For *Jackie Fredrick and her husband, Alan, sitting down to pay bills used to be an exercise in frustration for both of them. Her husband would complain that she spent too much money on their son, but the money he had disappeared almost as fast. After totaling up over $15,000 in credit card debt, it became obvious that they had to do something, as both their finances and marriage were suffering.
Sound familiar? According to the Association of Bridal Consultants, more than 67 percent of newlyweds believe the most serious conflict in their first year of marriage is about money. In addition, of the 40,000 consumers who call in to Cambridge Credit Counselors for free financial advice, about 4 percent blame money problems for their divorce.
What's Your Financial Personality?
Cambridge Credit Counseling Corp, a not-for-profit organization, provides credit counseling, educational assistance and budget planning services to clients throughout the United States. Chris Viale, Cambridge Credit's general manager, speaks firsthand to more than 800 consumers a month and understands the toll that poor financial planning can have on a relationship and a family. "Financial stress in any relationship can easily breed anxiety, blame and anger," says Viale. "Understanding your financial personalities early on and routinely discussing your finances will help build a successful and healthy relationship."
By financial personality, Viale means whether you are a saver or a spender or if you are frugal as opposed to an impulse shopper. Once you understand this, take the time to set parameters and roles for your relationship. Will you share a bank account? Will one person manage the bill paying? What is a reasonable spending budget you can both agree on?
Viale believes it is necessary for couples with problems like Jackie and Alan to sit down and discuss their financial problems as soon as possible. "They should gather up their monthly bills, expenses and outstanding payments, including loan charges, credit card bills, mortgage payments and daycare costs, and set a budget for themselves," says Viale. "It is not always necessary to drastically change your lifestyle in order to get out of debt. More frequently, couples can get a hold on their financial situation by simply cutting out or back on expenses that they may not realize are excessive."
Getting to that point isn't always easy, however. For Fredrick and her husband, different financial personalities contributed to some tense discussions about money. "I would buy things when I was down, which is a bad, bad habit," says Fredrick, a homemaker and mother of one from Oakland, Tenn. "My husband and I have a habit of spending what we get, so neither one of us has been good about putting money back. We used to fight about it all the time."
Mind Over Money
Sharon Durling, a personal finance speaker and author of the book, A Girl and Her Money: How to Have a Great Relationship Without Falling in Love, believes there are many people like Fredrick who tend to be emotional spenders. "I believe money issues are symptomatic of underlying unresolved issues such as disrespect, fear, abandonment issues, self-loathing and communication styles," says Durling. "People try to solve their problems via money and possessions, and the divorce occurs as a result of surface financial issues."
Durling believes that overspending is frequently not about the money and the things it buys, it's about getting our deeper needs met. It results from the lies that we believe: that money will buy what we want, reduce our fear, eliminate pain and satisfy our desires. But the truth is it can't, and it won't. "Get your relational needs met in a relationship not at the mall or car dealer," says Durling. "When couples recognize and commit to this truth, they will be motivated to engage in healthier behaviors that will meet their relational needs, taking the stress out of their frantic financial lives."
"I have long claimed that diets don't work and budgets don't either," she says. "This is not simply a couple /marital problem, but relationship and financial issues are huge with single people, as well. Wherever people are struggling with issues of low self-esteem, abandonment issues, fear, guilt, etc., one will often find correlating money problems."
A New Plan
Durling believes that couples who are having financial problems need to establish mutually agreed upon practices going forward for making money decisions, such as setting a dollar amount, a threshold at which they check in with the other before making a purchase.
"Some couples set this at $100," says Durling. "It's a check-in, not an approval stamp. If these issues are truly tearing the couple apart, I would recommend counseling. The couple must agree upon a new plan, a strategy that they both come up with and agree to commit to."
In order to climb out of debt and keep finances from tearing a couple apart, Durling gives the following tips.
Get accurate information �?Without the ability to figure out where you are and where you want to go, there is no point in just rooting around, discussing, arguing, blaming, hoping, making missteps, feeling guilty, spinning their wheels and thinking they should "just do something" sometime soon to solve their problems. Create a plan �?When you see where you are relative to where you want to be and look at the gap in the middle, you're likely to be motivated to create the necessary change to get there. You can engage in a plan and establish real concrete steps you can both take to reach your goals together. These might include: - Establishing specific monthly savings goals.
- Embarking upon a very short-term austerity program to jump-start your debt payoff program.
- Reviewing expenses together initially and then with a follow-up every three weeks to assess and reassess what services and products you can cut with the least impact to your lifestyle.
- Setting that "threshold" at which you always check in with each other on larger expenses.
- Consider postponing big purchases or moderating planned upgrades for the house, auto, sports gear or wardrobe until you're seeing progress toward your goals. Then reassess.
Track spending like a heat-seeking missile �?Monitor progress on a regular basis to check financial activity and assess what's working and adjust what's not. One way to do this is agree to put all purchases over $5 on a debit card and make a notation of all cash spent under $5. This way the debit statement does all the work �?it tracks spending for you! "We've just started putting our finances into Microsoft Money and watching how we spend our money," says Fredrick. "I've also started doing a budget each month. It's not written in stone, but it gives us a good idea [of] where our money goes each month. Our main thing right now is accountability."
As far as her emotional spending, Fredrick has found tools to help her with that as well. "It boils down to self-control," says Fredrick. "If I feel down, I'll get in here and really clean the house. Or I'll stop everything and read a book or watch a movie �?whatever it takes to distract me from my mood. I've had to think about what makes me feel good, besides spending money, and do it."
Fredrick is confident that as their ability to handle money improves, the fighting will gradually stop, and they will be on their way to financial stability. "We still fight over it," says Fredrick. "But not nearly as much as we used to."
*Names changed to protect privacy.
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