When asked what many couples fight about, money is usually high on the list. Some even say that money is the number one cause of divorce. However, it is usually the issues around money that cause the problems, such as:
• Power & Control – One spouse controls most of the money decisions due to having a financial background or due to bring home most of the income
• Resentments – If one spouse blames the other for their financial condition, the other spouse will find a way to resist changing (rebel)
• Stress – When living paycheck to paycheck, the added strain may have an influence; however, stress is not caused by money rather our reaction to money
• Accountability – When one spouse hides purchases from the other or is not keeping track to a budget, this will create resentments down the road
• Emotions – Money is energy and anger, shame, guilt, fear and other emotions come up in discussions around money (for more see (for more see “Energy of Money” )
I have noticed when people on financial message boards talk about their problems it is usually one spouse is a big saver (wanting to get out of debt) while the other spouse is a big spender (got them into debt). When others hear this, the response is usually the financial pain is not worth it so it is best to get a divorce. For me, money is unjustly maligned. It is up to everyone to determine what their breaking point is for a marriage is. However, if money is listed as the cause of the divorce, my question is was there an attempt to isolate one of the above issues with money to work on it because even having more money will not solve the problem. For example, you may be stressing about money. Yet, even if you have more money, you will find something else to stress about (like keeping your job). Some people like stress due to the adrenaline rush. So if money becomes a non-stress item, they will find another issue to be stressed about.
So what can we do? For me a healthy marriage around money will entail:
• Joint Responsibility – Each spouse should have an understanding of their finances to carry on a divorce or premature death of the other spouse. In addition, (financial) goals are easier to reach when both spouses are working together towards the goal jointly rather than one being told what to do.
• Acknowledgement of Different Styles – There are many financial styles (e.g., spender/saver, frugal/spend thrift, detail oriented/big picture, worrier/carefree, risk taker/risk adverse, etc.). When we try to make the other person more like us, the other person will rebel. For example, if a spender marries a saver, the spender may have more spending sprees if he/she feels confined by the saver while the saver may try to save more to make up for the other’s spending spree. Yet, by acknowledging what the other person wants, you can agree on some middle ground (set up a budget for the spender while putting aside some savings).
• Goal Setting – When discussions are about specific budget items, there will be disagreements. Yet, when there are common goals (e.g. retire at age 65), the disagreements can be settled by looking at win/win to achieve the joint goals. For example, if one spouse wants a vacation to Hawaii while the joint goal is to retire at age 65, the couple can discuss if they take the vacation to Hawaii how can they offset the cost to continue towards their savings plan to be able to retire at 65. Yet, if the discussion is about how one spouse wants to go to Hawaii and the counter is the other spouse wants to save, there is less likelihood of reaching a compromise because each has their own goal instead of a joint goal. And, joint goals are easier to agree to in comparison to individual budget items.
• See Money as Manifestation of Other Issues – What is usually overlooked is that money is a day to day issue for most families. Thus, arguments around money can bring up other emotions from different issues. If one spouse is angry at the other for coming home late, then during a money conversation that anger will come up. Thus, it is important to identify your emotions in conversations around money and see if it is being triggered from an earlier event (unrelated to money).
• Team Work – As you can see from above, money is an area where joint agreement is needed. You can set up different checking accounts, different mad money funds (money that each spouse doesn’t need to account for), etc.. Yet, at the end of the day, each spouse needs to work towards their joint goals. Yet, team work isn’t my way or the highway. I have seen many arguments on how a spouse will say “we both want to reduce our debt, yet he will not give up buying his toys” and thus the other spouse gives up. Yet, they have not sat down to discuss how long they want their debt plan to be (how much to eliminate over how many years) and what the other spouse is willing to do (or give up) to have his new “toy”.
For me, I believe that recognizing each other’s styles is the most overlooked aspect of financial planning. For example, my wife can find an article saying many financial advisors suggest that they key to a budget is keeping track of each purchase and writing it down. This would work great for her because she is detailed oriented. Yet, it would not work for me because I am big picture oriented and dislike details. I can track my budget relatively closely because I am aware of what I am spending. I track my budget at the end of each month by seeing how much I saved. Let us assume that my target is to have $1,000 revenue and $850 expenses meaning that I target to save $150 each month, then if I saved $150 and know my expenses where close in each category (may be off $10 or $20 here or there), then that is good enough for me (I do not need to track each catagory to the dollar). So how do we work together when we have different styles? Compromise, such as
• Delegate certain budget items to each – so each spouse can track their portion based on their style
• Set up boxes for receipts – Even though one spouse does not want to track their spending in detail, they could save their receipts and put them into a box for the detailed oriented spouse to track it there way (this way both parties get what they want)
• Limit the number of months to track spending in detail – If one spouse wants to verify the budget is relatively close for each items (e.g., eating out, heating, electricity, phone, etc.), they can agree to track all the spending for 3 months to assure themselves of this.
Notice, each suggestion is more of a compromise. They key is not to have one spouse totally give in to what the other spouse because if they do they will resent it and find some way to rebel (e.g., blow the budget). Yet, it is also not o.k. for one spouse to agree to save $100 a month and then to totally blow off the budget because they are not detailed oriented.