Interview With a First-Time Dad (Part 1): Managing Finances as a Couple

According to the Huffington Post, arguing about money is the top predictor of divorce. It’s not children, sex, in-laws or anything else. It’s money — for both men and women.

A study, titled “Examining the Relationship Between Financial Issues and Divorce“ published in 2012 in the Family Relations journal, arguments about money tend to be longer and usually more intense than other types of marital disagreements. Money fights can actually be about deeper issues in the relationship — power, trust, etc. If these deep issues in the relationship are problematic, then these couples may be more likely to divorce and the stress that accompanies financial problems may overwhelm couples.

Additional interesting facts surrounding money and relationships according to CNBC include:

  • 35 percent that experience relationship stress said money was the primary cause of friction.
  • 47 percent of the respondents had different saving and spending habits than their partner.
  • 36 percent do not consult their significant other about even large purchases.
  • 55 percent believe strong budgeting/saving is the most appealing money-related quality of a potential partner.

So seeing as how I haven’t had a ton of experience with navigating finances with a partner, I reached out to a former co-worker who quite frankly, I consider a lot more “adult” than me. He has a wife, house, a child on the way, and a dog too! Needless to say he’s had to sort through all of this nonsense already.

Check out my interview below for his strategy and advice for managing money in a relationship.

Tell me about your relationship.

I’ve been in a relationship with my wife for 14 years. We started dating when I was a senior in high school and she was a junior. We are expecting our first child in three weeks! (More on that to come.)

I am a budget nut and she is more normal and loves me despite of it. 

Can you give me a broad breakdown of your finances?

Our biggest expense right now is our mortgage which is $1,600 a month. The cost of our house is $280,000. I just bought a car where I put $13,000 down and am financing the rest. (I put $8k down and my stepdad gave us $5k as a gift.)

We are fortunate enough that we don’t have student loan debt because my wife received a scholarship to undergrad and I had inheritance from relatives. (I know, *eye roll*) We chucked a lot of money right away at her loans for law school (about $60k) and paid them off in five years instead of ten. Any extra money we got for Christmas or birthdays we just hammer down that loan. I believe the interest rate was 6.5%.

So our only debt is our mortgage, my car, and some credit card debt but we always pay that in full every month so we don’t pay interest.  

How has money evolved in your relationship from dating to marriage?

We did not mix our finances until we moved in together in 2010. I typically paid for things because I was working and my wife was in law school. Now we most of our money combined and we attack any expenses together.

Did you discuss money before marriage? What about a pre-nup?

Pre-nups aren’t for us. We are in the “It’s not romantic” crowd. We’ve always been forthright about our salaries.

Did either of your parents have any influence over how you tackle money in your marriage?

No, my mother is pretty savvy with money but it is pretty taboo for us to talk about it. Her parents think I am a little nutty with my tracking so to avoid being semi-judged, we don’t talk about it with them either.

How would you describe how money is currently handled in your relationship? Is there anything you would change?

I tend to handle the money the most. I pay all of the bills and I circle back with my wife when there are any red flags. I am very anal about knowing where all of our money goes. I have a budget spreadsheet where I track down every amount earned and spent. It used to actually bug me if I go out to dinner and don’t come home and log it right away. I am glad I have a patient wife.

Before 2017 was over, we both sat down and looked at our spending for the year and found red flags, pain points, and upcoming costs. Areas we could improve on were mostly eating out less and spending less on transportation. We both commute an hour but expect that to go down once we move to the suburbs.  

As far as changing anything, I wish my wife was as interested in the budget in general. I just don’t like that I am doing all this work to make sure we’re spending wisely and it seems like a burden for her to sit down and discuss it sometimes. She is typically great at tolerating me and it though.

You say your wife isn’t as interested in personal finance as you. If something God forbid happened, does she know where your money is?

Yes, we have a financial advisor and she has the logins for our credit cards.

That’s great! It’s important for both individuals in a relationship to have transparency into their finances. So tell me, how do you divvy up your paychecks to pay your expenses?

How we do it is that we have a shared checking account, shared savings account, and then two separate rainy day accounts for the both of us. We allocate $25 a paycheck or $650 a year for whatever we want in our rainy day accounts. I use it for fantasy baseball, lunch/dinner/drinks out with friends, gifts for her, etc. Stuff that I don’t think our joint account should pay for.

Otherwise, everything else from our paychecks goes into the savings and checking accounts we share.

That’s very interesting. I’ve heard of couples allocating the same percentage to a shared account but keeping most of their money separate. How come you didn’t want to go that route?

To us, it doesn’t matter who makes more money. We both have jobs, we both make money and that’s where it goes. I find it more complicated to have everything separate.

My brother does it the way you mentioned with his wife, but we do what works best for us.

You seem to be great at tracking your day-to-day expenses. Do you track your net worth as a couple?

I do not track our net worth. It would drive me crazy to see a +$10,000 or -$10,000 for whichever way the stock market goes. I check in with my financial advisor every six months or so to see how our investments and the bigger picture are doing.

Additionally, my biggest flaw is that while I track money by the year, I don’t always have a plan on what to do when I have a surplus. The last few years have been better because I used surplus to buy a car or now would likely be put into a college fund. In previous years it would be like “Cool, I have extra money!” I would recommend that surpluses be used to pay down debt, when needed, so if you have a student loan, use the majority of it towards that (and maybe hold on to a little to buy yourself something nice as a reward for doing good!) That’s the thing with tracking, you can get obsessed with saving money that you forget to treat yourself from time to time.

I don’t think the solution is to track everything but I think the problem is that people have no idea where their money goes. I started tracking our money because I wanted to see how much I spent on eating out, etc. and when I figured it out, I was really mad at myself. 

What are you and your wife’s short and long-term money goals?

The weird thing about me is that I track money by the year. I try to get everything accounted for before the year is up. For example, I bought batteries and air filters for year 2018 at the end of year 2017. My short-term goals are to have surplus of items we need. Oh, and I need to look into life insurance and a 529 plan for my baby’s college.

Long-term, I am planning out the expenses for our first child. When we decided we wanted kids, I started putting money away. So continuing to add to that account is important for our future. It’s long term money that for now, is out of sight, out of mind.

What do you think are the most common financial problems couples face?

Like I said, I wish my wife was as interested in our finances as I am. I know a lot of people that are not good with money because they don’t track where everything is going. Knowing that and coming to a conclusion or decision together could probably subdue a lot of fights.

For a while I thought my inheritance was sacred and I thought of it as “my money.” After we got married, I figured we are in it together. I also personally believe that couples can make the wrong decisions when they start thinking of their finances as “yours” and “mine”, but to each their own.  

How do you manage finances in your relationship?
  1. June 27, 2018
    • June 27, 2018

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