Married to Someone Who’s Bad With Money? 11 Tips From Financial Experts
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What do you do if you’re married to someone who’s terrible with money?
You love them. But you hate the way they spend money, rack up debt and can’t avoid overdraft fees at the bank.
It’s important to do the smart thing here, because fighting over money tears marriages apart. Money fights are the No. 1 predictor of divorce, according to this study of national data.
What to do instead? For tips, we talked to experienced financial advisers who counsel couples about their money problems.
1. Reward Yourselves for Good Financial Decisions
If you end up managing your family’s money, help yourself out with a useful app or two. The power of the digital age is at your command!
One app we’ve road-tested is MoneyLion, a free all-in-one app for managing your personal finances.
MoneyLion offers rewards to help you develop healthy financial habits and will literally pay you for logging onto the app. Based on your income and spending patterns, it offers personalized advice to help you save money, reduce your debt and improve your credit.
2. Turn Their Shopping Habits Into a Moneymaker
Is your spouse a shopaholic?
You might as well harness that and get some cash back on their many purchases.
Does your spouse shop online?
One of our secret weapons is called Paribus — a tool that gets you money back for your online purchases. It's free to sign up, and once you do, it will scan your email for any receipts. If it discovers you’ve purchased something from one of its monitored retailers, it will track the item’s price and help you get a refund when there’s a price drop.
For more cash back for online shopping, try Ebates, a cash-back site where you can earn 1% to 25% on purchases you make from more than 2,500 online retailers through Ebates’ online shopping portal. It’s super easy — you don’t have to pay any fees, mail in forms or redeem points to get your money.
3. Cut Your Expenses Where You Can
You’re going to have to cut your family expenses wherever you realistically can.
To make it easy, download TrueBill, an app that’ll negotiate your bills, cancel unwanted subscriptions and refund your bank fees. On average, Truebill customers get $12 in credits off their cable bills each month.
4. Automate Your Savings
“[A] best practice is to automate your savings program,” said Andy Yadro, a financial planner with Googins Advisors in Madison, Wisconsin. “Have a set amount each pay period automatically transfer into a savings or investment account that doesn’t have a debit card attached to it. That helps keep the money out of sight and prevents easy access so it can continue to grow untouched.”
Automating — and growing — your savings doesn’t have to be hard.
Worthy is free app that invests your money in bonds and pays out a fixed 5% annual interest rate — around 100 times more than what you’d get from the bank. You can start investing with as little as $10.
5. Separate Bank Accounts Can Help Protect Your Money
“When it comes to couples, there’s typically only one person who wants to handle the finances, and sometimes the other person may quietly have their own money struggles the other person doesn't know about — large credit card balances or excessive monthly spending,” said Brett Anderson, president of St. Croix Advisors in Hudson, Wisconsin.
“I’d have separate savings, checking, investment accounts,” he said. “This should also include credit cards, loans, etc.”
If you need a quick, easy way to set up a secure checking account online, look into NBKC Bank. The Better Business Bureau A+-rated bank promises no hidden fees, impressive interest rates (.90% APY earned on your balance) and one box of free checks.
“I find it pretty common for married couples to have one spouse that runs point on the family’s finances and one spouse that usually isn’t as good with money,” said Yadro.
He recommends each spouse keep their own checking account, then open one jointly owned account. Most of your earnings funnel into the joint account, which you use for living expenses and savings goals. Each of you has a small percentage of your own pay that you can spend guilt-free on whatever you please.
6. Agree on Who Holds the Purse Strings
If your spouse is bad with money, you’re going to have to decide how much control you want to try to assert over the family finances. Only you can answer that question.
“It is not unusual with couples that one person is better at dealing with money than the other. After all, opposites tend to attract,” said financial adviser Karen Lee, president of Karen Lee & Associates in Atlanta, Georgia.
“The most important part of this situation is to recognize it and to mutually decide to let the person who is better with money handle it. But if the person who isn’t good with money is also a ‘spender,’ this can be a challenge.”
If you end up handling more of the financial load and managing your family’s money, consider helping yourself out with a free financial assistant.
When you sign up for Status, you’ll be able to compare your financial choices with your peers (though anonymously). You can compare everything — from your spending and income to your debts and investments. Even check out how your net worth and credit score compare.
OK, but you’re asking: How is this going to help us? Won’t it just make us feel bad about ourselves and our budgets?
The purpose of Status is to help consumers make smarter decisions — to add a layer of transparency. By doing that, you’ll be able to see if you’re paying an insane interest rate on a loan, if you’re earning way below average, or if you’re spending a little too much.
7. Watch Your Credit
A little reality check here: Remember that once you’re married, your spouse’s debts can become your problem.
