Household vs. Personal Finance
Most tips and suggestions for better personal financial management fail because more than half of American adults share financial responsibilities with another adult. If you are married, you already know that money management is not a personal but a household thing.
Successful household financial management requires two adults to work together on money issues, not separately.
A weekly financial huddle between two spouses or partners is the best solution for getting them both on the same financial page and harnessing their strengths for the best results.
The Household Money Problem
Search the Internet for tips and tricks to make money management easier and more successful, and you will find no end to the great ideas people have come up with to improve personal finances. Typically, such recommendations and tools come in the following three categories to improve your personal financial behaviors:
Theories and practical ideas
Household Financial Management Is More than the Combination of Two Views of Personal Finances
Most recommendations have to do with personal finances. They fail to address the added relationship aspect in household finances.
According to the US Census Bureau, over half of American adults are in a married or non-married, committed relationship. That means that most American adults share their household financial responsibilities with other adults. More than half of American adults do not have personal finances.
It is no wonder, then, that we blame money for so many divorces and breakups. In reality, money is just a tool to help us get what we want. Couples usually do not argue about the tool. They argue about how to use the tool and what they want to build with the tool. When your financial goals differ from your partner’s goals, you are bound to argue and get frustrated.
Household financial goals, mutually agreed upon and written down, are the surest way to minimize arguments about money in a marriage.
The Huddle Is the Answer
Fortunately, there is a simple answer to taking care of most money problems between spouses and partners. It is the Weekly Financial Huddle, and it takes just 10 to 15 minutes a week after a little preparation work.
Before the Huddle:
Agree with your spouse or partner to meet at the same time on the same day every week
One of you needs to balance the bill-paying account (cash, checking, debit, or pre-paid) ahead of time
Discuss financial goals that you can both agree upon, such as vacations, retirement, homeownership, debt freedom, etc. Write down one to three goals that are specific, measurable, attainable, relevant, and time-bound (SMART goals). Post the goal(s) in the place where you will hold your weekly huddle.
During the Weekly Huddle:
Briefly review your household financial goals (1 minute)
Note the current balance available in your cash account (1 to 2 minutes)
Identify the bills due in the coming two weeks and determine which spouse or partner will make the payment and whether you will pay them with cash, debit, check, online, etc. (1 to 5 minutes)
Ask each other: what can we do this week to set aside an additional $5, $25, $50, or $100 toward our household financial goals? (1 to 2 minutes)
That is it. Simple! With these four easy steps, you have become a household financial team rather than two individuals dealing with personal finance issues.
Want to Expand Your Huddle?
If you want to take the huddle to the next step, you can add 2 or 3 minutes for one or both of you to share a personal finance recommendation or tip you read of or heard about during the week. If you choose this direction, follow these guidelines:
Share your thoughts from the point of view of, “I thought this was interesting,” rather than, “YOU will find this interesting.”
Do not tell your spouse or partner he or she needs to use this idea or tool
Only add this section if both spouses agree upfront and on a continuing basis
The danger to sharing practical ideas and tools is that you might sound preachy. Adults do not learn the same way children and teens do. If your partner or spouse thinks the idea might work, he or she will adapt to it. Feeling forced will create resentment and lead to the end of your weekly huddles.
Not sure how to invite your significant other to your first household financial huddle?
Share this link with him or her.