Source: www.tess.com, Disney/Pixar
My wife and I were married while we were still in college. We were both 23 years old then. We now have three kids and have been married for 15 years. Not that my wife does not have any flaws, but being married to the one you love who is beautiful, supportive, creative, and has so many good qualities is what made me who I am.
I am a better husband, father, leader, investor, entrepreneur, etc. because of her. I do not think I would be able to do all these things had it not been for her support. Despite our busy schedules, my wife and I frequently talk and discuss life in general, go out on dates, and spend time together. We help each other do laundry or take the kids to the park.
We believe that “no success – fame, power, money — can compensate for the disintegration of the family or failure in the home.” My wife and I promised that we didn’t get married to get divorced.
When we are faced with problems, we work them out, subdue our pride, apologize, and serve each other. It is often when you serve the other person that barriers are broken down and love is restored. Having said this, we view our finances as one, not his, not hers, but ours.
In our view, it is the lack of faith in each other and trust that the “his or her” money happens in the first place.
The Beginning
When we first got married, money was tight. Because of this situation, we decided to create a budget that allowed us to have an open dialogue about what was important for our new family and helped us structure our lives for the better.
The Critical Items
It was obvious that we needed money for daily living. But we also needed to have emergency and savings funds. These two were important as we wanted to make sure that in times of difficulty, we have the money to cover for them. We also wanted to start investing early. The sooner we could invest, the better our lives would be.
Non Critical Items
There were things we thought were relatively not crucial at that time. We decided that discretionary spending like traveling, eating out, watching movies, and others could be deferred. We decided to sacrifice a little until we could really afford these things.
The Interesting Parts
One of the hardest things for me to see was how men and women were so different. Period. I am a guy, and I didn’t have any sisters in my family. I could get by with just two pairs of shoes. I could get by with just using Head & Shoulders shampoo without any conditioner. In fact, back then, I sometimes used soap for shampoo!
I assumed that my wife applied this same dynamics. I was wrong! I asked why she needed to have at least 3 pairs of shoes. I wondered why she needed conditioner and all sorts of beauty products. I didn’t understand it then. I didn’t understand that different dresses require different pairs of shoes. I didn’t understand that facial washes were essential – a mix of want and need. There were so many things I didn’t understand then that I do now.
Better Couple
At any rate, by sharing information, our eyes were opened and it has helped us bridge the gap in our marriage. Consequently, we started viewing our relationship as truly one. We started seeing our finances as one.
Plans in Motion
Obviously, going through the process was not easy. It was harder for my wife. She had to rationalize why she needed to buy (or not buy) certain things. As much as it was hurtful to her, it was also hurtful to me because I love her, and I definitely wanted to get her the things she liked. But, we just knew that we were not in that situation yet.
I promised my wife, however, that as our savings and investments grow, I would get them for her.
We are now able to afford things we like without even sweating the details. But, one thing has changed since then. Before purchasing things, we have already applied our “needs vs. wants” analysis. We do not buy on impulse any longer. We have mastered ourselves. Our characters have changed.
A True Case
When we lived in NYC, one of the first life tragedies we experienced was the death of our first child. She was still born at 8.25 months, full term. We were heart broken, distraught, and discouraged. We weren’t able to avoid this pain.
But one thing we were able to avoid is the financial tragedy that could have happened if we didn’t start saving early. We had to pay for the funeral home and associated expenses that came with our daughter’s passing.
We knew we were not going to be in NYC longer than 5 years so we sent our daughter to Hawaii where she could be buried. I could just imagine if we didn’t have any money then, that would have been a complete tragedy.
Ever since this situation, my wife and I have validated our views on finances. We didn’t have to worry about it when we needed the money.
The Dividend Payoff
Now, that our investments have grown by a large factor, we purchase things and experiences that provide real joy to our lives. When I say real joy is that we buy things that add value to our lives.
We still think about the needs vs. wants because we like to keep this discipline in our family. We want our kids to see that we do it. We want them to learn.
So, here are my suggestions on Family Finances.
- Sit down and discuss. You have to be openly honest about how you feel. It is important to note that both spouses need to have listening ears. Do not interrupt your spouse when they are explaining how they feel.
- Attack the problem. Do not attack the person. There will be items/things/categories where both will feel very strongly about, but there will also be things or areas where both spouses could agree on and work together. These areas should be the categories where they could make adjustments.
- Provide solutions. Agree on what needs to be done to help lower the costs or improve the value derived from the purchase while keeping the same costs. Read this.
- Implement. Start acting on your plans and keep track of them. There is a saying that “A goal not written is only a wish,” so write and keep track of your activities.
- Evaluate. My wife and I kept a detailed spreadsheet for the first 7 years of our marriage. It was tedious at first, but it helped us keep our focus. Believe me, if you don’t do this, you will lose track of your goals.
Other considerations
Given all the divorces that are happening now, it’s hard to get into this agreement to share finances once people get married. But, we believe that it is the lack of trust in the first place that divorces happen. It’s a self-fulfilling prophecy. The real key to happy marriage is establishing that trust. If there is no trust, everything else fails.
I like to use the analogy of a credit card. The reason why we use credit cards is because there is an implicit trust that the credit cards would work. But what if, all of a sudden, that trust is violated? Then, no one will use that card. On a micro level, it impacts the user, but on an aggregate level, it impacts the whole ecosystem. There will be less transactions, slower processing of purchases, and increased regulatory oversight. All these things increase costs (lawyer fees, regulation fees, insurance fees, etc.).
It should go without saying that trust is a key factor to a successful marriage, but it is often the most neglected trait in many marriages.