Fighting About Money: Is Compromise Possible?

Spenders and savers can make their money work for them in a relationship.

Dan and Penny are a real couple I know. They are in their thirties with two young children, a mortgage, student loans, and car payments. One is a spender, and one is saver. The problem is neither can compromise.

Dan thinks his money is his to spend once the bills are paid and he contributes a bit to his 401(k). Penny wants to be financially prepared for every eventuality, squirreling away a medical fund, dental fund, clothing fund, and college fund. Each of them thinks the other is wrong.

Six fights Dan and Penny have about money

My way or the highway: Dan and Penny’s attitudes are sometimes so far apart, they cannot see a middle ground. Next steps: Have them each write down what is most important to the family’s financial health, what is important to each of them as individuals, and the one thing that is not negotiable for them. Their lists will certainly not be the same, but putting their needs on paper can help take the emotional heat out of the discussion. If each person gets one non-negotiable habit, they will both will feel they are getting something out of whatever compromise they reach.
No talking: Dan and Penny do not have a regular conversation about finances. Next steps: Once a week, make a money “date” for give-and-take conversation. Do it when everyone is rested and fed, or you are more likely to fight. Set a time limit, so the conversation doesn’t take over the entire day. And stay positive. A one-sided confrontation won’t help and only sets them back.
Time suck: Dan and Penny have so many different accounts that it is a huge time burden to track them all. Next steps: They can combine some of them (the dental account could include braces; and the school account could include all the kids’ after-school activities) to make managing money easier. Dan and Penny should designate “his and hers” fun money. Each of them gets a certain amount of money per month to spend or stash, no questions asked.
Two names: Penny kept Dan’s name off certain accounts to control the money, but if she were to die, he would have a hard time accessing those funds. Agreeing on how to spend money is a very hard discussion, but it needs to happen. Next steps: Both their names should be on the accounts, and to prevent “frivolous” withdrawals, the bank can require signatures from both of them.
Different priorities: Dan admits Penny is the financial whiz, making most of the decisions, but both are earning and spending. So Dan pretty much lets her handle their finances, and stays out of it, until she gives him difficulty when he wants to buy something. Next steps: Penny needs to find out why Dan is either disinterested or upset. Maybe he’s overwhelmed or not as well educated when it comes to money. Books, financial management software or a chat with a financial planner can bring Dan into the financial family. Or maybe he really doesn’t have an interest in being involved in the day to day money management, which is fine. Ideally, they will agree on how to spend the money, and who will manage it.
Unexpected bonuses: Dan thinks extra money is a bonus to be used for fun things. Penny sees extra money as extra reasons to save. Next steps: Compromise and split the funds: save some and splurge some.

Five things Dan and Penny are doing right.

They are saving: Dan contributes to his work 401(k) and the company does provide a match. Penny likes the “squirreling” approach and stashes money in a lot of accounts that are earmarked for house repairs, kids’ braces, their HSA, holiday gifts and so on. Different strategy, but still a savings strategy.
They are avoiding future debts: Having the earmarked accounts means there is money available for future emergencies. No one can save for every eventuality, but the idea of setting money aside for some future expenditures is a sound idea that prevents financial surprises later.
They have a joint rewards credit card: Using plastic might as well offer a double payback. The spenders and savers benefit: the spender earns cash or points, and the saver comes up with the plan to make the best use of the rewards.
They have joint checking and at least one primary savings account: This plan gives the spender access, but the saver is watching where the money goes. And there is the right of survivorship aspect; if one partner dies, the other can still access the funds.
There’s no “financial infidelity” going on: Dan and Penny won’t agree on everything, but at least their issues about spending and saving are out in the open. They may not like how the other person manages money, but there are no secret bank accounts or credit cards.