Once you fall behind, you may find yourself getting crushed by credit card interest rates north of 20%. You’ll never catch up that way. You’re spending so much on interest, you’ll never pay off your balances.
If you’re financially treading water like this, it might be worth consolidating and refinancing your debt to get a lower interest rate and one simple monthly payment.
Make sense but don’t know where to start? Credible is an online marketplace that offers consumers personalized loan offers. It’s best for borrowers who have good credit scores (think: around 640 or higher), andit lets you quickly compare rates without visiting a bunch of sites.
Your spouse’s shaky credit score can also hurt your chances of getting joint credit at good interest rates — like if you want to buy a house.
To get a better handle on what your credit looks like, check out a free app like CreditWise© from Capital One. You’ll get a free credit report card to show you exactly where your credit shines… and where it could use some improvement.
Advertiser Disclosure: Capital One compensates us when you enroll in CreditWise using the links we provided above.
8. Make Smart Spending Choices Together
Managing your money is so complicated — and a spendy partner can make it even tougher. You might want to work together on a budget, but what if you end up bearing the brunt of the work?
Everybody could use a little high-tech help.
For that, we found an app called Empower. It’s like having a personal financial assistant in your smartphone, and it has this cool “find free money” feature.
Once you link your bank account, Empower will help you set up a monthly budget and monitor your account to see whether you're paying too much for your bills and look for opportunities to save.
9. Don't Ignore Student Loan Debt
Does your spouse seem unconcerned about the weight of their student loans? If you can't agree on what you each considered keeping them “under control,” you could be dealing with debt you hate for far too long.
Here's a little tip you can pass their way: A lower interest rate could be one of the best steps to paying off student loans.
Try getting a lower interest rate on your federal and private loans by refinancing with a company like Credible. Other companies offer similar services, but we like that the average Credible user saves about two interest points on their current federal loans.
It might seem like a small difference, but a lower interest rate can mean a lot of savings over time. It’s helping grad Ashley Williams save more than $18,000 in interest over the life of her loan!
10. Find Ways to Spend Money That Make You Both Happy
They say money can’t buy happiness. And sure, that’s true. Even we can concede that.
But shouldn’t you get the most happiness you can from your money?
There are plenty of apps on the market that will try to help you, but they might leave you feeling frustrated and hopeless at the end of the month. It’s tough giving up every bit of happiness to stick to the budget a robot created for you.
That’s where Joy can help. It’s a free iPhone app that’ll help you save and spend money in a way that doesn’t compromise your happiness.
It will help you figure out the art of giving and taking. For example, if cutting out that morning latte is going to cause your spouse to pull their hair out by noon, don’t do it. Joy’s personalized money coach will help you find ways to save elsewhere.
Hey, no judgements here. Without coffee, we’d lose our minds by 10 a.m.
11. Understand Why
If your spouse is terrible with money, veteran financial adviser Maggie Johndrow offers a fundamental piece of advice: “Understand why your partner is bad with money.”
This might be a good place to work with a financial advisor or a marriage therapist, says Johndrow, a financial adviser with Farmington River Financial in Hartford, Connecticut.
“Is your partner a big spender because they grew up poor and now they have the means to buy what they want?” she asked. “Or are they very risk-averse because of a financial tragedy that occurred in their past?”
Understanding each other’s money story will increase the likelihood you’ll work together financially.
Bonus: No Matter What, Work Together
Money management guru Dave Ramsey has strong feelings on this subject.
“Marriage is a partnership,” he writes. “Separating the money and splitting the bills is a bad idea that will only lead to more marital problems down the road … Put all of your money together and begin to look at it as a whole.”
Whatever you decide is best for your bank accounts, heed the point of his message: You’re both on the same team, so work on the budget together.
Above All, Communication is Key
All the experts I spoke with said some version of the following:
More than anything, it’s important for you two to really communicate. Perhaps schedule a weekly sit-down just to talk about money. That way, each of you understands where your spouse is coming from.
“When I have couples who are paying off debt, struggling to keep a budget or otherwise experiencing financial friction with each other, I invite them to hold a weekly financial meeting,” said Justin Chidester, owner of Wealth Mode Financial Planning in Logan, Utah. “No judgment, no blame and open listening.”
Know this: Being secretive about finances is the No. 1 financial deal breaker for couples, according to a GoBankingRates survey. It outweighs overspending, having too much debt, being too cheap or not making enough money. Keeping secrets was the biggest sin.
And remember: Whenever you get frustrated, think of those marriage vows.
For richer, for poorer… ’til death do us part.
Mike Brassfield ([email protected]ennyhoarder.com) is a senior writer at The Penny Hoarder. He is married, and he’s terrible with more things than money.