Fighting about money is one of the most common reasons for divorce in North America. Many couples face an overwhelming task when creating and managing the household income. These couples find themselves frustrated when it comes to combining their financial styles, and, as a result, both their net worth, and relationship suffers.
So how do you prevent money stress from eroding your relationship? Here are five common situations that we see in our Financial Planning practice, and some suggestions for overcoming the difficulties.
“We don’t discuss money, we fight about it”.
To prevent a money discussion from turning into an argument, make it a planned discussion. Most couples bring up the subject of money when they are unhappy about something and so the conversation turns into an “I’m right, you’re wrong” debate. For example, spouse buys an expensive item (flat screen tv, fancy new clothes etc.) while the other spouse feels the funds should be going towards the mortgage. What starts as a discussion turns into an argument about which use of funds is “better”. That’s a no win debate.
I recommend that couples meet regularly to discuss finances when they are calm, not at a time of crisis. A quarterly meeting on the weekend, or in the evening over a glass of wine works best. The fewer the distractions the better.
“We’ll never retire at the rate we’re going”
Uncertainty about the future can be very stressful for some people. To alleviate the anxiety, find out where you stand and assess your financial reality. Prepare a net worth statement and prepare a cash flow review. There are many retirement calculators on the internet that will give you some idea as to how close your retirement goal is. Email me at [email protected] for a monthly Budget Tracker that will help you calculate your current cost of living and start the dialogue.
“I’m a saver and he/she is a spender, that’s the problem”
The problem is actually thinking that you can turn a spender into a saver or vice versa. Compromise and moderated behavior is the key. Rather than labeling one another, consider this line of thinking, “We both spend but on different things. Let’s budget”
Create a spending plan together that addresses your individual and combined financial needs and goals. This will often mean having a joint account for “family” expenses and individual accounts for personal spending. The budget should be a reflection of both spouse’s current and future lifestyle needs.
“You worry too much!”
It can be frustrating when a spouse worries constantly about money. In my experience the worry comes from a lack of information about how money is being spent, or whether certain financial goals are being achieved. Even if the worry is unfounded, the solution is complete disclosure. Regular meetings to review the family finances will eliminate the mystery and set the stage for constructive, joint decision making and goal setting.
“We aren’t making any progress”
Hire an objective third party to help facilitate dialogue and develop a financial plan that respects both spouse’s concerns and goals. The Financial Planner should have experience working with couples that are having difficulty having constructive conversations about finances. The planning process and ongoing, regular meetings with the planner will help diffuse the inter-couple stress and keep them focused on working together constructively.
Rona Birenbaum is a certified Financial Planner and is licensed to do financial planning. Rona is registered through separate organizations for each purpose and as such, you may be dealing with more than one entity depending on the products purchased. Rona is registered through Caring-for-Clients for financial planning services. This website is not meant as a solicitation for financial advisory services. Financial advisory services are available through the facilities of Queensbury Strategies Inc. Financial Planning is not the business of or under the supervision of Queensbury Strategies Inc. and Queensbury will not be liable or responsible for such activities.