Money fights are the worst fights, Part 2
by Mira and Charles on June 24th, 2010How to prevent money fights
In the previous blog we talked about how destructive fighting about money can be. And that matters not only to you but to the whole country: with the tough times so many of us are facing, more money fights means more divorces, and that’s no good for anyone. But there are things you can do today to stop these fights.
1. Accept the fact that saving money is always the top priority. I just don’t see how anyone can deny this any more. Everyone can get fired or lose her business. And these days it can take a lot longer to get back on your feet. So: make saving your top priority. Allocate money to saving right after you pay your mortgage. And any financial planner will agree with me: if you’re not saving 10 percent of your take-home pay, you’re not saving enough.
2. Spending money is not the same as having fun and enjoying life. As soon as you understand this, you will be able to have more money and more fun.
3. Create a budget. You won’t have to fight so much if you let a budget control your expenditure. Once you add up all the places your money has to go, you’ll probably see there’s not much left to fight over in the first place!
4. Use the fairness principle. Do NOT get into fights over how much she spends on her hair each month and how much he spends on his electronic toys. Don’t even get started with this. INSTEAD, once you see from your budget how much free money you have left after bills and other obligations, go out for coffee (you’re less likely to argue in public) and discuss ONLY how to divide that pie according to the fairness principle. Fifty/fifty? Seventy/thirty? Whatever. But the sole question is, “What would be a fair way to divide the money we have left for discretionary spending?” And by the way, here is my ruling: hair, golf, eating out, clothes are all nice, but they’re still discretionary spending. Discretionary spending is money that, if you don’t spend it, no one is going to turn off your electricity or throw you out of your house. Once you agree on how to divide up your discretionary income, there’s nothing more to fight about.
5. Whoever is good at something should be in charge of it. Since saving is essential, the one of you who is the born saver should be in charge of making sure the saving happens. If one of you is good at paying bills on time, she’s the one who should do it.
6. As a last resort, have a financial adviser divide up the pie for you. Yeah, I know it’s an extra expenditure. But an hour with a financial adviser could be the best money you ever spent. If you can’t agree with each other, maybe you can agree to do what the financial adviser recommends.
And if you get too stuck in fighting, there is a ton of help in our book Our Love Is Too Good to Feel So Bad.
