Last month, my husband and I celebrated our 10-year wedding anniversary. Three kids. A dog. A few jobs. A handful of addresses. A bunch of financial headaches. And even more sunshine after each storm.
Celebrating our 10-year marker we felt accomplished. Weathered. We felt like young, seasoned warriors who had made it through a few battles and a few storms. Knowing there will be more ahead but feeling stronger than ever before. If we feel this way at 10 years, I can only imagine how we’ll feel at 20, 30, 40 years – God-willing.
We are still learning from our mistakes. And we do not have all the answers.
One area where we have found success is within our household money management. This does not mean financial abundance. It means management of money based on means. Financial literacy. I have been asked numerous times how to best handle and structure household finances. When deciding if the approach outlined below is right for your household, consider your own personality traits and risk tolerance levels.
Today, I share our personally vetted and practiced tips for household money management.
Always the Numbers
Finances are a primary source of conflict within relationships. Communication on household finances is critical. Here are current statistics that will emphasize why it’s important to open a financial conversation with your partner.
- 73% of mothers are experiencing a level of financial stress (State of Motherhood – 2024)
- Childcare is listed as the second highest expense for households only behind Mortgage/Rent (State of Motherhood – 2024)
- 86% of couples that have been married for 5 years or less started their marriage with debt. (Ramsey Solutions – 2021).
- 57% of mothers are financially “on track” or “almost on track” meaning they are living below their means and saving something for the future (State of Motherhood – 2024)
The Next Step
Here we are. 10 years of marriage. 10 years to personally test. Tweak. And refine.
Top 10 Tips for Household Money Management
- Start with openness and honesty. Have an open, honest conversation about existing debts. Student loans, credit cards, car loans, personal loans, etc. If you ever purchase a home or business (as a couple) your financial history will be aired. So, hiding credit card debt or a secret bank account will not bode well for building trust within the relationship. It’s never too late to be honest.
- Household whiteboarding. Yes, we have pulled out the wine. And the whiteboard. And written down our goals corporate-boardroom-style. And we have fun with it. Understanding each other’s individual goals and aligning on household goals puts both people working in tandem. We are two individual humans.
I will use a hiking (or skiing) analogy. You may choose a different trail from your partner and still reach the same goal at the same time. Sometimes the trails will merge. Sometimes they diverge. Some trails are harder and more adventurous. Some are easier. You both can decide along the journey to take the easier trail together or the harder trail together. Or go on your own terrain park adventure knowing you’ll meet up again shortly. All of this is allowed and fun!! Most importantly, the journey is fun because you communicated your individual and household goals. And you’ll get the occasional moose blocking your path or “trail closed” sign and you come back together and choose your best step forward together as a team.
- Money focus. As part of goal setting, remember to discuss financial topics in addition to non-financial goals. Here are some important money-focused goals to discuss. Establish specific dollar value and timeline for the following: emergency fund (think: medical surprises or car repair), short-term savings (think: vacations or annual insurance payments), long-term savings (think: house down payment), short-term investments (i.e. portfolio diversification), long-term investments (think: retirement), debt reduction plan.
- Create a plan. How do you reach your goal? Through a plan. Also known as budget. “Budget” is seen as such a stressful word. But it is simply your plan on how to reach your goal. Your plan is allowed to change. Plans change all the time. But it is important to know what is required for your plan to make your goal(s) a reality.
- Simplify money life. I regularly see married couples Venmo-ing each other for utilities or rent. For me personally, this is an administrative burden I wanted to get rid of fast. Consider a household checking account and savings account. Also consider having both individuals with their own personal bank accounts at the same financial institution so if money transfers need to be made, they can happen instantaneously rather than through a 3rd party app. Similarly, you can do the same with credit cards. A household credit card account with secondary cardholders and still maintain a personal credit card.
- Monetary household contributions. It is easy to fall into the trap of “I make X. This is my money.” But if you are aligned on household goals then “my money” falls away. Because you both respect the household and individual goals. There have been years when my husband contributed more to the household income than me. And there are years where I contribute more to the household income than my husband. We focus (and check in regularly) if our current monetary contributions are working for our household and for ourselves as individuals. Rather than focusing on percentage of income or equality of contributions we focus on our household and individual goals first and foremost. With this as the primary focus, we can calculate how the contribution will occur. I must emphasize, each year is different. There is not one magic mathematical calculation for this but rather open communication on needs, wants, and aligned goals.
- Allow financial independence. This was an area we did not realize was so important in our early marriage years. At first, we combined all our finances and set our budget entirely together. We quickly realized a lack of independence formed and a permission system had been created (unintentionally). We kept our household budget but added personal allowances for ourselves to keep our personal independence.
Examples of this could be personal checking accounts, credit cards, or savings accounts. Discretionary spending where no permission is needed from your partner to make the purchase. Set limits to the discretionary spending that is reasonable to your household income and to your personal/household values!
- Know personalities. For the couples that need to see everything - keep all accounts and balances out in the open for both partners to see. For the couples that need "out of sight, out of mind" then hide it away and put one partner in charge. This can get contentious very fast if your partner does not know about your "cash stash account" or does not have access to it. I encourage open communication. At a minimum, communicate that the account exists. I have heard about entirely "secret" bank accounts kept away from a partner. If this is a consideration, then I encourage you to check with yourself internally as to why you feel this need.
- Allow flexibility. Check-in. Life happens. Life changes. Plans change. We are all human and we’re allowed to change our mind on goals. The sooner this is communicated to your partner the more you both will stay aligned.
- Celebrate. Take the time to look around and truly enjoy the moment when the goal is reached. It is so easy to look ahead to the next goal. Enjoy the journey. And celebrate the win!
When the financial house is organized, your mind is given the space it needs to work on other areas of life as an individual and with your partner. I would personally argue, in our current society, money is essential for Maslow’s Physiological Needs of food, shelter, clothing, and even sleep.
In my next decade, I am eager to focus on my personal mission statement through my role as wife. One of my many roles. So, my own step forward is the following: Enhance LOVE, Embrace GROWTH, Allow SPONTANAITY, Communicate PUZZLES, Build STRENGTH.
Truly,
Helen