Tips for Two

 To find common ground on financial issues, couples need to uncover the why behind money management.

Couples often agree to disagree.

But when it comes to money, this strategy won’t work.

One of the most important services that financial planners offer their clients is guidance in crafting an overall vision and money strategy. And helping clients achieve financial success comes not only from knowing the numbers, but from understanding how clients think about money. When working with couples, the key to opening the door to productive communication is by negotiating common ground.

Finding common ground is essential when making joint life decisions, but when it involves money, it becomes more complicated. Listening to any economic news illustrates the challenging nature of the process whenever two or more are involved in money decisions. Congress’ inability to make budget or fiscal policy decisions proves just how difficult it is to find that common ground necessary for moving forward.

Same goes for couples. Combine the expectation of divorce for new couples at around 50 percent with a variety of studies that suggest money is the most divisive topic in relationships, and it’s easy to see why finding common ground is vital.

Whether it’s a spouse, partner, sibling or Congress, duo money management is tough. Why? Because we can’t find that illusive common ground if we, as a society, don’t really talk about money.

“What do you mean?” you ask. “All we ever do is talk about money!”

Do we?

While a “SmartMoney Magazine” survey revealed that 70 percent of all couples talk about money at least once a week, the communication isn’t effective because we only talk about the mechanical side of money — what we do with money. And we talk about that incessantly.

Think back to Congress. What do we hear? Cut spending or raise taxes. We hear what to do without the why behind it. I’m talking about the deep down why at the beliefs and values level. And without examining this level, there’s no chance of working toward a common good.

It’s the same with couples: Spend less or earn more, cut up credit cards or put more into savings. Because we focus on the what of our current problems, we never get to the underlying issues that divide us. Consequently, we can’t find our way to a firm foundation for making joint decisions.  

To bring couples together on financial issues, we need to uncover the why behind money management. We need to dig deep to understand why we do what we do with our money. Without understanding the why, we can never fix the what, or move forward with our joint financial life. With couples, this is exactly where the difficulty begins. It’s tough enough to understand why I do what I do, but now I’m being asked to understand another person. What’s more, finding this understanding is difficult at best because we’re standing in two different places and operating from two dissimilar sets of beliefs and values.

Most of us picked up our money beliefs, values and behaviors by osmosis — that’s right, osmosis. As children, we watched from a distance as our families, communities and society all managed money. We listened to conversations and arguments, advertisements and commercials, news and commentaries. We took it all in. And because no one explained the why behind this passive financial education, we put our own spin on it and made it our truth. We interpreted the situation our way and either accepted or rejected it. One way or another, we made our version the truth and operated accordingly without full understanding. This unexamined, misinterpreted version became the foundation for our money beliefs and values. And today, we look at anyone who operates differently as questionable.

Let me give you a quick example. Charlie’s parents taught him how to save. Always worried that there wouldn’t be enough, they passed their belief on to Charlie. Even though his financial affairs are in order, Charlie can’t find peace unless he’s constantly scrimping and saving. His wife, Judy, on the other hand, grew up with a carefree, creative mother who never worried about money (or debt). Living for today was more important than worrying about the future. After all, money wasn’t everything.

Which belief is right?

Well, it depends who’s living it.

It’s these incongruent, unexamined beliefs that make joint financial decisions complicated because before we can hear an opposing viewpoint, we label it as wrong and write it off. There’s no room for negotiation because it doesn’t fit our imagined truth. We look at our partner as unreasonable, out of touch or irresponsible. There’s no room for negotiation — only compromise with a big dose of resentment.

This is where the importance of real communication and finding common ground comes in. Arguing about money can be a thing of the past if you start your money conversation in a place of exploration and openness about where your partner’s money beliefs originated. This exploration is where you can start establishing the common ground for making joint decisions.

Then, after you uncover the why, you can begin moving forward together. With this new awareness, you can find middle ground to move beyond fears and stretch to find alternative solutions. Talking, really talking, about money opens the door to meaningful dialogue for designing a money plan that works for the greater good.

Once you have clear communication, know why you both do what you do and find your common ground, it’s then easy to focus on an overall vision and money plan that will keep both of you moving in the same direction. And once you have that joint vision, the small, everyday decisions about what to spend your money on take care of themselves with little or no effort.

Here are some easy tips to follow to keep the communication going:

• Talk – Talk, talk, talk. Money, like sex, is still a taboo topic, and we often don’t have a clear idea about how our partner thinks or feels about money. 

• Find Balance – Balance power around money. One person making all the decisions and having all the control is a recipe for disaster. Find ways for you both to be equally engaged in all money decisions.

• Make Decisions – Decide together what’s mine, yours and ours. Most couples have their own hybrid system for what works best. Find the one that’s best for both of you.

• Define Your System – Have a clearly defined money-management system all the way from who handles the mail to who sends out the checks. Without a well thought-out operational plan, things fall through the cracks.

• Address Problems – When things get tough, address problems immediately (no secrets allowed). Avoiding the issue only makes it more toxic and drives a wedge in the relationship.

• Perform Checkups – Schedule an annual money checkup with each other. Things change, and just like our physical health, money management needs an annual checkup to keep it healthy and relevant.

• Talk a Little More – The most important thing is to have open communication with no blame or shame. We all have hang-ups around money. Treat your partner with compassion.

At the end of the day, couples need not argue about money if they’ve negotiated a common ground for making decisions. With your financial planner’s help, you can make a plan and stick to it, giving you power over your money.  

Don’t become victims of your finances. Talking about money from a common perspective enables you to operate as a team, which is exactly what you are.

/ Jane Honeck is a CPA, personal financial specialist and author of the book, “The Problem With Money? It’s Not About the Money!” She’s also a money coach specializing in financial and life planning for individuals and couples.