Updated on 09.17.14

Financial Planning: How My Wife and I Got on the Same Page

Trent Hamm

Smiling citrus couple by martinofranchi on Flickr!When my wife and I approached our financial meltdown, our financial planning and spending was in pure chaos. We both spent according to our whims and we tackled bills and such without any real pattern or consistency. Neither of us had any real idea what the other was doing financially, and we certainly didn’t have any big dreams that we shared beyond the nebulous “let’s build a house in the country” idea that we’d floated in a very vague sense for a long time but never bothered to make any more concrete.

Since then (about two years), we went from living in a crackerbox apartment to owning our own home. We’ve eliminated somewhere around $30,000 in debt (and rising fast). Even more importantly, we worked together to find options that made us both happier in terms of our careers and home lives and we settled in on some big goals. We’re on the same financial page, too – we both have a pretty strong grip on our current financial state.

How did we make this transformation happen? It’s a transformation I’ve alluded to on here before and one that many readers have asked about. Here’s how we did it – and how you can do it, too – step by step.

Step One: The Moment of Change
My moment of change was very specific: a long night holding my infant son and realizing that I needed to make some financial changes in my life. After that, I became really committed to change – I read tons of personal finance books, sold off a bunch of my stuff, and so on.

The only problem was that this was a personal epiphany – not one that my wife had shared with me. I already had my individual moment of change, but my wife had not. So, all I asked her was this: “Could we sit down and figure out where we’re at in terms of saving for a house?” She was a bit uncomfortable, but she agreed, and we sat down and simply talked about it.

I think, for her, the revelation that we were so far away from ever having a house of our own, even though we were making solid money, was the moment of change. I remember a Saturday afternoon a few weeks after my own revelation, sitting at the kitchen table with my wife as our son napped, going through our financial statements. More than anything, I remember her reaction as we rubbed away at the surface of things, looking at the stupendous amount of debt we shared and how small the assets we held actually were, and I remember saying, “We’re not going to be able to get a house any time soon. We’re not even close… we’re in trouble.” And I remember her shuffling through all of the papers, collected together for the first time, with a really worried look on her face, the kind of worry that I’ve almost never seen.

The important part – the part that made all of this work – is that we experienced this moment of change together. She knew I was scared. I knew she was worried. And because of that shared experience, we realized that we needed to work together to make some big changes in our life.

This is a difficult talk to have for many people, so here are some tips on getting started and how to follow up on it to reaffirm your relationship.

Step Two: A Commitment to Honesty
Prior to that talk, we never paid any attention to each other’s bills. If a credit card bill came in the mail with my wife’s name on it, it was simply something I didn’t touch, and vice versa. I had little grasp on her financial state and she had little grasp on mine.

We decided that this had to end – we needed to be fully on the same financial page. We adopted a new policy: anything that came in the mail could be opened and looked at by either one of us, no questions asked. If we talked about any money issues, we were allowed to say what was on our minds without any consequences in terms of hurt feelings or anything like that.

Something was financially wrong in our lives, and our best hope for fixing the problem was each other. We realized that every secret we kept from each other and every feeling we kept inside for “tact” was blocking us from going where we wanted to go. But where did we want to go?

Step Three: Shared Dreams and Individual Dreams
We spent a lot of evenings then talking about our dreams. What did we want to do with our future? We shared a dream of having another baby, hopefully a little girl and of someday owning a home. We had a lot of different dreams, too: I harbored dreams of being a self-employed writer and I also wanted to take some wonderful international vacations when our children got older. My wife had different dreams: she wanted to live way out in the country, she dreamed of being in our own house before our second child was born, and she harbored some long-term dreams of going back to school to pursue her master’s degree.

These were nice dreams – and surprising ones, too. In some ways, we had similar visions of where our lives were going, but in other ways, our dreams were very different. One thing we both realized, though, is that our dreams weren’t going to happen if we didn’t make some changes. We were throwing away our dreams on $50 meals, piles of electronics, tons of books, and lots of other unnecessary stuff.

