"How to fight fair about money. (money disputes between couples)"
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by: Janet Bodnar
Kiplinger's Personal Finance Magazine
COPYRIGHT 1991 The Kiplinger Washington Editors Inc.
Show me a couple who don't fight about money, goes the old oneliner, and I'll show you a couple on the way to their wedding. "People who are really alike generally don't get married," observes Bert Whitehead, president of Cambridge Associates, financial planners near Detroit. "Shopaholics never marry other shopaholics; they marry misers." Money disputes are a leading cause of divorce in t
he U.S. But blowups over cash don't have to tear your marriage apart if you
understand the problems and know how to patch things up.
It helps to realize, for example, that men and women have different money-management styles. Women are more likely to believe that getting rich is not a realistic investment goal, to consider investing in stocks too big a gamble and to seek help with their finances, according to a research study at the University of Maryland. Men, on the other hand, are more likely to read financial journals, to believe they have adequate financial resources and to prefer selecting their own investments, the study found. Gender difference isn't the only thing that causes you and your spouse to disagree. Ken Doyle, a financial psychologist at the University of Minnesota, says fights about finances mirror clashes among the four classic personality types: the analytic person, for whom money means control; the expressive person, for whom money means esteem; the driven person, for whom money means competence; and the amiable person, for whom money means affection. Put together, say, an analytic individual and someone who's expressive and watch the sparks fly.
"It's the case of an accountant married to an entertainer," says Doyle. "The accountant says, 'Don't you have any concept of earning and saving?' and the entertainer says, 'Loosen up, you're making me crazy.'" The key to fighting fair about money is to know what makes your spouse crazy and to resolve to, if not completely change your ways, at least meet your partner halfway. The following flash points are guaranteed to produce financial fireworks. He: "You're always spending money we don't have." She: "You're so tightfisted we never have any fun." When you want to save more money but your spouse spends it, try shock therapy. "Tell the spouse who's overspending, |Here's our income, here are our expenses. You do the budget,'" says Margi Wertheimer, who with her husband, Don, heads Shasta Financial Planning Consultants, in Mount Shasta, Cal. "It's a very sobering experience." Of course, the spendthrift isn't always at fault. Sometimes the sober half of the duo is simply afraid to part with money. When that's the case, it might help to lay out your financial goals--retirement, children's education, a major vacation--to see whether you're on track toward achieving them. Once you see where you stand in dollars and cents, one spouse may be convinced that you need to spend less or the other might feel more comfortable about spending more. Olivia Mellan, a Washington, D.C., psychotherapist who specializes in money conflicts, thinks role reversal can help. She recommends an exercise in which the spender refrains from making one spur-of-the-moment purchase each week for a month while the saver makes an impulsive purchase every week. Then they compare notes and give themselves a reward (presumably one that doesn't cost too much). She: "Our money's just sitting in the bank. We need to invest it." He: "Yeah? You want to end up like Charlie, who lost his shirt in the market?"
The ticklish problem of different tolerances for risk can be easily resolved if you both realize the situation doesn't have to be all-or-nothing. If one of you must take risks, do so with 10% of your portfolio instead of with the whole nut. If you're reluctant to move beyond the safety of a bank, take one step at a time by investing in a relatively safe utility stock or blue-chip company instead of an aggressive-growth mutual fund. If you each have your own IRA or 401(k) plan, each of you can decide how to invest the money. In plotting their investment strategy, Diana and Ted Wentworth, of Newport Beach, Cal., play to their strengths. "My husband is brilliant at making money with real estate," says Diana, 50. "But he's guaranteed to lose money if he puts it into stocks or bonds." Diana, on the other hand, is a "genetic investor," says Ted, 52. "It's in her blood." So he buys ranchland and she runs their financial investments; right now she's in high-yield bonds. If you can't reach such an amicable agreement, you might seek help from a neutral third party, such as a financial planner , who might recommend investments and act as a buffer to absorb some of the worry (and the blame). He: "You can't lord it over me just because you make more than I do." OR She: "Just because you make the money doesn't mean you can treat me like a child." When one spouse brings in the money, it pushes the power button in a marriage. Some studies show that among couples in which the wife earns more, the divorce rate is higher than average. To bridge such an income gap, the wife might use part of her greater salary for something that would benefit both spouses, such as a vacation or retirement savings, recommends Victoria Felton-Collins, author of Couples & Money (Bantam; $17.95).
