Relationship finances: Savers vs. spenders

Money is often a touchy subject for couples. Differing views on finances can make it hard to establish and stick to a common budget. To maintain a healthy relationship, it's important to find common ground, even if one spouse is a saver while the other is more of a spender. Sound like a tall order? Here are a few personal accounts from couples who've struggled with their shared finances along with words of wisdom from lawyer and mediator Annie Claude De Paoli.

Communication is the key to consensus

Whether you're the thrifty one or the spendthrift, being able to discuss finances openly with your spouse is extremely valuable. It can help you establish a more balanced family budget and maintain harmony in your relationship. Here are reflections from three people who've experienced this firsthand, plus ideas on finding common ground.

My spouse is caught in the credit trap

Danielle and her spouse have a house and a $5,000 joint line of credit. "In my mind, the line of credit is there as a last resort, but he doesn't see it that way," Danielle says. "He maxed it out twice after running out of funds before the end of the month. And yet, we have similar salaries. Money just seems to burn a hole in his pocket." Lawyer and mediator Annie Claude De Paoli believes that lines of credit can be problematic, especially if one spouse is having financial issues. "It's money that's too easily accessible," she says. Instead, she suggests that both spouses contribute to a tax-free savings account (TFSA) to be used for emergencies.

De Paoli's advice for couples who do opt for a joint line of credit is to come to a clear agreement on when it can be used.

"Once you've decided, you have to stick to those terms," she says. "The danger of sharing a line of credit is that if one spouse can't pay back what they owe, the creditor will go after their partner." Danielle and her husband also have a joint mortgage account. De Paoli agrees with this decision, but she also suggests setting aside funds for common expenses. "Then, each spouse can use their remaining cash to cover personal expenses without affecting their partner."

Lastly, Danielle had her husband agree to consolidate their debts, have a single emergency-only credit card, and pay off their line of credit. "Helping him was important to me, and our relationship became stronger as a result," she says. De Paoli recommends putting everything in writing in an agreementAttention, this link will open a new tab. between common-law partners that clearly indicates who pays what. "Once it's signed, both spouses know how things stand. This type of agreement can also be very useful in the event of separation," says De Paoli.

Whereas I prefer to invest, my wife prefers to spend

Sylvain invests his money in the family home and his RRSP, while his wife prefers the immediate satisfaction of spending. "Last summer, for instance, we decided to host a cocktail party in our garden, and she went out and got a new barbecue and stereo," says Sylvain, not without a hint of amusement. The main challenge in this situation is figuring out how to reconcile two completely different approaches to money.

"When both spouses communicate, there's always a way to get on the same page," says De Paoli. "That means listening to your partner, putting yourself in their shoes, weighing the pros and cons, meeting each other halfway, and properly organizing your finances."

As De Paoli recommended in Danielle's case, Sylvain and his wife ultimately agreed to prioritize their common expenses—namely, mortgage payments, groceries, and their child's school fees and RESP. They would each be free to use the leftover funds at their own discretion. According to De Paoli, the couple's RRSPs should also be viewed as a common expense. Since RRSP savings accumulated during a marriage are part of the family patrimonyAttention, this link will open a new tab.Attention, this link will open a new tab., they are normally split equally in the event of divorce. For this reason, De Paoli suggests that couples decide on an annual amount to invest in their RRSPs and then set up pre-authorized withdrawals. "Ideally, they should have a written agreement," she says. "The document might come in handy in the event of divorce should either spouse violate the terms."

My husband believes money is no object when it comes to our child

After the birth of their child, Mylène and her husband were faced with new expenses related to everything from furniture to clothing to day-to-day needs. "My husband wants only the best for our son, and he can spend like crazy," says Mylène. Mylène, on the other hand, prefers the financial and environmental benefits of second-hand products. The pair had to talk things over to reach a consensus, a solution De Paoli applauds. "Before having a child, a couple should look at what their essential expenses are and set a minimum budget to cover those costs. Then they can determine how much each spouse will be responsible for paying—based on their salaries, for example—and put their money into a joint account for child-related expenses," she says.

In the end, Mylène's husband agreed to buy a few used items in excellent condition, and Mylène agreed to buy certain items new for health and safety reasons. "At some point, we'll have to talk about whether we want our child to attend public or private school," she says. "We have to make sure we always communicate so that we make the right decisions while respecting each other's wishes."

"Once the essentials are paid for, there's nothing stopping a parent from spending more in certain areas," says De Paoli. "It's the same principle for separated parents. Child supportAttention, this link will open a new tab.Attention, this link will open a new tab. covers the child's basic needs along with certain expenses, such as private school fees, orthodontist appointments, and so on."

 
Communication in any relationship is key, especially if you're dealing with a spouse's debt or struggling with different financial priorities. Honest discussion will help you to decide on your common expenses and your savings goals. Of course, it's always recommended to have a notary or lawyer put everything in writing. That'll give you all the tools you need to ensure that love trumps money. And who knows, maybe combining your opposing financial views will create more balance in your relationship.