Power of Advice
Bruce Sellery has some helpful tips on how couples can determine who does what when it comes to money.
What are the most important areas to talk about when it comes to love and money?
“Marriage is not just spiritual communion.
It is also remembering to take out the trash.”
— Joyce Brothers, American psychologist
You’ve got that right, Joyce. Taking out the trash is analogous to paying the credit card and filing the taxes. Marriages can succeed or fail based on the minutia of day-to-day living. You can talk all you want about context, dreams and values. You can talk about how important they are to building financial intimacy—and I do talk a lot about these things—but you also need to sort out who “takes out the trash.”
There are certain duties that must be done in order to keep a handle on your money. Having clarity on who is going to what and when makes life much easier for both of you. Here’s how to start:
Write out the duty list
Most couples have a pretty clear idea of what the duty list includes, whether that’s taking out the trash or PVR’ing The Amazing Race. But there is often less clarity when it comes to managing money. Start by writing down everything that needs to be done. Here are a few examples:
Budgets: Creating and maintaining the budget, if you do one.
Bills: Paying off credit cards, utilities, property taxes, child care, etc.
Savings: Setting up pre-authorized withdrawals. Contributing to your TFSA, RRSP, RESP, and other investment accounts.
Spending: Researching outrageously expensive trips you can’t afford then snapping out of your trance in time to watch The Amazing Race.
Investments: Filing statements, keeping on top of portfolio performance, booking meetings with the financial adviser, then doing the homework assigned.
Taxes: Filing income taxes.
Mortgage: Keeping on top of payments, renewal timing and rates.
Dreams: Acting as project leader to ensure the plan for priority dreams comes together.
Assign who is going to do what and when
While some duties are easy to assign, others are not. To help determine who does what, there are a number of variables to discuss—and gender isn’t one of them. This is 2012 after all.
Likes/dislikes: Do you dislike the duty slightly less than your partner?
Skills: Does the task play to one of your strengths?
Time: No one has enough time. But relatively speaking, who has the time to do this task?
Balance: How do the money duties fit with other duties around the house?
Results: If you’ve already been managing your household budget, how well have you been doing? See this post for an example on when to change duties
Once you have the list of duties written out, add some dates to it so you have a clear set of expectations on timing. By the way, I’m a huge fan of simplicity—you don’t need to make personal finance your new hobby, so keep this simple.
You now have a ‘duty list.’ But remember, this isn’t the Magna Carta. You can renegotiate it down the line to make it work better for you or account for changing circumstances.
Set time to review duty list
At some point you’ll get into a rhythm on this. But until you do, set a time three months down the road to talk about what is working and what isn’t working about the duty list. Are you each doing what you said you would do when you said you would do it? Are there any changes you’d like to make?
Beware the No. 1 Pitfall
The No. 1 pitfall is that neither of you take accountability for important tasks, like retirement savings. Instead you let your excuses about lack of skill, time or interest hold you back. Choose one person to be accountable for the particular duty, and then the other person can make sure it gets done.