couple

Get Rich Slowly recently had a reader pose the following question:

“While I try my best to “get rich slowly” I have one huge issue: a husband. My husband likes to spend money. I’m referred to as the “Thrifty One Who Won’t Allow Me To Buy Stuff” and he’s referred to as “That Jerk Who Buys Stuff”. Do you have any advice for couples that need to have the other half put on a strict budget without making them feel like a child?”

I posted a comment at Get Rich Slowly in response, but I thought this excellent question deserved a more thorough answer, so here goes.

In my experience, there are 3 keys to making your personal finances work as a couple:

  1. If you don’t already have an established method of managing finances, decide together to try an established, published system. Agree to stick to it exactly, unless you both decide to deviate.
  2. Make the “personal” budget category a high-priority and fund it as generously as you can.
  3. Don’t discuss finances for more than 30 minutes at a time or past 10:00 at night. If you don’t get through all the issues, meet again tomorrow.

1. If you don’t already have an established method of managing finances, decide together to try an established, published system. Agree to stick to it exactly, unless you both decide to deviate.

My wife and I have always lived within our means and have never had debt problems. However, we never saw eye-to-eye on the specifics of how to manage finances. I always felt like we were doing great; we were living within our means and saving 10% of our income for retirement. I figured we could spend the rest however we wanted. My wife always felt like the rest of our money was just wasting away on things that were useless. Even though we were doing better than a large portion of the population, she continued to experience significant anxiety and discontentment.

We both had read several personal finance books and tried to persuade the other to adopt the principles, but to no avail. I realize now that in many cases we weren’t rejecting the ideas, we were rejecting the messenger (the spouse).

Finally, after 10 years of marriage we faced a series of emergencies that forced us to either move from our home and dramatically reduce our standard of living or get a tight grip on our financial management. We figured we could barely make it through if we carefully managed every dollar.

In our desperation, we decided to attend Dave Ramsey’s Financial Peace University, a 3-month, weekly course in managing personal finances. Knowing that one of us had always rejected financial ideas proposed by the other, we agreed that we would follow the program to the letter, even though we didn’t know what it would consist of. If we BOTH disagreed (which we did at points) with the program, then we could alter it. But if only one of us disagreed, we would have to follow the program as the default.

This was one of the BEST decisions we’ve ever made in our personal finances. It allowed us to stop fighting each other. By having a completely objective third party telling us what to do, it was easier to accept the concepts. If we both felt there was a better way of doing things, we weren’t tied to Dave Ramsey’s system and could discuss how to alter it to better fit our needs. In short, it factored out personal grudges and judgments. We were left to judge the actual content and not the content-delivery system.

If you’ve always had a hard time agreeing upon a system, TRY THIS OUT! Don’t get stuck on a particular method. If you’re convinced a certain system will work and your spouse is not, find a different system you can both agree to try. Otherwise, your spouse will be resisting you rather than the content. It’s way more important to just get on the same page. Most main-stream systems for managing finances are theoretically sound. If you first get a system established, then you’ll at least have a base system from which you can discuss deviations.

2. Make the “personal” budget category a high-priority and fund it as generously as you can.

The “personal” budget category is a key to helping a budget work. Having personal money that you, and only you control makes budgeting as a couple tolerable. It’s easy to imagine why couples are financially miserable when they have to negotiate every single purchase with their spouse.

My “personal” funds are what I really care about the most. I don’t really care that much about groceries or household items or hair cuts. Sure, I care on a large scale – I don’t want to spend so much that we can’t meet our other goals. But I’m not that emotionally tied to them, so I can discuss them with my wife non-emotionally. On the other hand, if I had to negotiate every personal purchase – every book, CD, and soda – I’m sure we’d end up in endless arguments every month!

The fact is, many couples end up spending personal money anyway. They just hide it or manipulate the system. Why not explicitly budget “personal” funds and reap the benefits of knowing that money is yours.

Here are a few of guidelines for your “personal” budget category:

Separate checking accounts are ok for personal funds

It’s important to have at least a small financial slice to call your own. You can manage it however you want. If you don’t want to budget it, that’s ok. Waste it all if you want. Or save it for that new electronic gadget. While my wife and I keep separate checking accounts for our personal funds, we still have access to look at each others’ accounts if we want. But I don’t think I’ve looked once and don’t really care how she spends her funds.

Be as generous as you can afford
My wife and I budget $100 each for personal funds. Whenever I mention that to someone, they are always shocked the figure is so high. Well, you can afford to do that when you don’t have a car payment :-). Seriously, I give our personal fund a huge amount of credit for making our budget work and go smoothly. $100 is more than enough to feed my book-buying addiction. It’s also substantial enough that I could fairly quickly save for large purchases of several hundred or even a thousand dollars. There’s almost nothing I couldn’t afford over time, even that new HDTV I really want.

