How To Handle An Overspending Spouse

You’ve been careful about money all your life - you’ve paid off your debt, paid yourself first, and amassed sizable savings while doing it. But your spouse is another story. He or she lives for the moment, thinks nothing of buying a $4 coffee or $10 lunch every day, loves to appear generous by always treating friends and family to dinner, or maybe even has significant credit card debt. What can you do to get your finances in synch?

The bad news is that couples’ money habits tend to polarize after they’ve been together awhile. The spender continues to spend, which makes the saver more intent to save—which makes the spender more frenzied to spend. It’s a vicious cycle. And that old cliché about how financial issues are often the biggest reason couples separate isn’t helping.

The good news is that a spender and a saver can find happiness together—all it takes is a little discipline and compromise on both ends. Following are a few tips for finding equilibrium in a financially-unbalanced relationship.

Be kind. This is the building block of all discussions you have with your spouse about money. Chances are, as the saver, you’re proud of your habits and feel like you’re the one who has it together—and your spouse isn’t. This attitude, however, will only make your spouse defensive and less willing to change. Instead of accusing and issuing ultimatums, make your spouse understand that you love them and are trying to help.

If money is a particularly emotional issue between you, sit down with your spouse and have a general discussion about money. Ask your spouse what money means to them—and how they want to feel about money in the next ten or twenty years. See if you can come to some common ground. Then, once you’ve bypassed the emotional pitfalls, look logically with your spouse at their spending habits, debt, and household expenses. Help your spouse see how much that daily $4 cup of coffee will cost over a year’s time.

Have a joint account for bills, and individual accounts for “whatever.” This is one of the most successful ways to manage finances for spender/saver relationships. Open one account in both names. Add up all your bills for each month, including food, utilities, rent or mortgage, school loans, and credit card bills. Add maybe $100 or so more on top of that for discretionary spending, and then split it in half. That’s the amount each of you will put into the joint account every month, rain or shine. You may want to decide on a split other than 50/50 if one partner has significantly more debt than the other.

The rest of your paycheck can go into your individual accounts, and you can both spend it however you want. So if you want to save it all for a dream vacation, that’s fine. And if your spouse wants to blow it every month, that’s fine too. Because your bills are paid for.

Have a spending limit on that joint account. Naturally, you’ll want to be careful with your shared-expense money. Chances are that both of you will sometimes make purchases for the house out of that account. Pick an amount that neither of you are allowed to go over without talking it over. Make sure you frame it so that you (the saver) have to check with your spouse (the spender) just as often as your spouse has to check with you. Make it about mutual accountability, not about who’s more or less responsible with money.

Get that debt under control. If your spouse has significant debt, he or she may need extra help in getting it paid off. Encourage your spouse to talk to a credit counselor if he or she isn’t willing to sit down with you, add up all the debt, and work out a budget. Under most state laws, your spouse’s debt is your debt, and it could affect your credit.

If the problem is serious—see a lawyer. If your spouse refuses to change—or who doesn’t change despite repeated promises to—you may have a larger problem than you can handle on your own. Spending can be an addiction for some people, and may require counseling. In the meantime, your spouse’s credit is your credit—especially if you live in a community-property state. These include California, New Mexico, Idaho, Arizona, Louisiana, Texas, Wisconsin, and Washington. In these states, couples share all debts accumulated after the marriage. You may need to talk to a lawyer to ensure your credit isn’t damaged.

You can help an overspending spouse to rein in his or her spending habits—but you may need to become a little more flexible about money as well along the way. The most important thing is to build some spending flexibility into the budget you work out with your spouse—that way, they’ll always have some freedom to spend and won’t feel trapped. Communication and patience are key to improving any marriage’s finances.