by Eric Tyson
6 Steps to a Successful Money Talk with Your Mate
For Richer, For Poorer
How Financial Planning Can Help a Marriage
The two of you made a decent income last year, but there's little to show for it. If you're the "saver" in the marriage, you're glowering at your new-car-buying, Starbucks-swilling, iTunes-downloading spouse. If you're the "spendthrift," you're deflecting her righteous indignation with a defensive "What? I'm not allowed to have any fun?"
Why not make this the year that you have a frank discussion about the money issues in your marriage? Insufficient funds are often a result of poor communication skills and other personal problems that result in difficulty handling money. If you don't address these issues head-on, you'll never get a handle on your money.
One problem that plagues modern day marriages is a tendency for the two individuals within a married couple to give in to "me" thinking instead of buying into the "we" thinking that should come when you join your life with someone else's.
Money stashing is a perfect example. I've been surprised over the years by how many people have stashes of money hidden from their spouses. Stashing money isn't any healthier than regularly blowing your paycheck and leaving your spouse to pay all the bills. Finding financial stability within a marriage is all about balance. Try these tools that will help solve your money problems now:
- Start talking about money now. Take the risk to discuss your feelings, attitudes, and beliefs about money and be ready to respectfully listen to your partner's approach. Work at understanding your differences and decide on a process for negotiating agreements when conflicts inevitably arise. This will help minimize small problems mushrooming into big ones.
- Understand gender differences as they relate to money. Men and women often deal differently with money. Women are more likely to ask for help and admit gaps in knowledge than are men. Men's egos more often get in the way of seeking assistance and education. Men are much more likely to plow ahead, even when they lack sufficient information and background on a money topic.
- Words matter when broaching money concerns. When concerns are raised, you dramatically increase the likelihood of your partner hearing, listening to, respecting, and positively responding to your point of view if you present it as your feelings on a topic rather than a criticism of the other person's financial habits.
- Respect each other's differences. Finding it in yourself to appreciate the ways your partner's money personality differs from yours is vital. Try to think openly about the situation for a minute. If you're a penny-pincher and you'd married another miser, you'd likely never enjoy the fruits of your hard work!
- Share the money responsibilities. Take advantage of each partner's talents by matching tasks based upon interests and skills. Start by developing a list of responsibilities, such as paying bills, shopping for and managing insurance issues, and handling investments. Decide who will take care of each task, the level of consultation you're both comfortable with for that assignment, and how often the task will be performed.
- Rethink your bank account structure. Separate accounts and finances often lead to friction in marriages, especially if one person cuts back on work outside the home to be with the kids, or if wide pay differences exist between the partners. I've also observed a tendency toward increased secrecy and related problems with separate accounts if spouses keep much of their spending habits private. That said, a combination of joint and separate accounts is a workable compromise for some couples. The key to making this arrangement work is setting a discretionary spending limit. For example, you must consult your spouse on purchases of more than say $50 or $100.
- Educate yourself. The best thing you can do to improve your finances is to educate yourself about personal finance. Sign up for a personal finance course and pick up a few good books. You might also consider seeking financial advice, but be careful who you ask. Some professionals aren't really qualified to give the right advice and others have a self-serving agenda.
Attorneys generally lack the training and related perspective to adequately analyze your entire financial picture. Most financial advisors sell products, not their time and service. Consulting with a good tax advisor is worthwhile in some cases, as there are a number of opportunities for married couples to save, particularly in regard to tax breaks that they may not be aware of.
- Set some financial goals. The best way to save for the future without nickel and diming your way through the present is to work out a budget that you can both agree to. Analyze your past six months' worth of spending. How much of your income are you saving? Not enough? Now go through the various spending categories: dining (meals out), groceries (meals in), entertainment, taxes, car payments, etc. Set targets that cut your spending enough so that your rate of savings increases. That's what budgeting is all about.
There is always some place to cut spending. The most common problem couples run into is that those spouses who have difficulty saving money think of everything in the budget as a necessity. There are places you can cut that shouldn't cause too much pain. And remember that you can always budget in fun things like the occasional weekend getaway so that the spender in the relationship doesn't feel like the budget has zapped the fun out of everything in life.
The biggest lesson to take away from all of this is that marriage and money can and should go together harmoniously. So many couples simply try to ignore their problems or avoid dealing with them when they realize what's up with their newly joined finances. They just need to realize that just a few simple steps can get them on the right path. By taking care of their money problems, they can ensure a happier future together.
Eric Tyson, MBA, has penned five national bestsellers. His Personal Finance For Dummies (Wiley) won the Benjamin Franklin Award for the Best Business Book of the Year. He is also the author of Investing For Dummies, Fifth edition and co-author of Home Buying For Dummies, 4th Edition and Real Estate Investing For Dummies, 2nd Edition, among other titles. His educational background includes a bachelor's degree in economics from Yale and an MBA from the Stanford Graduate School of Business.
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