Personal funds can also act like a shock absorber, similar to the “cushion” budget category. Sometimes I want to eat out with my co-workers more than I have money allocated for. No problem, I just use personal funds. Similarly, I often buy my boy a toy now and again with personal funds. It’s easier than waiting and negotiating it with my wife. With such a generous personal fund I really don’t feel a loss from $5 or $10 every now and again.

One last benefit that can be a huge plus in marriage; having personal funds can make gift giving more meaningful. Before we started budgeting personal funds, gifts seemed less meaningful because all our funds were pooled and negotiated. Budget meetings were like, “Hey hun, I want to buy you some roses this month, so let’s budget $20.” How romantic. Now, when I give my wife spontaneous gifts, they are even more meaningful because I use my own money. I’m sacrificing my own interests for her sake. Let the romance begin.

Obviously, not everyone will be able to afford $100 each for a personal fund. We started out at $20 each and grew it from there as we could. Do the best you can. I recommend allocating at least $20 each for “personal.” That’s enough to buy one medium-size purchase like a book or CD a month. You certainly need to be meeting your debt reduction and savings goals first, but your “personal” and “cushion” categories should be close behind in priority.

Keep it even

This one’s easy. You always allocate the same amount to each person. I’ve never found a good or fair way to do it otherwise. This also goes for personal funds that we allocate from bonuses or other windfalls. If we get an unexpected windfall and I want that new road bike for $600, I should expect my wife to get $600 to spend how she wants as well. You can discuss variations to this rule if you like, but it should be the baseline assumption.

3. Don’t discuss finances for more than 30 minutes at a time or past 10:00 at night. If you don’t get through all the issues, meet again tomorrow

Doing finances as a couple is hard enough. Why complicate things by dragging a tired or distracted spouse through sometimes tedious and intense discussions. I’ve found that almost exactly after 30 minutes of discussing finances, I start to tire of the conversation. Suddenly I become contradictory and hard to work with.

Similarly, after 10:00, financial discussions should be prohibited. We’ve tried discussing finances after 10, or even 11pm and it wasn’t a pretty sight. I disagree with everything and am very grouchy. Every time it’s ended with contention and bad feelings.

These guidelines should be adjusted based on the personalities involved. Maybe both partners have a nicer demeanor and higher tolerance for talking about finances than me. Or maybe both are night owls. Great, expand the limits. On the other hand, you may need to shrink the allotted 30 minutes or move up the evening cut-off time if finances are a really tough issue. Just try to meet for a minimum of 15 minutes or it will be hard to make progress.

If you’re establishing a budget for the first time and have lots of issues to discuss, you may need to meet several nights in a row for 30 minutes to get through everything. That’s ok and should be expected. At least you’ll be able to do so in a civil manner.

Limiting the time spent discussing finances has a great benefit. You become much more focused on the issue at hand. Agendas for budget meetings are entirely appropriate and helpful. A time limit will help you get clarity on exactly what needs to be addressed. Rather than allowing yourselves to digress, you will stay on topic and have more efficient meetings. This can also have the side effect of making things less emotional which is a VERY good thing when talking about finances.


It’s no surprise money is the #2 cause of divorce. In our marriage, even when our financial situation has been good, it’s still been one of our major issues. Following these steps has helped us get to the point where finances are no longer a major issue. For the first time in tens years, we see eye-to-eye. Sure, we still have an occasional disagreement, but these steps have alleviated a huge amount of tension and stress in our relationship. I hope they can in yours too.

Posted in Budget, Budgeting, Budgets, Couples, Finance, Finances, Money, Personal Finance, Relationship, Relationships, Spending | 4 Comments »

4 Comments to “3 keys to making your personal finances work as a couple”

  1. Getting Finances Done » How to become a personal finance “black belt” Says:

    […] »3 keys to making your personal finances work as a couple […]

  2. Isabella » A talkative bird he was, full of most marvellous loud tales and Says:

    […] 3 keys to making your personal finances work as a couple […]

  3. Adventures In Money Making Says:

    my wife and i generally see eye to eye on finances. I told her i was going to buy a $3,000 Omega wristwatch and she didn’t say anything so i thought it was ok.

    however, after i bought it, she was shocked and said she didn’t think i would actually follow through. i normally wouldn’t buy anything so extravagant but now i hang out with high-rollers, having a decent watch makes me feel at ease. plus i might as well reward myself for doing a good job financially for the past 5 years.

    lesson learned! never buy anything expensive without your spouse present.

    luckily she saw that it was her mistake and it hasn’t been a source of friction. (if it had been, i would’ve gotten rid of it on ebay immediately!)

  4. Which Should You Choose: Joint or Separate Finances? ∞ Get Rich Slowly Says:

    […] Getting Finances Done: 3 keys to making your personal finances work as a couple […]

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