Financial Matters and Conflict in Marriage – Part 2

February 18, 2000

As members of the human race and of American culture, we stereotypically strain against limits and authority. We don’t tolerate having others tell us how to live and what to do. With the close of the 20^th century, it seems the few legitimate limits of individual freedoms are quickly eroding (burning of the American flag, child pornography on the Internet, and overt sexual indiscretions in the White House). Although unrestrained freedom often hurts us as individuals and as a nation, we demand it nonetheless.

It could be said that as a collective, we often live as if there is no meaningful or absolute moral order. We engage in unwise and unrestrained behavior, while trying to convince ourselves that our reckless ways will be without consequence. Yet, as a part of God’s creation, it is clear that we were not designed for unbounded freedom. We are only truly free when we are honoring God and living under His direction. Unlimited freedom ultimately leads to self-destruction.

It is ironic that although we live in such a materially and financially privileged society, we have developed lifestyles that reveal a hankering for more. Toward this end, many couples and families live beyond their income. They have chosen to live outside of reasonable financial boundaries. Even so, just as there are consequences for unwise and unrestrained moral behavior, there are also consequences for poor financial decisions. In order to make wise, moral choices we must first know who we are and how we best function (physically, relationally, emotionally, and spiritually). In the same way, wise financial decisions begin with a realistic evaluation of our monetary boundaries and limitations. We need to study ourselves and honestly assess our resources. In other words, we must discover who we are financially—as individuals, couples, and families.

SUMMARY OF PART ONE

Part One of this series (Marital Conflict and Finances) focused on the following principles:

Marital problems are often connected with financial problems—marital tension often occurs when there is conflict over money.

• How we spend our money is an indicator of our spiritual and religious beliefs—our wallets and checkbooks speak of the priorities of the heart.
• Contentment is a matter of the heart—not a matter of the balance sheet.
• Essentially, a budget is a short-term tool that you can use to reach long-term goals.
• The notion of “richness” only exists in comparison to something or someone else. Attaining more is like a mirage—one never really arrives.
• Undisciplined use of credit cards creates an illusion of affluence while actually impeding our progress toward financial objectives.

THE BEAUTY OF A BUDGET

It is beautiful when we learn to be thankful and content. Just like you, I can become discouraged and displeased with my station in life. But I can correct my perspective by recognizing and attending to the good that is around me: warm and meaningful relationships with immediate and extended family, interesting and stable work, good health, a caring and sound church family, and life on California’s beautiful central coast. Although not all is right in my life, I can remind myself of what is good and focus on being at peace with what God has provided.

In many ways, a budget can aid us in becoming more content and thankful for God’s provision. Although many people attach negative associations to the notion of a budget, a budget is as simple as a financial plan divided by twelve. A budget merely tells you when you have spent what you agreed to spend, and it serves as a map or guide for spending and saving decisions.

As previously mentioned, couples and families can derive great benefit from collaboratively developing and following a budget. The process requires that we monitor and discipline ourselves—that we employ a level of self-restraint. A budget also forces us to honestly determine how much income we are generating and how much we are spending. There is potential freedom to be found in squarely facing such truth. Once we have faced the truth about our saving and spending, then we can make wise and informed choices. But, without a budget, we never quite know where we are financially. If we resist the notion of a budget or financial plan, we are like those who resist moral truth or the laws of science. Although we may ignore such principles they influence our lives nonetheless. Helpful references concerning budgeting are listed on page four.

THE CONCEPT OF MARGIN

In most areas of life we have lost the sense of margin. With the advent of the fax machine, cell phone, Internet, overnight mail, pagers—there seems to be less flexibility in our lives. We are short on both time and energy. In a similar manner, a lack of financial margin also contributes to marital conflict. Most financial advisors recommend that families have the cash equivalent of three to six months living expenses readily accessible (e.g., money market account). Yet, most couples have not saved toward such a contingency fund. In fact, most couples have not even saved toward predictable expenses (bi-annual automobile insurance, annual life insurance).

In terms of the financial state of a marriage, it is wise to build margin into the plan. Financial margin means not spending all that you earn, and then saving a portion for unexpected expenses. In order to have a household cash flow that allows for margin—you will need to budget what you earn and what you spend. The key benefit for those who saved into a contingency/emergency fund is that they are actively planning for the unexpected. They are choosing to control what they can control and actively avoid (or at least mitigate) financial crises.

THINKING AND TALKING BEFORE BUYING

Empirical research indicates that couples who have a shared financial plan tend to be more content and happy in their marriage than couples who spend as they go. Couples with a shared financial plan also discuss moderate-to-large purchases before spending. Here are some questions you might discuss with your spouse before deciding to buy that next expensive item.

• Is this item a necessity? Do I need it or do I want/desire it?
• Have I found the item at the best possible price, or am I purchasing this item now because I want it now?

• Does the item require upkeep and will it command ongoing expenses?
• Can we purchase and maintain this item and have a clear conscience as stewards of God’s resources?
• If we purchase this item, would we be willing to sell it or give it away if it became a source of conflict between us?

DEVELOPING SHORT-TERM AND LONG-TERM FINANCIAL GOALS

All couples who are able to collaboratively handle their finances without conflict share one characteristic—they have developed and implemented clear financial goals. In terms of their earning and spending, they are on the same page. These short-term (three to twelve months) and long-term (one year through retirement) goals must be built upon a shared perspective and common approach to life. These goals should be reached through patient conversation and thought. Once established, the goals should also be open to revision.

