“Every couple has a financial relationship,” says Scott Palmer, one half of “The Money Couple.” The other half, wife Bethany Palmer, chimes in, “Almost every decision has a money component.” This includes major purchases like homes or cars, to the smaller, more mundane ones like: Should we go out to eat? Which shoes will I buy? What grade of gas do we put in the car?
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The Palmers have a combined 38 years of financial planning and are working to get couples to talk about money issues on a regular—if not daily—basis. According to Scott, 12 years ago they realized “we were putting together great financial plans for clients, doing comprehensive worksheets, but we found that within two to three years [these couples] were still miserable, still fighting over money.” The shock really hit home when two of their close friends announced they were getting divorced; unresolved and unrelenting disagreements over money were a big factor.
Determined to do better for their clients, the pair decided to investigate the intangible factors that ultimately make or break the best-laid financial plans and marriages. “We believe we’ve cracked the code,” asserts Scott. While most people think the money issues that tear a couple apart are the biggies---saving for retirement, estate planning, taxes--that may not be the case. Bethany says they’ve concluded that “what grates on your nerves are the everyday decisions. These are the things that add up and lead to divorce.”
Partners have different money personalities with a distinct set of attitudes that determines how that individual thinks about money. As they explain in their book, First Comes Love, Then Comes Money, which identifies five money types, problems arise because one member of a couple simply cannot understand why his/her partner doesn’t see things from the same perspective.
For instance, the Security Seeker, who likes their financial future neatly laid out for the next 30 years, flips out when the Spender buys something that isn’t specified in the plan. To the spender, the purchase makes perfect sense: The couch was 10 years old and had an embarrassing stain that wouldn’t come out and this one was on sale. But the seeker sees and hears: Now we can’t afford to put $1,000 into our retirement account for the next two months. We’re going to have to have to postpone retiring!
Other money personalities include Risk Takers, Flyers and Savers. The Palmers maintain that people don’t change money personalities; a risk taker can come to understand and even appreciate a saver, but will never become one. Interestingly, even if you have a partner with the same money personality, you’re still going to have money conflicts. (The Palmers themselves are both spenders.) However, they insist that once you identify your partner’s money personality, you can anticipate, discuss and diffuse much of the financial stress that ruins what started out as a loving relationship.
Honesty and compromise are the keys to happy money management, and the Palmers advocate two exercises. The first is the Money Dump: both partners come clean with all of their debts, overspending, financial control issues, secret accounts, etc... Then, without judging or insisting your partner change his/her money personality, you discuss how to move forward without yelling, accusing, or degrading each other.
After the Money Dump, commit to a Money Huddle: A monthly meeting to pay bills and (calmly, lovingly and rationally) talk about any financial “mistakes” that one or both of you made. (“You didn’t tell me you already invested the money I planned to use to pay for the couch in our IRAs?!”) The meeting is also the time to discuss future purchases and talk about long-term financial goals. Instead of making this a dry, arduous chore (guaranteed to send the Flyer screaming out the door) the Palmers recommend making it a date; pour a glass of wine, hold each other’s hands and toast to your commitment to a healthy financial relationship.
It’s crucial that couples be open and honest to have a healthy financial relationship that incorporates each other’s money personalities. Many, if not most, couples practice what the Palmers call “financial infidelity,” which they define as “any hoarding or cheating. You say you’ll only spend $100 at the stores, but you spend $200 and you don’t tell your partner.” Infidelities can range from having a secret stash that your other half doesn’t know about to serious debts. They cite the case of one client who learned that her partner had run up $30,000 in pornography debt on a secret credit card he had taken out in his name only.
Often, the financial personality of one partner causes the financial infidelity of the other. Another case the Palmers cite involved a husband who was such a penny-pinching saver that he put his wife on a very limited weekly budget. Since a credit card statement can now be conveniently sent via e-mail (thus avoiding the possibility your spouse might find it in the mail), she opened her own account. When they met with the Palmers, he had discovered her secret and was furious. After reviewing months of charges, however, Scott says they ended up telling the husband it was his fault: his wife had only used her card to buy school supplies for their children, additional food and other necessities that didn’t fit into what her husband had deemed to be an “adequate” budget.
The Palmer’s book is like the couple themselves: easy-going, funny, entertaining and enlightening--and here’s the best part, there’s not a single graph or equation in it! Most of all, it resonates. It opens readers’ eyes and helps them see why couples argue so much over stupid things with the person they supposedly love. Every wedding gift we give will include a copy. I’m buying copies for my friend and I might even be able to convince my husband, the risk taker, to read it.
Ms. Buckner is a Retirement and Financial Planning Specialist at Franklin Templeton Investments. The views expressed in this article are only those of Ms. Buckner or the individual commentator identified therein, and are not necessarily the views of Franklin Templeton Investments, which has not reviewed, and is not responsible for, the content.