When the husband is the only breadwinner, a woman can exert more control by paying the bills and taking on other financial responsibilities. Power struggles in a marriage can take unexpected twists. Michele Weiner-Davis, a marriage and family therapist in Woodstock, Ill., tells of a woman who resented being the steady breadwinner while her husband held a succession of jobs that paid by commission. When the husband took yet another sales position, Weiner-Davis asked the wife what her spouse could do to persuade her that it wasn't just another pie-in-the-sky venture. "She said she'd be satisfied if he made one sale a week," says Weiner-Davis. He agreed to that goal and ended up exceeding it, which allowed his wife to cut back on her hours. He: "How can I balance the checkbook when you can't even hold on to an ATM receipt?" She: "I've got more important things to think about." Try rehabilitation. Get the disorganized spouse to at least toss receipts into a shoebox. Assign specific tasks--who's going to balance the checkbook, who's going to monitor credit card charges so you don't use up your credit line.
Set aside one day a month to talk about family finances. Then switch bill-paying responsibilities every six months. If none of that works, one spouse will just have to do everything. John Manfredonia, 44, a family physician in Tucson who describes himself as "real structured," tracks his family's finances on a home computer and has offered the bill-paying role to his wife, Beverly, "so she can get a perspective." "I'm not interested," replies Beverly, 39, who works as a nurse in her husband's office. "I bought the computer and at tax time it's good, but I don't really care what we've spent on baby-sitting year-to-date." Financial planner Whitehead tells of a scrupulous husband and a disorganized wife who ended their squabbling when she hired her spouse to be her bookkeeper. Now that they've entered into a business arrangement, she takes their finances more seriously, and he's less resentful. She: "How dare you go out and buy a car without consulting me?" He: "But you don't know anything about cars." When one spouse decides to make a major purchase without consulting the other, that's another power play. But it's sure to backfire, warns Felton-Collins. "The spouse who feels put down will get even--by running up charges on the credit card, for example," she says. Better to do you shopping together or at least to follow the example of Skip and Susannah Griffin, of Houston. Skip, 49, an executive recruiter for the legal profession, likes to shop around and thinks nothing of spending a couple of months scouting out new cars. Susannah, 37, vice-president for public affairs at Texas Children's Hospital, prefers to make decisions right away. Their solution, says Skip: "I don't take her with me until I've narrowed it down to a couple of cars. Then we make the decision together."
Other strategies: Agree that neither of you will make a purchase above a certain amount--say $500--without consulting the other. Or set a time at which you'll make a final decision. That lets the shopping spouse know how long he or she has to do research and reins in an impulsive buyer. He: "It's not right for a family to have separate accounts." She: "I don't want to ask permission to buy a pair of shoes. I want my own account." Joint account or separate accounts? "I'm strongly convinced there's no single answer on this one," says Jean Lown, of Utah State University, who has studied how families handle their finances. Even when they have been burned in previous marriages, couples tend to pool their funds, says Lown. Manfredonia, the Tucson physician, reflects the prevailing attitude: "Beverly and I are committed to each other, and that has to be reflected in the entire way we live." Joint accounts can be practical as well as symbolic; they generally make it easier to keep track of household expenses. But if one spouse feels strongly in favor of separate accounts, don't fight it. One compromise is to keep a joint account for ongoing expenses and smaller individual accounts for discretionary purposes.
