Saturday, January 22, 2011

Cheating on Your Spouse with Money

Another Savings Saturday feature, this time brought to you by KSL.com.  They had a great article on Financial Infidelity. See the Article Here.  In my career and life I often talk to people who are struggling financially and with their marriages.  Often the two are connected, where one person is spending the money while the other doesn't know.  When one spouse finds out, the other is most often upset.

KSL's article talked about some of the causes for this infidelity from AAA Fair Credit Foundation President Preston Cochran:
  • The one who handles all the finances. Cochrane says when one person has no input into the family's bank account, the other person has a clear path to sneaking away with extra money. He gave an example of one person going to the store to buy groceries, then sneaking $40 out of the account when asked if they want cash back. The person who doesn't look over the bills might not notice the fact that not all of the money they spent actually went to buy groceries.
  • The main breadwinner. In some instances, Cochrane says the person who makes the most money for the family feels a sense of entitlement to spend it.
What are my solutions to the problem? Well here are just a few:
  1. Stop saying..."my money or your money."  "It is our money," no matter who makes it.  
  2. Have a weekly budget meeting.  At the beginning of each week, you must sit down and discuss your finances together. You may still argue about what to do with the money, but at least you know when to do it.  At this meeting discuss every expense and every bill.  Review it weekly to make sure you know where your money is going.
  3. FULL DISCLOSURE!  You must talk together about where your money is going and trust each other.  This can not be done if you are not open.  
  4. NO SECRET ACCOUNTS!  Nothing hurts people more than to know they have a secret stash.  You are in this together, so join your accounts together and keep each other honest.
  5. Set up E-Alerts.  Either through Mint.com or your financial institution. Goldenwest Credit Union offers their E-Alerts for free.  This sends text alerts and balance info to both spouses when ever money is spent.  This REALLY keeps you honest.
  6. Be willing to compromise and change.  This new method of thinking will be hard at first, but the rewards are amazing.  You just have to be willing to change and work together.
We personally have gone through this transformation.  My wife and I did not communicate well about money.  But three years ago we made the switch and it has been amazing for our marriage and finances.  I promise you it is worth it.  

I welcome your comments and other tips.

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