I have a passion for personal finance. I like to peruse personal finance blogs and have a keen interest in bettering my personal financial well-being. It is this passion which has led me to start this personal finance blog.
I occasionally visit the personal finance section of Reddit. I came across a question posted by a Reddit member while sitting in a tea shop surfing the site on my laptop.
The person, a late 20s female, posed this question to the Reddit community: “Should I be concerned with my husband wanting to see my personal finances?” The post with that question ended up with over 300 comments. It really struck a cord with the user base of Reddit.
When I first came across that question, I have to admit I was a bit surprised and taken a back. Why shouldn’t the husband and wife share their finances with each other?
I believe greatly in the sanctity of marriage. Once you say “I do”, that means you are together for life. If you are life partners, why not build a life together. It is hard to do if you are keeping secrets from one another.
Despite keeping our finances separate with the occasionally commingling of assets such as our primary home, my wife and I share our finances with each other. That is the only way, in my opinion, that we can build our financial well-being together.
There are a number of reasons why you should share your personal finance with your significant other and a number of reasons why you shouldn’t. I think the benefits outweigh the cons when assessing if it is a wise choice or not to be so open.
Benefits With Sharing
Build A Stronger Relationship By Sharing
Money is the number one issue couples fight about. It is also a topic many couples avoid discussing.
There is a reason why this 20 something year old asked the question. It is also the second leading cause of divorce in America.
If you share your finances with your spouse and work together on building your personal financial roadmap, this should lead to being on the same page. It should result in fewer fights over money and an overall stronger and happier relationship.
Can Obtain An Understanding Of The Household Budget In Totality
I like to view running the household budget similar to how I would run a small business. At the minimum, you want to ensure you can keep the lights on. Obviously, the more money you can generate and pocket at the end of the day the better it is.
Imagine running a business such as a standalone Dunkin Donut store.
How well do you think the owner of the Dunkin Donut shop will do if he doesn’t have a clue how much it costs to buy flours, pay rent, pay his employees and how much to maintain his coffee machines?
Also, what if the owner also has no clues how much money he makes from selling a donut, if donuts are even profitable or if he makes his money predominantly from selling coffees in the morning.
If the owner doesn’t have an understanding of all the numbers of the business (revenue, expenses, profit centers), he will find it hard for his Dunkin Donut shop to remain in business.
Now I think the same goes for your household budget, income and expenses. If you don’t have a full picture of your total income which includes how much you and your spouse make from your work, investment income, and other income stream, how can you figure out what lifestyle you two can have together?
Also, if you don’t understand fully where the money is going after each paycheck because you keep your spending from your spouse, and your spouse does the same to you, then how can you figure out where to cut cost if you want to save money?
You absolutely need transparency into your better half’s personal finance. In turn, your better behalf needs transparency into your personal finance situation in order to keep the household running and, to hopefully, be able to save and build a strong, sound financial roadmap together.
Enable Building A Financial Roadmap Together
There might be different phases in your life together. Those different phases might have different financial needs and parameters around them.
Without knowing each other’s personal financial situation, how can you ever effectively plan to tackle the financial aspects of those different phases? By sharing your financial information, it is a lot easier to build the financial roadmap of your life together.
Buying a house is a big financial commitment for many couples. That might be the single biggest purchase in their life together.
In order to avoid paying PMI (private mortgage insurance), 20% of the house purchase price is needed as a down payment. When you throw in closing costs, moving costs and home renovation or touch up costs, the cash need can increase by a few more percentage points of the purchase price.
It is easier to save for that targeted down payment together, as opposed to tackling it individually. That way, there can be accountability.
The same can be said when planning for retirement savings or saving enough money to help with your kids’ tuition payments. It is better to build the financial roadmap together; and in order to do that, financial disclosure of your situation is necessary to your spouse.
Help In Case Of An Emergency
By providing your spouse with your personal financial information, in the unfortunate event of a person being incapacitated or worse, your significant other can gather and continue to manage your financial assets. Your spouse can also continue to help support some of your responsibilities including paying for your elderly parents’ expenses.
Don’t keep your spouse in the dark about your personal financial situation. Otherwise, it will be a challenge for your spouse to help out in the case of an emergency.
Detriments With Sharing
The following are some of the negatives with sharing your personal financial information with your spouse. Now all those negatives are items which I view as reasons why you shouldn’t have married the person in the first place.
Therefore, assuming you are in a loving and caring relationship with your spouse, then the negatives below should not be a concern for you.
Don’t Want To Be Judged
Last year, Ramsey Solutions conducted a survey. The survey shows that 86% of the couples who got married within the last past 5 years started out in debt.
Maybe you overspent in your youth and purchased that car you shouldn’t have. Maybe you graduated college with $100,000 in student debt and struggled to find a job. Maybe you thought the 2018 NY Giants had a good chance of winning the Super Bowl and bet your whole life’s savings for them to win it all at the beginning of the season.
Those things happen. You might look back at your prior financial decisions in disgust. You already feel bad for them. Now you don’t want your spouse to know about them because you don’t want to be judged all over again for those past mistakes.
Don’t Want To Be Told What To Do
You earned your own money. You spend, save and invest it a certain way which matches your personality and value.
It is hard to be very open to your spouse about your budget, spending habits and investment profile.
