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| The Basics | What your money style says about your love
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How two people share money and the responsibility for handling it tells a lot about the nature of their relationship.
By MP Dunleavey
It dawned on me recently that I know almost nothing — financially speaking — about the man I live with.
I know the basics, but barely: I know his approximate yearly salary and the fact that he has no debt. I am vaguely aware that he has investments of some kind, somewhere.
And I realize that this is pathetic.
Its not that we havent discussed the larger fiscal picture: buying a home, having a child and — as I noted in a recent column about motherhood (The cost of being a stay-at-home mom: $1 million) —taking care of that child. We just havent spelled out how wed structure those rather big financial deals.
When we moved in together, we divvied up the household expenses along with the chores. Since he earns more than I do, and — as I noted in another column about debt (A 24-hour debt reduction plan) — I am determined to be debt-free by years end, I pay a slightly smaller percentage of those expenses than he does. Everything else is separate and equal. No joint accounts. No discussion of joint accounts. With rare exception we pay for movies, dinners and vacations separately. Our motto could be: "To each his or her own, out of his or her own pocket."
Which I thought was fine — until I started wondering. How deep is our love, if we never bare our innermost bank statements? My cadre of married friends and family members may have varying money styles, but at least theyre on the same page vis vis their joint expenses, right?
Probably not, says David Bach, the author of Smart Couples Finish Rich, who had to face these questions himself when he got married not long ago. If the No. 1 question people have about sex is, How often are THEY having it, he says, the No. 1 question about money is: How do THEY handle it? Everyone wants to know whether theyre normal, he says. The truth about money is that every couple is different.
As I made embarrassing personal money inquiries of people I knew, I found Bach was right. Each couple has a different system — or lack thereof — and a startling array of romantic fantasies, interpersonal power struggles and other relationship patterns get played out in the fiscal arena.
I found four major money styles that fit most of the couples. (Needless to say, Ive had to change the names of everyone I quote from here on, or theyd never speak to me again.)
Money style No. 1: Double Dutch
Thus far, this is where my partner and I fit in. Everything is separate. Including our closets. Like me, experts are somewhat concerned about what this deeply divided style reveals about your relationship. To some extent, they follow the philosopher Khalil Gibran and advocate some spaces in your financial togetherness. Bach, for example, says that he and his wife agreed to keep their assets from before the marriage separate (a good move for a best-selling author), but consider everything after as a joint asset. Still, he says, I think every couple should have a She account, a He account and a We account. I dont want to know what my wife spends on clothes!
Mari Adam, a financial planner in Boca Raton, Fla., thinks that separate accounts are key, especially for women. Americans have a more romantic view of partnership — this idea of total sharing — and we want to extend that to money. Women in particular are afraid to say, What do you earn? or How much is this costing me? Money is seen as a negative thing, so most people dont talk about it. Theyd rather wait until they get mad at each other.
At the same time, keeping everything seemingly separate-but-equal can camouflage a more serious lack of communication or sharing. Bach says the couples he knows who have been married for 50 years tend to plan their whole lives together — including their financial lives. Because how you plan financially really reflects your shared goals and priorities, he says.
Money style No. 2: Inseparable
I know couples like this, and you do, too. Every financial move is as smooth as Torvill and Dean performing a duet on ice. They pay bills while holding hands, smooch as they sign their mortgage — and generally make me sick.
But Im a crab, and Violet Woodhouse, a planner and family law specialist in Newport Beach, Calif., thinks I should get over it. As the author of Divorce and Money: How to Make the Best Financial Decisions During Divorce, shes a firm proponent of the merged and fully disclosed relationship.
The fundamental thing is this, she says. You have to be able to communicate and talk about everything. If you cant talk about every aspect of money with your partner, why did you marry them?
She has an excellent point. Woodhouse thinks were all in financial denial. She believes that separate credit cards or checking accounts promote a lack of accountability. Couples who arent afraid to share their finances probably arent afraid to open up and trust on other levels as well.
Part of the full disclosure system, Woodhouse says, is learning to open your eyes to who your partner really is, financially speaking.
She advocates prenuptial planning, even if you dont want to sign an actual prenup. (Although most experts agreed that if you have kids from a prior marriage, a prenup is a sensible way to protect their interests as well as yours.)
Money style No. 3: Saver/Spender
This is the couple that is perpetually out of sync, mainly because they have different priorities for their money. Naturally, Bach says, this reflects the fact that they have different priorities in their lives — and the ongoing financial power struggles are a way to act this out.
When Adam works with couples, she often uses a short quiz (see link at left) to identify potential conflict areas between partners. Two common sore spots are 1) whos the saver and whos the spender, and 2) how the partners feel about acquiring material possessions versus living a more spiritual or simply more frugal existence.
Luckily, there are ways to cope. One couple I know was savvy enough to spot the saver/spender trend early in the relationship. For them, keeping their money separate (except for shared savings) seems to keep the peace. Otherwise, she says, shed fret about all the electronic gizmos he buys and hed go ballistic over her shoe habit.
Money style No. 4: Household CFO
All the experts agree that no matter what money style you and your partner have, the most important factor is whether it works for you. Sometimes that requires a bit of trial and error.
For example, Adam recommends that the person who handles the money be a detail person. (Anal retentive was her actual phrase.) Its the one who is willing to read that horrible employee benefits book who should handle the finances.
The fact that one person might take the lead, then, may not feel particularly balanced, but its often the most successful system for the couples who stumble onto it. In fact, it may reflect a strong spirit of teamwork, and recognition that those with superior skills in this arena should be allowed to take the lead.
I know two couples that take this approach. In Couple A, she handles everything — even their taxes (ugh). In Couple B, he is a computer maven and does all the banking, bill paying and overall financial planning. In both couples, one spouse is perfectly happy to cede control. Its interesting to note that these couples use the same divide-and-conquer system in other areas of their lives. One might do all the social planning; the other takes charge domestically.
The risk with this approach is that the Household CFO may behave in ways that are controlling and may not encourage their mate's participation in financial decisions. Worse, the person in charge of keeping the books can keep secrets, sometimes with disastrous consequences.
Overall, it does seem that money is a metaphor for how you communicate with your beloved. As Mari Adam points out, Most people who have money problems had the problems already. You can have different money styles and you can work them out. Money is reflective of other problems, not the cause.
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