Step Four: How to Compromise Without Giving Up Your Dreams
We tried to figure out which of these dreams were the most important to us. We decided to buy a less-expensive house first, live there for a while, then eventually build a house in the country like the one my wife dreamed about. We decided to go ahead and have a second child as well, and we recognized that in order to live out our other dreams, our first step was to get financially stable, with our debts gone and a healthy emergency fund. Without those things, we wouldn’t be able to have the freedom to allow me to chase writing dreams or for my wife to ever go back to college.

Our first step was to focus in on the dreams that we actually shared. That meant we decided to focus intently on our dreams for a house – that became priority number one.

Our second step was to builld a firm financial base for the things we wanted to do down the road. If we actually wanted to do things like take great vacations, look at new career directions, and eventually buy a patch of land in the country and build our dream home, we couldn’t continue to throw money down the rat hole of expensive debt repayments and stuff we didn’t really need.

Step Five: Turning Dreams Into Long-Term Goals
As we talked about these dreams, we realized how effectively they led straight into some medium and long-term goals. Here are the four big ones we committed to early on.

Our first goal was to build an emergency fund. We wanted to get a few months’ worth of living expenses in the bank so that our plans wouldn’t be derailed by things like car repairs.

Our second goal was to get our spending and debt both under control. Basically, this meant eliminating high-interest debt while weaning ourselves from a life filled with purchasing.

Our third goal was to start saving for our down payment and eventually buying a house. Once we built up that emergency fund and eliminated some of our most onerous debt, our savings would be redirected towards a down payment.

Our third goal was to smooth out any bumps in our credit report and maximize our credit scores. This meant paying every bill on time and getting our debt-to-credit ratio in shape.

Step Six: Turning Long-Term Goals Into Short Term Goals For Both of You
These sounded great and we both knew that achieving these goals was what we really wanted, but they were so huge and so nebulous that we realized we’d never make it based on these ideas alone. So we set some short term goals to help us with the day-to-day reality of things.

I found weekly goals helped me the most. I’d make pledges like “only one after-work stop this week” or “only $20 in entertainment spending this week.” I found that with small goals like this, I could accomplish them easily and also easily see how they were helping with the big goals. Plus, if I achieved the goals for a few weeks, I found that this new behavior was quickly becoming my normal habit.

My wife functioned better with monthly goals. She’d target things related to monthly bills, like “make a $300 extra payment on this credit card this month.” Then she’d use a gut check each time she went to spend to help her get things more in line. This doesn’t mean she abandoned all spending (neither did I), but seeing how this little move really fit into a bigger context really helped.

Filling our weekends with frugal projects helped, too. We did things like purge our media collections, install CFLs everywhere to cut down on energy use, learn how to cook at home and prepare foods for the upcoming week, find free things to do in the community, and so forth. We instituted money free weekends to teach us how to entertain ourselves together without spending money.

We constantly talked about and shared our successes on little goals – and big ones, too. It was great having a partner committed to the same things I was committed to. Without her, it would have been much more difficult to succeed.

We also looked for simple ways to move forward on our other goals as well. I was already committed to writing 1,000 words a day, but I didn’t really share it much at all and it wasn’t focused – it was mostly haphazard journal writing. I made more effort to share my writing with others, and with my growing passion about our financial recovery, I started The Simple Dollar to just practice my writing and share the experiences with others. I didn’t think that this would ever be a significant success – I mostly started it just to work on my own writing and share what I was thinking about.

Doing these things together encouraged us both to stick with it – not only were the goals short and manageable, but we both had cheerleaders and we both saw how they fit into our bigger dreams.

Today is the day to get started. Sit down with your spouse, find some shared inspiration with that person, set some goals together, then work together to make it happen.

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  1. It is sort of like having children. You cannot discipline at all if you do not show a united front. And compromise. Great Article.

