Elle Martinez specializes in helping couples work together on figuring out their money issues. As the head of Couple Money, she's worked out everything from savings to retiring for couples. She talked with us about how couples can better handle their cash.
What are some common reasons couples argue about money?
I think one big factor is that couples don't really understand how their spouse relates to money. We say that someone is a spender and someone is a saver, but it's deeper than that. We pretty much all spend and save - it's just on different things. Most times it's because of our personal experiences with money growing up and being on our own.
I think when you have an idea of the "why" behind each other's spending, it's easier to tackle what the issue is. But many times, we seem to be stuck on the surface level - what do you want to buy or spend our money on. It's one thing to say, "Let's get a house and save for retirement" and another to talk about why you have these goals. Do you eventually want to have your own business? Do you want to have kids? Do one or both of you want to cut back on work so you can stay at home with them?
Another factor is that we don't want to be judged for choices that we have made. We all have some bad money habits to various degrees; it's a part of learning, and for some of us, we're still paying off those debts. Your Money or Your Life has a great phrase for that - make peace with your past. You two are now a team, and the goal is to help one another succeed and become stronger for it.
How much friction should couples expect when merging their finances?
I would say it depends on the personalities involved and on where they are starting from financially. I've heard from and read about couples who were complete opposites with finances before they got married, but they were up front with one another and determined to work it out.
I believe most people want to succeed, but I think how we talk about money with one another is the source of friction. I would tell everyone to expect to make mistakes and to be open to each other about what you think is working and what it not. You also have to really hear your spouse out when they do the same.
For us, we started by opening a joint savings account when we got engaged. As we got an idea of what our monthly budget would look like, we opened a joint checking account and transferred our money into it. Even though we had a basic system in place pretty quickly, it took us time to tweak and adjust it so both of us were happy with it.
How can spouses keep each other on track financially?
I'm a huge fan of having a monthly review as a couple. It doesn't have to be a formal thing where you pull out the calculators and paper - I'd prefer just talking about it over some pizza and beer. You're just touching bases with each other on the accounts and making sure everything is going all right.
I also suggest just having fun with it. Every once in a while, my husband and I come up with some sort of friendly competition to cut back and save a month before a vacation or our anniversary.
One reason I love using tools like Mint is because it takes the guesswork and the "boring" part of our budgets out and allows us to focus on other things. Within minutes, you can pull up a graph or chart that shows you where your money went. The two can pull that data up while you're eating and see where you did well and where you can improve.
What are some common financial issues that couples need to be honest with each other about?
The biggest is debt. I don't believe anyone wants to admit to having more debt than the other. I know this from personal experience - when we got engaged, we talked about finances and I discovered that I had much more debt than my now husband. He had a small student loan (which he planned to pay off within a year of graduation) while I had some credit card debt, a car loan and a larger student loan bill.
Did it feel great at that time to be sharing about how I got into it? No, but I'm extremely happy that I did. It gave me the boost to pay off my credit cards before we got married, and we came up with a plan to pay off the car loan early. I felt great having everything out in the open. My husband was very supportive during the whole thing.
If a couple has two different financial philosophies, how do they reconcile them?
I'm working with a series on right now that is going through some common scenarios where one spouse is trying to help the other save, budget or invest. There is no one size fits all, especially with couples, but there are a few principles to keep in mind that can make things easier on the two of you.
Start small. Even if you are 100% right (which is rarely the case), expecting overnight changes is unrealistic. For example, if your spouse doesn't really save, then try working together to save for your next vacation.
Respect their ideas. You may have some big wins that could help you two save huge, but your spouse doesn't want to do something so drastic. Try some of their suggestions and build from there.
Make it easy. Once the two of you come up with a plan together, go ahead and set up automatic transfers into savings. Every week, celebrate how much you saved.
If anyone has ideas and stories about how they made it work as a couple, I'd love them to contact me about them!
Where will couples turn for help in the future?
With time being a constraint on many couples, I see more and more turning to banks and credit unions that allow them to handle all of their banking needs on mobile device. With our joint accounts, I find having an app on my phone makes it incredibly easy for me to stay on top of our finances. As a freelancer, I really appreciate how mobile deposits are becoming easier.
I think smart wallets will also become a popular tool with some couples. The question is whether you can balance their convenience with spending habits. I can see some people having a hard time cutting back on it once they get started.