(This post's topic is focused on finances shared between two people. If you're single, feel free to skip to the next post, or maybe follow along for future reference! Your call

Yesterday we addressed a ton of issues regarding Rule One: Giving Every Dollar a Job. I purposely left one HUGE issue completely out; it deserves a day of its own.

When I was in graduate school I attended a Business Law course. One day in class, I realized that the budgeting that happens between spouses is much like the consensus ad idem (meeting of the minds) we were discussing that very night.

From Wikipedia:

"...a term in contract law used to describe the intentions of the parties forming the contract...where there is a common understanding in the formation of the contract...The reasoning is that a party should not be held to a contract that they were not even aware existed."

For a valid, enforceable contract to exist between two parties there needs to be this "meeting of the minds." This must happen during your monthly Budget Meeting!

The Budget Meeting

The budgeting meeting is a contract between two parties: You and your spouse. As with any contract, there is negotiation before agreement. A healthy negotiation involves honesty, compromise, and respect.

Honesty in negotiation means that if you agree to a spending amount, then intend to fulfill your side of the bargain. Guys: if you agree to spend $50 on tools for February, then you aren't allowed to spend any more than $50 unless you can renegotiate the contract with your spouse (which means taking the money from some other place in the budget).

Honesty also means you're up front with your spouse about concerns. If you're suffocating under the budget, voice that concern!

When your spouse voices those concerns you need the "friendly" side of negotiation. Are you compromising when appropriate? Are you respecting your spouse's needs and wants?

The Budget Meeting should not be 30 minutes of dread (you don't really need more than 30-40 minutes for a month. As you improve, you'll knock it out in ten minutes). The more you budget, the quicker you'll recognize what's required. Each spouse will have more realistic expectations, and be compromising and respectful of the other's.

What if your spouse just isn't the "financial type"? There are a few (million) of those. Some are in denial. Some are really busy. Some are unbelievable earners and don't want to be bothered. Most are just petrified when you say the word "budget."

The word 'budget' tends to conjure fears in spouses. It has a pretty negative connotation attached to it.

You say: "Honey, I'd like to set up a budget with you."

They hear: "Honey, I'd like to control you when it comes to money."

You say: "Honey, we should probably budget for big expenses."

They hear: "You're spending too much money (but I'm not)."

You say: "Honey, let's try and keep to our budget this month."

They hear: "Honey, why don't you try and keep to my budget this month?"
0
That's just the way it goes. If you're having trouble convincing your significant other of the importance of a budget...keep trying! Spell it out in clear and friendly terms. A budget is a set of common goals for the two of you trk toward.

Remember: "a party should not be held to a contract that they were not even aware existed." If you aren't sitting down with your spouse and agreeing together on how much and where to spend, you can't really hold them to that "contract."

If your spouse refuses to sit down with you and manage the money for 30 minutes each month (you even agree to handle entering all of the transactions!), you have a deeper marriage issue than just budgeting. If you've told them it would mean the world to you if they would participate--they'd have to be a backward person to refuse. Tell them I said so!

Hot Chocolate = Success

A successful Budget Meeting should take place whenever new money comes in. Remember, keep it short. Make it fun. Have hot chocolate during the meeting. Go to a movie afterwards (budgeted, of course). Attach something positive to it. Just do it!

When you are successfully budgeting ("success" in budgeting does not mean you never overspend) with your spouse each month, you will notice some very positive changes in your money and your relationship. Your finances will improve. Within your relationship you'll feel more teamwork, respect, and camaraderie. Your communication skills will skyrocket.

The Budget Meeting is the most powerful tool in solving money problems in a marriage, or improving the money situation in your marriage.

Have your spouse read this post's material. Talk it over with them. Spread the love!

Next post we're going to get into Purchasing Power, and the Second Rule of Cash Flow.

Action Steps:

Hold a budget meeting with your spouse. Talk about long- and short-term goals. If necessary, hold hands during the process.