When partners argue about money...what is the best thing to do to deal with it?

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I have a friend who is always arguing with his wife about money. They are both working and earning a living but they seem to be always short of it. They have separate "allocations" of their earnings and where they should spend it, like phone,water,and food expenses. But still most of their arguments seems to end up with threats of divorce. I know its bad when partners argue about money, but what do you think is the best way to deal with it or to solve this arguments.