Financial goal setting serves four key purposes. First, the goal provides a clear target and a plan for reaching it. Second, financial goals can help us crystallize our thoughts and efforts. Third, realistic goal setting can provide personal motivation. Fourth, from a Christian perspective, if the goal is prayerfully considered before God, it could represent God’s financial will for you.

These short-term and long-term goals might include attention to the following matters:

• Decreasing or eliminating debt. Enjoy the freedom of living without debt. Foster an attitude of contentment and gratitude.
• Deciding to live on your income stream without the aid of ongoing credit.
• Choosing to live simply. Beyond a minimum level of comfort, money does not (cannot) buy us the happiness we seek. If you live to have it all—what you have is never In an environment of “more is better,” enough is like the horizon—always receding.
• Attend to financial matters so you can focus on the more important things in life: relationships, spiritual matters, health, and adventures.
• Plan for margin in your spending and saving.
• Save toward an emergency/contingency fund.

BARRIERS TO SETTING FINANCIAL GOALS

Many couples do not set realistic financial goals. Consequently, they are not able to work toward shared objectives—because they have not agreed upon the object of their effort. As a wise sage once said, “Plan to get no where and that’s where you’ll end up—-nowhere.” So, I strongly encourage married couples to seriously consider their current financial state and how they would like things to change. Invariably, this involves considering and committing to specific financial and budgeting goals. Yet, many couples resist the notion of collaboratively developing a short (but meaningful) list of financial goals, and then cooperatively working toward those goals. Their resistance to committing to specific financial goals usually falls into one of three categories:

“If we set a goal, and we don’t reach the goal, we’ll just feel worse than we do now.”

This rebuttal assumes that goals are only useful if we fully meet the criteria we have set for ourselves. In the area of family finances there is much to be gained by making movement toward a desired goal—even if the goal is never achieved.

“I know we should talk about and set some financial goals, but it seems like it would take so much time.” The spouse or couple that maintains this position is resisting the process of developing and implementing financial goals because it would be too time consuming. Yet, they do not see that most of their fights and arguments are over money. It is ironic that their reason for not setting financial goals is their lack of time. Although it might take an evening or two, this couple could actually save time and decrease their level of conflict, by coming to terms with some basic financial goals.

“I agree that we should know where we are going—but we are in such a fix and we just don’t know where to start.” It is always a good idea to begin where you are currently stuck. If you’re in a fix—then start with the fix that you’re in. On page four are listed some helpful resources. Read them over, develop some goals, and you will have begun working toward a shared financial plan while also decreasing the frequency and intensity of your financial arguments.

THE IMPORTANCE OF DEVELOPING AN ACCOUNT TO PAY FOR REGULAR (BUT NOT MONTHLY) EXPENSES

As families we all run into regularly occurring bills that do not arrive on a monthly basis. For instance, in our home we receive bills on a quarterly, bi-annual, or annual basis (homeowners insurance, life insurance, automobile insurance, vehicle registration, and fees for the children’s athletic leagues). We all know that these bills are coming—and most of us know the month when they usually arrive. Yet, many couples have not developed a systematic strategy for anticipating and saving toward these bills.

I would recommend that you consider setting up a money market account (with check writing privileges) in which you save for these bills. Determine the likely amount of the anticipated bill and divide by its billing cycle (quarterly=3, bi-annual=6, annual=12). If you save accordingly, you will have the bill paid when it arrives in the mail. Again, this serves the dual purpose of helping you organize your domestic financial life while also decreasing money-related conflict.

THE IMPORTANCE OF AN EMERGENCY FUND

Once you have developed an account for regularly occurring expenses—congratulate yourselves—and then move onto the next assignment. Many couples get along well concerning financial matters, when things are going well. The cars are running fine, the children’s teeth are intact and healthy, and the ol’ house is holding up. But when those unexpected expenses come along and the financial pressures mount—the season of marital bliss quickly evaporates.

Such episodes of financial woe and marital conflict point to the need for an emergency fund. We all know that unanticipated expenses arrive on a fairly regular schedule. Yet, many of us do not save toward unexpected expenditures. I strongly recommend that couples begin saving into an emergency account. This account should not be used to pay for wanted or desired items. Rather, it is devoted to true emergencies (unexpected medical expenses, injury causing loss of wages). These funds should be held in a money market account that is not easily accessible. Each month make a deposit (no matter how small) into the emergency account.

SUMMARY OF THE KEY POINTS

• Budgets can be beautiful. Basically, a budget is a tool that tells us when we have spent what we agreed to spend.
• We need to make a place for financial margin in our lives.
• Marital conflict over finances decreases for couples that have shared short-term and long-term financial goals.
• Develop an account for saving toward consistently occurring large expenses.
• We can decrease our concerns about money and limit conflict over financial matters by decreasing/eliminating debt, living more simply, and saving toward an emergency fund.

SUGGESTED RESOURCES

Mastering Your Money, by Ron Blue (Nelson Books, 1986).

Using Your Money Wisely, by Larry Burkett (Moody Press, 1985).

The Complete Financial Guide for Young Couples, by Larry Burkett (Victor Books, 1989).

The Financial Planning Workbooks (Moody Press, 1990).

Your Finances in Changing Times, by Larry Burkett (Moody Press, 1998).

Getting a Life, by Dominguez and Robin (Penguin Books, 1997).

Your Money or Your Life, by Dominguez and Robin (Penguin Books, 1993).

Sound Mind Investing, by Austin Pryor (Moody Books).

www.keepingupwiththejones.com

www. thefamily.com

www.cfcministry.org