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  2. Amanda says:

    Fantastic article. It sums up your whole website/viewpoint…sort of a singular statement of life-purpose. Is it wrong to say that I almost like the picture more?! Unusual for your site & fun : )

  3. KellyB says:

    Great post Trent. Thanks very much for sharing your process with us. I’m lucky enough to also have a partner who is on the same financial page, and it makes a world of difference when 2 people are committed to reaching goals together!

  4. SP says:

    Excellent post Trent.

  5. Janet says:

    Good article. About that $30,000 debt you mentioned–found myself wondering if it was installment, revolving, or a combo. Personally, I think that installment (credit) debt can feel so much worse–shameful, even—than something like carrying a car loan, which seems more understandable or even noble! Just thinking out loud…

  6. Valerie says:

    Very good article. I have never understood why people get married and keep their finances separate!? You have to work as a team to be successful.

  7. Ryan McLean says:

    I am looking to married in the near distant future, and although I know a fair bit about money (I run my own financial blog too) I don’t know a lot about money in marriage, because I myself have never done it. So this post is great for me. Really clear and straightforward and really helpful.

  8. It was really touching to read your story about your financial turn-around. My experience is kind of similar and me and my husband are also working as team to get ourselves in good shape financially.

  9. J.D. says:

    Valerie said: I have never understood why people get married and keep their finances separate!? You have to work as a team to be successful.

    It’s perfectly possible to work as a team without combining your finances. Millions of couples do it all the time.

  10. Julie says:

    I really liked this post. Once again, you provided a very practical commentary on your experience shaping up your financial situation. Even though my husband and I have always been pretty good at communicating about our finances, it’s becoming more difficult as things become more complicated. This was a nice reminder that we can do this, and we need to keep communicating!


  11. Trent! Great post! Almost a tearjerker!

    Hey, here is a question for your reader mail bag: How is the diary you are keeping for your two kids going? You had 100 goals at one time and you narrowed them down to like 5 goals and that was one of them.

  12. Shellie says:

    I have been reading your blog for a while now, and have really enjoyed some of your tips for living frugally. My hubby recently had his hours cut back, and we are trying to live even more frugally than we were already. We are a one income 5 person family, so it’s tight. My question is this… how do you manage to save when you are literally paycheck to paycheck for the basic necessities. Aside from the modem, which seems like a necessity, we are at bare bones, and want to “dig ourselves out”. Any tips? Thanks!!!

  13. expat says:

    It takes work, and admitting your own shortcomings, but putting your heads together with your spouse and talking finance can be very rewarding. You’re correct, Trent, it’s all about being open, and being honest, and working together.

  14. Jules says:

    My counterpart and I are of similar mindsets when it comes to money, which helps a lot when it comes to deciding which expenses need to be trimmed from where.

  15. Outstanding post, Trent. Very transparent. You are at your best when relating practical financial behaviors that evolved from your own relationship. I like how you and your wife pull together as a team and are supportive of one another’s dreams. Not every couple is as blessed. Thank you for such a great article.

  16. JReed says:

    When you marry someone, you are marrying the whole person’s “package” including his or her debt, credit ratings and assets. Unless there is a legal prenuptual agreement, there is no sense fooling yourself that your net worth is anymore than half of the marriage’s total assets minus the marriage’s total debt. Even if you divorce and one partner gets the home for the sake of the children, there is a financial reconcilliation when the children turn 18.

  17. Karen says:

    Valerie said: I have never understood why people get married and keep their finances separate!? You have to work as a team to be successful.

    I’m with you Valerie — When spouses keep their money separate, it’s too easy to get into/stay in the mindset that the money is not “ours” but “mine”. Too many arguments occur when trying to figure out who’s responsible for this bill, how much should I pay for that… Too much stress and arguing. Keeping our money jointly has allowed us to pay off all debt except one small mortgage and one vehicle.

  18. I just posted almost the same article on my blog this morning. I was pretty shocked when I saw you had one so similar up here. I like your steps though. I think the main thing our posts have in common is doing the finances together!!

