‘Till debt do us part

All couples argue about money at some time.  When these arguments are on-going and not resolved, the consequences can be more serious within a relationship.

Throw in there the constant hype about the global economic crisis, the need for Christmas shopping, annual family vacations and tensions soon spiral at this time of the year.

Recently Relationships Australia conducted their 2008 Relationships
Australia Survey and the results reveal the growing impact the financial crisis is having on our relationships.  The most significant results reported were that money stress has more than doubled in two years.

Personally I am over the scare tactics that are prevalent and constant in the media about our current financial doom and gloom.  But when I see this affecting our intimate relationships, I stand up and take note.

In the 2006 Relationships Indicator Survey, “Financial insecurity/difficulties” was identified by 18 percent as an issue that negatively impacted on their relationship. Only two years later that figure has skyrocketed from 18 percent to 40 percent demonstrating the growing financial pressure couples are experiencing within their relationships.

Couples coming together bring with them very different ideas about money.  If you are experiencing problems, it is important that you both understand how the differences in your individual spending and investing affects the relationship.  Our parents in their wisdom instilled in us their beliefs about money and it takes some work to shift from these childhood imprints, which can be at polar opposites to that of your partners.  “Poor people are miserable,” “Rich people cheat on their taxes,” “Money does not buy happiness,” ”You can’t take it to the grave” are all examples of conflicting imprinting.

Spending time talking about money, learning your individual beliefs and understanding how this impacts on spending is the first step towards an equitable resolution according to Jody Fenton, author of the new e-book Marrying Money.  Like most areas in a relationship, the solution comes down to understanding the other person.

“My husband and I have completely different money personalities and it took a few years to work out how to maximise our strengths in this area.   After working with many couples over the past year, I realised that so many couples face similar issues to what my husband and I did and many of the tools I put in place for us have worked well for my clients also.  I realised that not enough information is available to help couples bring about open and honest discussion about how to handle money,” says Jody.

Understanding your unique money personalities is the key to making money work in your relationship.  If you don’t understand how each other relates to money, you won’t understand why you and your partner may be frequently fighting over money.

Let’s look at money personalities and how they differ.

A philanthropist - is a person who is always shouting the coffee or drinks.  They always seem to have something to give someone in need.  This money personality needs to start writing some financial goals and monitor what he/she is spending money on for a few weeks.  This way they can ensure they are spending on what they really want to, rather than it slipping through their fingers by spending on others.

An investor – is the person who always seems to be having a good time and likes to invest in enjoying life.  They return any shout at the bar, always suggesting to go out for expensive dinner and other exciting social events.  This person can be assisted with a spending plan to stick to.  This way they have the freedom to still enjoy life but will leave room for savings and investments too.

A shopper - is the person who is never sure where their money went because they spend without thinking.  Having a separate billing account and direct debiting bills will help this money personality.  Limiting credit card expenditure will assist and not leave them in the red when unexpected bills come in.  Try decreasing your limit to $2 000 on your credit card instead of $10 000.

An accumulator - is someone who doesn’t spend money unless they absolutely have to.  This person needs to have their financial goals but also to include money for fun things in their spending too.  You and your partner should enjoy spending money sensibly.

Jody explains how she put into practice understanding their differing money personalities in her own relationship.

Learning to save together:

“As a philanthropist my husband Dan wasn’t a great saver.  The easiest way for anyone to learn how to save is to find something that they really want and then help them work towards it.   As discussions started about us moving in together, I had to work out a way to find out whether Dan and I would kill each other within the first few months of living together before we made that commitment.  I also needed to work out how I was going to get him to learn how to save as once we had joint bills to pay I knew I was going to worry about what he spent his money on.  As my feet got itchy for the next holiday, I decided a joint holiday was the answer.  I then included him in every part of the holiday planning process so that he knew he was a part of this great holiday as long as he saved the money to get there.”

How much is he/she really spending?

“After a few heated discussions around this topic I decided to show Dan exactly how much money buying coffees and lunches each day was costing - $20 per day.   At almost $5,000 a year it wasn’t a small amount. I then listed all the things we could do with the $5,000, the first being tickets to Europe which is something I knew he really wanted to do.  He finally understood what I had been trying to explain, that the cost of spending this money on lunch each day had nothing to do with the physical money being spent but rather the other things we could be doing with that money.”

Living everyday with a different money personality

“Dan and I sat down one night and decided we would introduce allowances to further assist with our financial goals as a couple.  It was a very interesting conversation and one that took a few goes before we settled on the final outcome. To this day we still have allowances which are now paid weekly not monthly as Dan tended to find that with a monthly allowance he usually had two good weeks and two not so good weeks. Dan’s allowance is slightly larger than mine as I just don’t spend money the same way he does but I’m comfortable with that.  Dan is happy that I visit a beautician, have a more expensive haircut and also buy make up for example.”

Jody says it is very important to realise there is no right or wrong outcome when assessing what type of money personality you or your partner are.  Once you determine your differences you just need to work out easy ways to manage these differences to make the most of your joint finances.

Tips for becoming a money savvy couple:

• As the economy changes and things become uncertain we can start worrying about our money and not discuss this with our partners.  Take the time to sit down and re-evaluate your current position and where you both want to be in the next few years.

• Consider whether your financial goals have changed? They often do and maybe that overseas holiday next year will turn out to be better positioned in 2010 to make sure the cash keeps flowing nicely.

• Are finances a bit tight? Is your partner spending a bit more money than you would like?  You need to talk openly and honestly about why you are spending extra money and how it is making you both feel.

• Spending money on lifestyle items can often be how you feel in control of life so introducing realistic allowances into your finances can help with this. Your allowance is then the money you can spend on yourself indulgently and as long as you stick to the set allowance it will help both of you feel in control.  It will also allow you to feel some financial freedom from your spouse which is important too.

Is this really impacting on you?  How is the current financial situation affecting your relationship?  Do you think that money plays an important role in your relationship?

If you would like to suggest a topic or provide feedback on this blog then I would love to hear from you.   If you would also like to be part of the Brisbane Woman blog and forum, then please email me and receive a weekly reminder.