Successfully Managing Money In A Relationship During Tough Times
Conflicts over money are one of the leading
causes of friction and divorce in a marriage. Couples already vulnerable to
money battles are finding themselves fighting even more in the stressful
aftermath of the terrorist attacks and the weakened stock market and economy.
Here are some suggestions for successfully managing money in a relationship
during these tough times.
Create a shared vision for your money.
Start with how the two of you envision your lives together. Do you want to buy a
home, have children, retire at a certain time and place, take expensive
vacations, start a business? Your goals determine how you need to manage your
money, and the more you can clarify and agree on those goals, the more it will
go toward ironing out money management differences. Prioritize your goals and
focus on the most important ones first.
Examine your own money personality.
It’s common for couples to differ in their individual attitudes toward money—one
spouse might be a spender, the other a saver. How do you view and value money: a
means for power, freedom, security, an end in itself? Do you spend money when
you’re depressed, or to celebrate? It’s difficult for couples with dramatically
different attitudes to meld into a shared attitude. But by exploring and
discussing each other’s attitudes toward money, you stand a better chance of
accommodating those differences and reducing conflicts.
Joint and separate checking/savings
accounts. A common suggestion from financial planners
is for couples to have joint checking and savings accounts, but also their own
checking or savings accounts. The couple uses the joint accounts, perhaps funded
in proportion to each person’s income, to pay mutual expenses such as food,
clothing and shelter. The separate accounts—funded realistically so as not to
drain from mutual needs—allow each spouse to spend according to his or her
individual attitudes. A spender could spend away (agreeing not to touch the
joint account), while the saver could sit on his or her money. However, you
should still be financially accountable to each other on a periodic basis.
Manage money together.
Write bills and budget together. Sit down weekly to discuss mutual financial
decisions, and periodically review overall finances. One person may be more
adept at finances and do much of the work, but the other spouse should at least
be involved and understand what is being done. Educating yourselves about
finances will make this easier.
Managing money together not only reduces
conflict, it provides a valuable bonus should the lead money manager become
incapacitated or die. The partner then is more readily able to step in.
Put your financial house in order.
Money conflicts often arise out of anxiety or severe financial
difficulties—unemployment, a declining market, catastrophic medical expenses, a
death in the family. By putting your financial house in order, such as building
a cash emergency fund, diversifying your investments, and being properly
insured, you can reduce or even eliminate the impact of these potential or real
financial problems.
Resolve investment conflicts.
There’s nothing like a declining stock market to exacerbate conflicting
investment styles—the spouse who doesn’t want anything riskier than certificates
of deposit saying “I told you so” to the spouse who invested heavily in tech
stocks. Again, understanding your money personalities and clarifying your
financial goals will help minimize your clashes.
Some financial planners discourage couples
from splitting their portfolio into individual accounts, but sometimes it is the
only practical way when investment styles clash. It may be the best choice in
cases where each person brings sizable investment accounts to a marriage. An
alternative is to have the risk taker establish a small “play money”
account—perhaps no more than five percent of the couple’s portfolio—for those
higher-risk investments.
Seek professional help.
Start with a financial planner who can help clarify your goals, establish an
investment plan, organize your finances and help you examine your money
attitudes. However, your money conflicts may reflect deeper problems with money
(such as gambling) or even issues that may have nothing to do with money. For
these issues, you may need to see a professional therapist.
Whatever the conflicts and their causes,
it’s critical to attempt seriously to resolve them. Otherwise, you may find your
finances in disarray and your marriage in trouble.
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