  19. MoneyBlogga says:

    The key is definitely to be on the same page financially. My partner is the pragmatic one and I’m the gambler. Despite the fact that we enjoy the worst pairing in the zodiac, we’re finally taking steps to be upfront, honest and mutually in agreement on everything we do now. It has been very difficult though. My partner likes to play it super safe and I like to take huge gambles with large amounts of money. I am the one who tries the hardest to toe the line now. I really want my partner to enjoy the early retirement they crave and I don’t want to be the idiot who stood in the way. Life’s too short.

  20. Cindy says:

    This is excellent advice for married couples. I track the money, but if I leave it to hubby, he spends too much. It’s because he assumes I have everything covered, and what’s in his wallet is free, unless I have told him what it is to cover. :)

  21. danielle says:

    We have a monthly “State of the Union” over some wine to look at our progress towards our goals and to discuss best uses for any excess cash left over at the end of the month. Been doing that for years now, and it shows on our balance sheet.

  22. Gaia says:

    Thanks so much for this. What a great article!
    ps…I really enjoy your blog and have nominated you for a little award on my blog.

  23. M says:

    My husband couldn’t care less about our financial status, once a month he asks are we doing ok and I say yes and try to show him Quicken but he doesn’t want to see it. I’ve tried putting Quicken on his laptop and then download my updates to our statements, he said if he wanted to see it he would turn on my machine. Like Cindy hubby is a spender and was in a total financial mess, this is also why we don’t combine our money, he would find something to spend it on. So I am managing mine and his, working to pay the house off and working on an even bigger nest egg, and retirement fund. Everything is pretty much automatic if something were to happen to me, so taking over shouldn’t be a problem, but once he saw the avaiable cash it would be gone in an instant. Sometimes working together isn’t the answer, when I took over his money, he was in debt past his ears, his credit score was in the basement and he spent money like he had it, kind of like you Trent although he never had a money meltdown because he didn’t care. Now his score is near 800 and so is mine. Getting our new home loan was a breeze, even as banks were tightening money, ours tripped all over themselves to give us a loan, maybe because I almost had my last house paid off with them. This mortgage is the first and only loan we’ve both had our names on. So although working together would be ideal, it wouldn’t work in our case.
    Just sign me Keeper of the cash.

  24. plonkee says:

    Things like this, getting on the same page would probably be most helpful before you get married – although, better late than never, and not everyone can or wants to get married.

  25. one of nine says:

    Very good post, Trent! I grew up in a family with eight siblings and my husband grew up very wealthy, so we hold extremely different perspectives on money. However, with patient communication and understanding, we are learning to make it work. For example, I always go for the cheapest product which will probably break tomorrow, while my husband is more prone to invest in quality pieces. This keeps us very balanced in our spending.

    We have been together five years and keep most of our finances separate. What we earn individually goes into our separate bank accounts, although we share a few credit cards and are very open about the state of our accounts. The debt we share, we pay on equally (i.e, trips to Brazil to see his family, household appliances).

    However, the debt that I incur individually (new clothes) or the debt that he incurs (a new tool), we are responsible for that expense from our individual income. This REALLY helps us stay balanced and decide independently when it is worth it to splurge, because we each have our own budgets based on our income.

    For many years I saw my mother (a stay-at-home mom) spend a lot of my dad’s earnings on yard sale trifles and useless thrift shop junk. I decided I never wanted to get comfortable spending my husband’s income so frivolously, which is why we have chosen to keep much of our finances separate. Although some people may not see how this could work, it definitely does work very well for us!

    Thank you, Trent, for an important and fundamental post.

  26. Emily says:

    Thank you Trent. After a few nights discussing finances and not being on the same page, I could feel our newly married life already straining. This is something I can show my husband. (Plus, we don’t know you, which makes your advise impartial unlike our parents, siblings etc.)

  27. Fixing Broken Relationships says:

    Hello, I found your blog in a new directory of blogs. I dont know how your blog came up, must have been a typo, Your relationship blog looks good. Have a nice day. keep teh content coming…

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