At the end of the day, you’ve worked for all those, why let someone else tell you want to do? You don’t want your spouse to tell you that you can’t purchase that watch you’ve been saving up for, lecture you on your savings rate or push you to invest your savings in riskier assets.
You are the master of your finances and just don’t want to be told what to do.
Don’t Want To Be Convinced To Transfer Or Share Assets
You might have assets you don’t want your spouse to know about because you don’t want to get pressured into having to share the asset with your spouse.
Your spouse might push you to share your savings or push you to add his name to the property you worked hard to purchase while single.
You’ve made sacrifices or worked really hard to get to where you are financially. Why should he be able to get half of that if he didn’t put in any effort to help buy or pay for it?
Steal From You
If your spouse has too much financial information about you, you might be concerned the spouse might look to steal from you.
If you have been socking away your cash in the sock drawer after each salary payment day, you most certainly don’t want anyone to know about that. That is your savings. Your spouse might feel entitled to that money and might take if from you without your permission and spend it without your consent.
Personal Financial Questions To Tackle Together
Now that the pros and cons are listed above, I hope you come to the same realization as me that sharing your personal financial information with each other is the better answer. I’ve included a number of questions to tackle before marriage and on at least an annual basis below.
Questions To Answer Prior To Marriage
If you believe the person you are dating is the one, then before you say I do, have a number of big discussions with that person including where to live after marriage, how many kids you two want, and of course, your finances.
Don’t delay on those discussions. They are important to make sure you two are on the same page before getting married.
Having a better understanding of each other’s though process on those big life items should strengthen your bond and also provide a direction together. Those discussions also mitigate the level of surprises when it comes time to actually perform. The lower the level of negative surprise should equal a more harmonious marriage.
When first discussing financial aspects, address the following questions:
(1) How much income do you make?
(2) What are the assets you have?
(3) How much debt do you have?
(4) How much have you saved for retirement?
(5) Where do you spend your money? Do you have a budget?
(6) Any big up-coming expenses?
(7) How many kids do you want? What are your thoughts about covering higher education expenses for the kids?
(8) Where do you want to live? What do you envision our first place together to look like? What are your thoughts about renting versus buying?
(9) Do you plan to continue to work after marriage? How about after kids?
(10) Are there other people you are currently taking care of financially?
It’s good to get those questions out of the way. Obviously, different people have different situations and circumstances. But the questions above should serve as a good starting point for your financial discussion.
Annual Update Check
Even after the initial discussion about your personal financial situation, don’t leave it at that.
Similar to your semi-annual dental visit in order to maintain your healthy teeth and gums you want to perform a financial checkup. Continue to have, at least once a year, an update discussion about where you two stand on your finances.
Those questions should include:
(1) Did your income level changed from last year?
(2) How do your assets and debt look now?
(3) How much did you save for retirement?
(4) How did we do when reviewing our budget to actual from last year on spending?
(5) Are there any big up-coming expenses you foresee?
The other big questions you can discuss as well regarding housing and kids. But if you are not planning on purchasing a new place or having kids soon, then you can have a very quick update to see if there are any significant changes in though around those topics. But I don’t believe a full on conversation is necessary annually, especially if you are a few years away from those big events.
Conclusion
I believe the benefits of disclosing your financial situation to your significant other far outweigh the negatives or concerns. If you are looking to build a life together, go build the life together and that means open communication and shared goals. The goals between two people cannot be aligned without having the necessary dialogue. Use the personal finance questions checklist above to help guide your personal finance discussions.
To the audience: Do you agree with the conclusion that the benefits outweigh the negatives on disclosing your personal finance information to your spouse? Are there other questions you believe are important for discussion between spouses or two people in a relationship? Do you disclose your finances to your spouse and the reasons for your decision?
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In general, I don’t believe in keeping money/financial separate at all. When you get married, it’s joint everything. The only minor exception I would leave open is if one spouse has a well established career and money/assets, and the other spouse is quite a bit younger. Let’s say, for example, a 28-30 year old man, is married to a 20-22 year old woman. The younger of the two may not have much experience with money. The 30 year old might make 100K/year and the 22 year old looks at that as “millions” and doesn’t know how to even manage 8-10K/month. That, I would keep separate until the other matured a bit and had a better understanding of money.
I wonder if the younger doesn’t have maturity to handle money, will the younger also have the maturity to understand why she was locked out of having access to the money? It’s probably a hard balance to strike in protecting assets until the younger one is able to mature enough to handle a large sum.
I am almost 10 years younger than my spouse and keep my finances to myself. We each pay our own expenses (although I suspect he is behind on many of his –phone calls, etc.). I used to spot him money when “emergencies” came up until I realized he always thought I had plenty of money to spare. Although he says he appreciates how hard I work, he has elected not to save anything for retirement, and can’t afford routine maintenance on the house. He’s announced to our children that he intends to spend his stimulus check on a larger TV and move the one in the living room into his office so they can hook it up to the computer. The idea of sharing my financial assets with him makes my soul scream! If I don’t responsibly stash away all I can, where will we be when emergency strikes or continuing to work is no longer an option.
I think timing is everything here.
Did you have any discussions with your spouse early on in the relationship about financial goals and savings? Did you have continuous discussions to check in on your progress against those financial goals?
Given your current situation, it might be better to keep your finances to yourself at this point. The more he sees how much you have, the more he might be tempted to use that fund for himself.