"My wife, Kathie, and I tried to work out of one checking account, but after three months we split it up," says Ward Wessels, 39, an aerospace engineer in Logan, Utah. "Now I handle the monthly bills and she runs the household account, which includes a slush fund that she can spend as she wishes." Owning some assets separately as you accumulate property during your marriage can also make sense for estate planning. She: "I want you to sign a prenuptial agreement." He: "You don't trust me." "Prenuptial agreements are helpful when you're talking about specific issues, such as a family business," says Adriane Berg, a lawyer and author of How to Stop Fighting About Money & Make Some (Avon; $4.50). "Otherwise, they have a chilling effect." When Diana and Ted Wentworth, the Newport Beach couple, got married, each had been widowed and each was running a successful business. Yet even Ted, a lawyer, shied away from a prenuptial agreement. "I was so positive about her, it just didn't feel right," he says. Ted's income is paying for redecorating the couple's home; Diana's savings are the basis of their joint investment account. But in a second marriage, spouses may not always be so willing to pool their resources, at least not right away. If that's a sticking point, Whitehead suggests starting with separate assets but contributing to a new, joint savings pool. "Over the years, the third pot will become the bulk of the property and the problem will disappear," says Whitehead. He: "Your kids are a bunch of freeloaders." She: "They're my kids, and I'll lend them money if I want." Shakespeare's exhortation, "Neither a borrower nor a lender be," was never more appropriate than when it comes to lending money to your children. "All I hear are horror stories about people who lent or gave money to their kids," says Michael Kabarec, who with his wife, Karen, runs Kabarec Financial Advisors, in Palatine, Ill. "If it's a loan, Mom and Dad are the last to be paid back. If it's a gift, it's never enough." If you still want to help the kids, spend only what you can afford and make it a gift. That way you won't suffer financially and emotionally when you don't get it back.
Giving money to kids of all ages can be a particularly touchy subject when one spouse has children from a previous marriage. Court-ordered child support is one thing, but what often rankles the new spouse are unanticipated financial demands. "The noncustodial parent will spend a fair amount when the kids come to visit," says Lown. One solution is to set aside a certain amount for extra child-related expenses. But money may not always be the answer. The new spouse may simply want reassurance that he or she is top priority. "The best thing you might do is give extra love and attention," says Felton-Collins. Some problems of blended families have cut-and-dried legal solutions. There is, for example, the ticklish question of who inherits an estate--the current spouse or the children from a prior marriage. A so-called QTIP (qualified terminable interest property) trust can solve it. Such a trust gives the surviving spouse income for life and possibly some principal, but at the second spouse's death the bulk of the estate passes to the children. Another strategy: Bequeath your estate to your new spouse and provide for children by making them tax-free gifts of money with which to buy additional insurance on your life. She: "I'm sick of watching the budget. You do it." He: "No way. You're stuck with it." People tend to budget in one of two ways, says Katherine Sandberg Triolo, who with her husband, Frank, runs the Financial Management Team, in Appleton, Wis. Either they pay all the bills first and see what they have left to spend or save, or they try to budget for everything. Each system is likely to fail--the first because there's never any money left over and the second because there's not enough to go around.
The trick, says Triolo, is to combine the two methods. Instead of leaving things to chance, set goals. But be realistic and set priorities, too. If you're going to budget $2,000 for a trip to Disney World, you might have to put the new living-room furniture on hold. Just hearing the word budget may set your teeth on edge, but budgeting needn't be a painful process. "Guess at how much you spend a year and compare it with your savings," advises Sharon Rich , a financial planner in Belmont, Mass. "If you're meeting your savings goal, forget the rest. If you're not, you only have to keep track of those spending areas you want to change." She: "What are you doing buying another jacket?" He: "Well, what about that new tennis racquet of yours?" Even when there's enough money to go around, couples argue about how it's spent. "People tend to keep mental ledger books," says Weiner-Davis, the Woodstock, Ill., therapist. "They resent it when the other spouse spends money on what he or she likes." Weiner-Davis's advice: Give the other spouse permission to be nice to himself or herself. She tells of one couple who clashed when the husband wanted to save money to start a new business and the wife wanted to redecorate the house. They compromised by agreeing to set aside money for the business and to redecorate one room at a time. Don't try to win your spouse over to your own tastes. Washington psychotherapist Mellan uses the example of the man who wanted to surprise his wife with a copy of "their" song as an anniversary gift and spent days searching through record shops--only to face a disappointed wife who wished that he had spent money on a more expensive gift instead. The moral: Know thy spouse.