Communicating About Budgets

Reduce Conflict

The number one reason for couples to develop a spending plan — a budget — is
to reduce conflict in their marriage.

"What’s that?" you say. "Budgeting can reduce marital conflict?" I can just
see all you "My-spouse-and-I-can-talk-about-anything-but-money" people
scratching your heads — but hear me out. Budgeting reduces conflict for the
simple reason that it provides built-in accountability and an objective standard
for all of your spending decisions.

You might be surprised at the number of financial transactions you make. If
you add up all the checks you write, all the credit card purchases you make, and
everything you pay cash for, you could easily make 1,500 or 2,000 transactions a
year. With or without a budget, you are going to spend money, whether it’s to
buy groceries, pay the rent, or take a family vacation. If you don’t have a
budget — a spending plan that allocates your income to reflect your priorities —
any of these expenditures could touch off an argument. In fact, if you disagree
on only about one out of every 100 purchases, you will wind up at odds with your
spouse at least once a month. Statistically speaking, money fights or
frustrations are a virtual certainty!

Judy and I use a computer software program to track our purchases. According
to the computer, we make anywhere from 2,000 to 3,000 transactions each year.
But since most of our spending decisions are made ahead of time in our family
budget, there is very little disagreement about where our money should go. As a
result, we have the freedom and flexibility to enjoy our purchases without fear,
guilt, or conflict. Our budget works to eliminate potential problems before they
arise.

Create Focus

The second reason why a spending plan makes sense is that it allows you to
create and maintain a vision for the future. A budget gives you the guidelines
you need to successfully spend less than you earn — which, as any financial
analyst can tell you, is the key to long-term financial security. Whether you
want to buy a home, start your own business, fund your children’s college
education, or set yourself up for a comfortable retirement, a spending plan can
keep you focused on your goals.

Balance Spouses’ Input on Spending

Third, a spending plan means that nobody has to be the bad guy. As I
mentioned earlier, most marriages usually have a spending spouse and a saving
spouse. Any time the spender buys something, he or she becomes a potential
target: Why did you buy that? It costs too much! And we don’t really need
it. Couldn’t you have found something less expensive? Likewise,when the
saver refuses to spend money, he or she may invite criticism: Why can’t we
buy that? It’s not that expensive — and besides, it’s on sale. You worry about
money too much. Don’t be such a killjoy.

A budget can help eliminate such tension. Objective and impartial, the
spending plan draws a line between the affordable and the out-of-reach, the wise
purchase and the foolish. Because a budget is drafted with input from both
spouses, the spending/saving decisions are not "mine" or "yours," but "ours."
You’re on the same side of the fence.

Aid Communication

A fourth reason for a spending plan is that it forces couples to communicate.
You can’t establish budget categories and allocate income without talking about
priorities, needs, dreams, and goals. Fears and insecurities can also be part of
the process. By providing a forum for discussion, the budgeting process enables
you to define and address philosophical differences — everything from how much
to spend on food and clothing to how, where, or when you want to give money to
your children, your church, or your charity.

Set an Example

Finally, by establishing and using a budget you set a great example for your
kids. As Judy and I often remind ourselves, "More is caught than taught." When
your children see you exercising financial discipline and making progress toward
your goals, they will learn a valuable lesson about how to handle their own
money.

Reducing conflict, creating vision, eliminating the bad guy, fostering
communication, and demonstrating wise money management are all good reasons to
develop a spending plan. But I’m not pretending that the process will be easy.
At times it might even be a struggle. It’s like going for a swim in the ocean:
You have to get through a few rough spots before you get past the breakers. But
I can promise you that once you get beyond the turbulence and out to where the
water is gentle and clear, you will never want to go back.