smart spending

Couples' cash: Money management with your partner

Couple having a disagreement © iStock

How to not fight about money
By Jean Chatzky

Numerous studies show that managing money can be the most divisive issue between couples, whether married or living together. One might be a spender; the other, a saver. Those opposing ideas of money can make finance one of the most difficult and potentially explosive topics for couples to discuss, leading to disharmony over spending.

"Talking about money doesn't come naturally," says Jane Honeck, author of "The Problem With Money? It's Not About the Money!" "Even though most people's parents talked to them about money, few parents teach their children about the beliefs and values of money management."

"When we come together as a couple, we arrive from different money perspectives. … At the end of the day, money communication is difficult and leads to more challenging money issues," Honeck says.

That is particularly true when it comes to how couples deal with arguments over money. Fighting fair is the recipe to coming out of a money argument in 1 piece, yet many people don't do it.

Take this sticky situation as an example: Your other half bought a big-ticket item, such as a large-screen HDTV, at a good price. The problem, though, is that the 2 of you never discussed the purchase. You feel betrayed. And maybe you even feel let down because you had your eye on something else.

How to resolve: The 1st step is to set up a meeting with your partner. When you talk (not scream) about the TV, avoid making accusations. "The most important thing is to stay calm and discuss this like a business decision. Say, 'It's important to me that we make these decisions together,'" says Tina B. Tessina, Ph.D., a licensed psychotherapist and author of "Money, Sex and Kids: Stop Fighting About the Three Things That Can Ruin Your Marriage."

If you're feeling cheated because you think you missed out on the opportunity to spend the money on something you wanted, suggest a new way to make decisions about splurges. "You want to work out a compromise for approaching big purchases," says Rebecca Schreiber, a CFP professional in Silver Spring, Maryland. "Agree to take turns when it comes to things like TVs. But if you go this route, make sure that money is saved up for these purchases and you're not going into debt for them."

Understand each other's ideas about finances

To manage money, couples must understand each other's ideas about finances. While money doesn't buy happiness, there is a strong correlation between happiness and "the degree to which our financial decisions and behavioral choices are in alignment with our deepest values," says Susan Buniva, a therapist in Richmond, Virginia.

"For couples, it is a process of discovery, both individually and collectively, that allows us to live with more synchronicity and happiness," she says.

To see a complete view of the financial world from your partner's viewpoint, ask open-ended questions, says Lynn Ballou, managing partner of Ballou Plum Wealth Advisors LLC in Lafayette, California. She recommends asking questions like:

  • How did your parents handle money? How are your siblings dealing with money and saving?
  • Do friends and family ask you for loans? If so, how do you respond? Do you ask family and friends for money?
  • How did you begin your independent financial life? When did you start paying your own bills? Did you ever run into trouble with debt?
  • How do you define "needs" versus "wants"?
  • Do you use cash, credit cards or checks? How often do you sit down and review your circumstances against the financial vision you have for your life?

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Respect your partner's history and habits

When couples come to Honeck for money coaching, she starts by talking about their personal ideas about money management. She asks them to talk about how money was used in their parents' home and the financial ideas they were taught or observed as children.

But simply talking about each other's history may not be enough. "Ask a lot of questions of each other about why you have the history and habits you have," Ballou says.

If these conversations reveal that you and your partner aren't compatible in dealing with money, consider reaching out to a financial counselor. "Once there is respect, acceptance and the ability to work as a team, then it's a matter of deciding if you are in agreement about where you are going," Ballou says.

Debt counseling may be a good option if you and your significant other continually find yourselves in situations like this: You both have a lot of credit card debt. One of you wants to open a new account and consolidate the amount on 1 card at a lower interest rate. But the other person would rather set up a strict budget and make monthly payments on the cards.

How to resolve: Credit card debt is an emotionally complicated issue because sometimes 1 person uses the credit card more than the other person. But regardless of how the debt occurred, you need to first assess how bad it is.

If your debt is keeping both of you from meeting your monthly financial commitments, then seek help.

Develop a strategy

Once you understand each other's views about money, work with your partner to develop a joint money strategy that incorporates both of your individual ideals, says Roberto Viceconte, partner with Raich Ende Malter & Co. LLP. Even if 1 partner will be responsible for paying bills or keeping up with the budget, both partners need to be involved in strategizing and setting joint goals.

"Coming together and developing common ground and new goals as a couple will help avoid 1 of the major causes of marital conflict," Viceconte says. "The saver realizes you can't save every dollar, while the spender learns you can't spend every dollar."

Schedule money discussions

Set aside a regular time to discuss your finances as a couple. "Discuss progress on long- and short-term financial goals, major purchases and bumps in the road," Viceconte says. "The key is that the time is regularly scheduled and issues are addressed as part of an overall financial discussion."

It's also important to share the work of budgeting, paying bills and handling finances. Otherwise, the person who handles everything could become resentful while the one who doesn't could be left without knowledge of the family's finances or accounts if his or her partner becomes ill, dies or leaves the relationship.

Set attainable goals

Don't just live month to month, making money and paying bills. Make money management interesting by setting financial goals and reaching them together. And the goals should be attainable. "An airplane without a destination is going to run out of fuel and crash. So will a family," Ballou says.


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