According to a recent article in the New York Times, about 45% of marriages today end in divorce. Financial disagreements often plague many marriages, so it’s important to keep that area of your life clean of pent-up emotions. One way to do that is to incorporate a Monthly Money Meeting into your schedule.
In the last article, I discussed Mindful Cash Flow which is a great tool for the Monthly Money Meeting. Using an effective cash flow system, you can see at a glance your proposed monthly spending plan, the amount actually spent, where it was spent, and then have the opportunity to design the spending for the next and future months.
By incorporating an intentional Cash Flow system into your Monthly Money Meeting you may avoid the kinds of blame or shame that often enter into such discussions. Instead, you can focus on what is current at the particular moment and move forward from there.
Review each category and discuss any future expenditures you can foresee, especially those you might have missed earlier. If disagreements arrive on past decisions, create new criteria for spending such as checking in before either of you spends more than x amount on any particular item. Set up discretionary accounts for each of you so you don’t have to answer to the other for everything you buy. Use that money for something you want but your partner may not value as much as you do. You can also use that money to buy gifts for each other. It’s no fun to receive a gift and then see it as a surprise on the next month’s credit card bill.
Many years ago, I took a course in divorce mediation because I saw that problems in a marriage often show up around money early on and I was frequently the first outsider to see them. I wanted to have some skills in offering emotional support to clients who were working through their financial disagreements.
One particular couple had very different opinions about credit card debt. One spouse wanted to keep them out of debt and scrimped and saved in order to do that. The other spouse felt fine with debt since he was saving regularly in his 401k. He believed he was being completely responsible because he was saving for the future and the debt always got paid off (by his wife). This cycle repeated itself several times. Finally, the husband drove home one day with a new corvette which was a complete surprise to his wife. She responded by filing divorce papers shortly thereafter. It’s unfortunate that the differences weren’t worked out before the explosion.
Here are some practical guidelines for your Monthly Money Meeting.
The primary money handler in the partnership should prepare for the meeting by having the following reports current:
- Your Mindful Cash Flow budget, including your monthly fixed expenses.
- Your Quicken cash flow report for the previous month.
- A list of any upcoming but periodic expenses such as property taxes, car insurance or maintenance or home maintenance
- A list of any new spending desires such as new appliances, decorating, and vacations
- Are you on track?
- Are you able to pay off consumer debt in full monthly?
- Anything unusual about this particular month?
- Any unanticipated or unplanned for future expenses? If so, how will the spending plan be revised to handle this additional expense?
- Any changes desired by either partner? If so, what? Develop new criteria so the conditions are clear for both of you.
- What changes/revisions/ improvements can be proposed for next month?
A partnership can be a source of great comfort and support. That partnership becomes even stronger when financial goals and day-to-day practices are aligned.
I’m very interested in hearing how this works out for you. Please let me know.