Financial Literacy Friday: Involving Your Spouse
Welcome to this week’s edition of Financial Literacy Friday! Last week I wrote a few posts inspired by a close friend’s wedding, and how to build a good foundation of collaboration over finances. Today I wanted to spend a bit of time really exploring the idea of involving your spouse in the financial decisions. While this doesn’t necessarily fit into standard financial literacy like compound interest or risk, it’s so vital that I wanted to include it in this series. I know that it can be much easier to just have one person take control of the family’s finances, but that can lead to some serious problems later on that are definitely better avoided. Let’s take a look at some reasons to include your spouse in financial decisions.
What if Something Happens?
The biggest reason to share financial decision making is because of what can happen in life. If the person who does all the financial decision making and budgeting gets sick for an extended period of time or disabled, the other spouse is put into a unenviable situation of having to care for their partner as well as take on all the financial decisions. If they have had no experience in dealing with their household finances, this can be an incredibly daunting task. Involving both partners in this process can be a great way to make sure financial obligations can still be fulfilled in case something happens to one of you. You’ve decided to work as a team through life, and finances are certainly benefit from a team approach.
Aside from death, disability, and sickness, there’s another major life event that can mean real problems for one partner, and that’s divorce. Obviously this is not a situation that you as a couple want to spend time thinking about, but it does provide a great impetus for being involved in the family’s finances. If one person takes care of all the finances and the marriage ends in divorce, that other partner is going to be in serious trouble. There have been a number of studies that show that after divorce the uninvolved partner can have a very hard time getting back to a comfortable lifestyle. Unfortunately, this seems to be most commonly women, so it’s necessary to advocate for yourselves and be involved in the financial aspects of managing a family. You never know when you’ll need the skills you learn, and while you may never use them they could save your well-being. Managing finances together is vital simply because you never know when it could all fall to you, as well as fostering teamwork throughout the relationship. That brings us to our next point:
I touched on this in previous blogs, but working together can further strengthen a relationship. Perhaps one or both of you have very strong feelings about money and through collaboration you’re able to work through those issues and come to a mutually beneficial solution. This requires strong communication, which is crucial in a healthy relationship as it can quickly become an emotional subject, but having both partners on the same page is incredibly important to building a strong relationship. Medical professionals tend to fall into this trap fairly often because they are generally the breadwinner in the relationship and they feel as though they need to make all the decisions. Remember, you chose your partner for a reason, so let them help you when it comes to finances and it will take a lot of stress off your plate in the long run.
Check Against Spending
Involving your spouse can be a great way to make sure your spending habits don’t spiral out of control. With two people instead of one, it’s far easier to be conservative with your spending and focus on long term goals because you’re not always at the whim of your impulses. This goes back to making sure you’re both on the same page in terms of what your goals are, but once that’s accomplished having two people keeping you on track is much easier than one. This also fosters accountability, where both of you are accountable to each other and your goals, instead of one person who could be more easily swayed to pursue short term distractions.
This is a quick list of reasons to include your spouse in the household financial decisions, especially if you’re a doctor or nurse. What reasons helped you get your partner involved? What were the reasons you used to just have one person control everything? Let me know if the comments below, I’d love to hear your story.