Couples and Money – Part I

This article was originally published for RC Peck’s Fearless Wealth Newsletter in April 2008.

Money may not be the root of all evil, but it is the root of almost all arguments between couples—there are few issues that have more impact on life as a couple.

When it comes to finances, you and your partner are probably working in opposite directions and wondering why creating wealth, or even talking about money, is a struggle.

If you argue and struggle enough, you may end up experiencing your biggest expense, and maybe even more than once. No, it’s not taxes; it’s divorce. Divorce costs big money, and comes with high costs in the areas of relationships and emotions. It impacts kids, communities, jobs and friendships.

Imagine what it would be like if you and your partner had agreement and alignment around money. In such a scenario you and your partner would have a financial plan and would be working on it as a team.

As a result of building a plan that matches your dreams as a couple, and taking actions that match the plan, you build greater intimacy with your partner. This sounds pretty good, right? So let’s find out why this does not occur naturally with couples.

We will have to start even before the marriage or partnership officially begins. There you are, and the person of your dreams is next to you. All you have to do is think about this person and you get giddy.

Perhaps you have visions of the two of you sitting in a cozy beach cabana in an exotic country with people waiting on your every whim. Your drinks are sweating from the heat but they are cool to the touch.

This is paradise, and this is how the rest of your relationship is going to be; you’ll live off the land (read live off credit cards) and everything will be happiness ever after.

Well, that’s not really how relationships work. Once you’re together, instead of sharing the beach cabana you’ll find yourselves having conversations about balancing the checkbook, 401(k) choices and spending habits, which will lead you to ask yourself, “How did I get from beach cabana to balancing check books and talking about 401(k)’s so fast?”

Fantasy and reality collide head on at the wedding ceremony (or the commitment ceremony). You spend $40,000 for a one-day event (that day you’ve always dreamed of) and expect to live happily ever after. Right? Hmmmm … let’s look at the reality here. There are at least four problems that you can expect to surface and get in the way of “Happily ever after.”

Problem Number One: Unrealistic expectations. Relationships just don’t work in real life the way they do in fantasy. If you are currently in a committed relationship, you already know that conversations about spending, balancing check books and money for the kids’ college fund are far more likely to happen than conversations about exotic fantasy vacations. This first problem typically manifests as something like “This is not how I envisioned it.”

Problem Number Two usually follows closely on the heels of problem number one: fighting about money. Couples rarely talk about their wants related to money and how they are going to support each other in fulfilling those wants because when they do, they fight.

They don’t really want to fight, so they just stop talking about money. And there it is; the second problem manifests as “Don’t talk about money unless we absolutely have to because we don’t want to fight.”

Problem Number Two leads quite naturally to Problem Number Three: Thoughtless action or inaction. Since the couple doesn’t talk about money they either do nothing about growing their wealth or they find themselves forced to do something to deal with the consequences of doing nothing.

In response to this feeling of not knowing what to do, but feeling that something must be done, the couple unwittingly buys a high-risk condo in Miami without doing the due diligence (read: fill in any rash bad investment choice), or the risk assessment or any type of research and assessment.

The “We must do something” can be as dangerous as “Let’s do nothing because we don’t know what to do.” What often happens is that the action resulting from “We must do something” is ill-formed and does not fit the couple’s risk or risk tolerance profile.

Because the couple feels something needs to be done, but can’t talk about it, they do the “something” without first building a plan. In other words, their plan is no plan with a bunch of hope that it will all work out, and when the ill-formed action doesn’t work out it only further supports their unconscious choice to do nothing, and it creates a vicious cycle.

This problem manifests as “We don’t know what to do so we’ll do nothing” and leads to the fourth problem.

Problem Number Four: Men and women handle stress differently. The male’s approach is to solve issues linearly. Hit the problem head on and take care of it. A male will ask himself “How do I solve the problem?” And the emotional part of his brain shuts down so he can solve the problem.

When a female is under the same stress she says to herself “I want to talk out the problem, and I want my feelings about it to be heard.” When a woman is under stress the speech part of her brain lights up AND, at the same time, the emotional part of her brain lights up.

Men’s brains handle problem solving and emotional management as two separate functions. Women’s brains integrate them into one process.

Most men will define their value in terms of income or net worth. Most women will define their value by the quality of their relationships.

Most men will show and express their love by giving or doing something. Most women will show and express their love by talking or by giving support. (For more information, read Why Men Don’t Listen and Women Can’t Read Maps by Pease and Pease, 2000.)

Let’s say a woman says to a man “We need more money.” The man’s reaction will most likely be to turn his emotions off and go into problem solving mode: I must work more, I must work harder, I must be more of a man, and he might even retaliate by saying to his wife “Well, you spend all our money. It’s you who bought that $200 pair of shoes.”

Suppose a husband makes the we need more money statement to his wife. Her reaction will most likely be something like “How will this situation change our relationship? Will I get to spend as much time with him? What will happen to our involvement with the community?”

Her brain will make her want to talk it through before even beginning to solve the problem. And the more the husband goes into problem solving mode the more the wife is going to want to talk, creating a loop in their conversation that could quickly lead to a fight.

This of course leads back to Problem Number Two: We fight about money, and since we don’t want to fight we will stop talking about it.

(to be continued… please see part II)

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