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So You Married A Spender

You were willing to overlook the pricey golf clubs. You could even excuse the collection of designer suits that line your spouse’s closet. But when your better half blew last month’s mortgage money on front row-seats to the New York Jets you knew it was time to huddle.

Indeed, while most married couples can name their partner’s favorite novel long before they say “I do,” few have a sense for how well their spouse manages their money until they merge their accounts.

“It’s not that your husband or wife is trying to hide anything from you, but until you’re around that person all the time it’s hard to know what their spending habits are,” says Rita Cheng, a certified financial planner with Ameriprise Financial in Bethesda, Md. “Money is always an emotional and contentious issue because it’s so uncomfortable to talk about.”

Part of the reason finances breed frustration is that we all enter relationships with our own philosophy on saving and spending, shaped for decades by family, friends and peers.

When one spouse was raised by parents that value financial discipline and the other was reared in the “we may not be here tomorrow” camp, it can be hard to find a middle ground.
Yet, there are ways to make your money and your marriage work when you share your savings with a spender.

You Can't Change Them

First and most important, says Kristy Archuleta, assistant professor at the Institute of Personal Financial Planning at Kansas State University, who's also a marriage and family therapist, recognize that you can’t change each other, but you can both take steps to moderate your lifestyle.

After all, it may be your inflexibility that contributes to the problem.

Love and Money -- A CNBC Special Report
Love and Money -- A CNBC Special Report

“Often we adopt these couple relationships where one spouse takes on the role of parent and the other takes the role of child,” says Archuleta. “You have to allow the spender in the relationship, who may feel a loss of control, to come up a little within the hierarchy of the relationship. At the same time, the more conservative one has to drop a little and lose a little bit of control to help balance the relationship.”

It may help to consult a marriage counselor who can redefine the roles within your marriage.

Financial advisors can also help create a saving and spending plan that helps you meet your mutual long-term goals.

“You never want it to become a he-versus-she situation, or vice versa, so if money has become an issue in your relationship many times it makes sense to hire an unbiased third party without an emotional attachment to the issue,” says Cheng. “It keeps it more neutral.”

Divorce Your Money

At the same time, says Steven M. Cohn, a relationship specialist with Portland Couples Counseling Center in Portland, Ore., couples that disagree on their budget should immediately “unfuse” their money.

“Most couples getting together, even modern day couples are trying to use the 1940s or 1950s model of pooling their money,” Cohn said. “They’re operating out of a single bucket of money and they end up in a power struggle.”

His suggestion?

Maintain a joint account for paying all household expenses, including your mortgage, utilities, insurance and groceries, with each spouse depositing a percentage of their paycheck into that pool.

All remaining income should be held in separate accounts, giving both husband and wife their own discretionary fund from which to draw.

Each spouse should also be responsible for their own credit cards, says Cohn.

“I have found for spenders that it’s best to set up their own savings account where they can’t just write a check if they walk into the store and see something they have to have on an impulse,” he says.

Cheng agrees that earmarking separate accounts for fun money is an important part of keeping the peace.

“By having that account and knowing there’s a certain amount of money every month that you can do whatever you want with without having to be accountable, that keeps them engaged in the process,” she says. “If you know you can have a little bit of fun in the short term, that makes saving for future goals that much more palatable.”

Create Transparency

Often, Cohn notes, money trouble stems from the fact that one spouse manages all the bills while the other turns a blind eye.

“The person doing Quicken has their finger on the pulse of their finances, they pays attention to every dime and they know how much is there and how much is being spent,” he says. “The other person isn’t even aware of how close they are cutting things in terms of their spending.”

An easy remedy is to involve your spendthrift spouse in the bill paying process.

“It’s still usually best to have one person doing the journal entries and paying the bills but you need to open up the books together, sit down to discuss your budget regularly and bring some transparency to allow the ‘spender’ to see for themselves that if he or she keeps spending like this you won’t be able to meet your common goals,” says Cohn, who holds a doctorate degree in clinical psychology and a master’s degree in finance.

Those long-term financial goals may include college funds for the kids, retirement savings or a new addition to the house. The important thing is that you set those goals together.

Set Boundaries, Create Structure

Obviously, different rules apply if your spouse is spending your family into the poorhouse.

First off, set some boundaries.

Cheng suggests both parties direct deposit all of their income into a single account, managed by the more disciplined spouse.

The saver should then dole out a monthly allowance for discretionary expenses to the spender, giving them a chance to flex their money management muscles.

It helps, too, for both parties to put credit cards on hold for daily expenses and move to an all cash system, which gives the spender a greater appreciation for how much they’re spending.

“Yes, it may seem like one spouse is giving up control, but if the spender sees that their debt is going down, as is the tension in their relationship, their relationship with the saver will be more harmonious over time,” says Cheng.

You and your spouse should also keep a log of daily expenses (or simply save receipts), fully disclose all expenses to each other and develop a spending plan or budget.

Once the spender learns to live on a budget, the saver can reinstate the “you, me, we” system of having one joint and two separate checking accounts.

“I had a couple that I worked with recently and that system worked great,” says Archuleta.

While your spouse may be your ideal mate in many ways, it doesn’t mean you share their spending philosophy.

By setting mutual goals, sharing responsibility for the household finances, and communicating effectively, however, it doesn’t have to end your happily ever after.

“If you are willing to do the work and do what it’s really going to take to [find that middle ground], which is different for every couple, I think any marriage can be saved,” says Archuleta.