How Savers and Spenders can Meet in the Middle When it Comes to Financial Planning

How Savers and Spenders can Meet in the Middle When it Comes to Financial Planning

April 19, 2024

Meet the Bickersons. She wants to save; he likes to spend. Couples can alter their behavior to bridge their two mindsets by considering these ideas.

Many divorces are fueled by disagreements over money. Couples can learn to compromise by agreeing to data-based financial planning that lowers the temperature on money-related disputes.

Start by agreeing on a budget split. You can set the ground rules by deciding how much of your incomes to share. For example, perhaps 75% of your income is jointly budgeted and the rest is split and controlled individually by each partner. This way, each of you can control some of your own money according to your preferences, while the bulk is allocated to expenses that you both agree upon. To implement this compromise, you can each have an individual checking account in addition to a joint account.

Set a spending threshold. Some couples may not want to have separate pots of money. In this case, consider setting a spending threshold that requires consensus from both partners prior to exceeding. For example, you might agree that unbudgeted expenditures above $300 per month require discussion with and agreement from your spouse. This way, each person can exercise their financial prerogatives without upsetting their partner.

Identify common goals. Many couples can agree that they would like to have a comfortable and secure retirement. This common goal can drive agreement on how much to put aside each month for building a retirement nest egg. Part of the agreement can center on how to fund 401(k) plans, IRAs, and other retirement accounts. Other common goals may involve putting money aside for your children’s education (satisfying the saver) and for home improvement (pleasing the spender). You may find there are many goals that you can agree upon.

Bring in a neutral third party. A financial professional can help keep the peace when savers and spenders collide. It’s the professional’s job to present accurate data so that everyone is working from a common playbook. They can also point out the implications of different choices from both short- and long-term perspectives. By sticking to the facts, couples are more likely to be objective when it comes to money and learn to coexist with fewer disagreements.

Money discussions should start early. There’s much to be said for addressing money issues when couples first get serious. The last thing you want is to discover fundamental differences only after your finances intertwine. Wherever you are in your relationship, contact me to review how financial planning can help you both satisfy your needs to spend and save.

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Expiration 04/24