In the haze of love, newlyweds often forget to discuss the one topic that experts say can make or break their marriages-money. Arguments over
finances are a leading cause of marital strife, and figuring out how to make money and marriage work are at the center of keeping love strong. When you and your sweetie diverge financially, often the relationship isn’t far behind.
Whether you’re just starting out, still looking for love, or facing financial heartbreak, handling finances requires constant communication and creates intimacy and a shared investment in the relationship.
The black enterprise Guide to Love & Money is a how-to for keeping your relationship and bank account intact. Following are four tips from marital and financial experts as well as couples, who discuss their challenges and how they have come to enjoy the journey.
1. Disclose your financial history and money management style (or lack thereof) to your significant other.
When marriage is imminent, pull each other’s credit reports. Talk about how much you earn. Discuss how much you have saved up in your retirement account. Calculate your net worth (that involves writing down all your assets and debts) individually and as a couple. Share information about supplemental income, monthly expenses, and existing loan and credit card debt.
“Just like we ask our partners about their health, sexual history, and their religious upbringing, so too should we ask them about their money morals and financial habits,” says Lynnette ?Khalfani-Cox, a New Jersey-based financial expert and author known as The Money Coach. As much as 70% of all divorcing couples had ?financial troubles in their relationships, Khalfani-Cox says.
Asia Stoddard knew her future husband’s credit was bad, but she had no idea that he’d once declared bankruptcy. She didn’t find that out until months after they had exchanged vows. The first time Stoddard, 40, saw her husband Joe’s credit report was when they were attempting to purchase a property in Maryland. His credit file was riddled with unpaid debt.
Joe, 38, wasn’t intentionally hiding his past money mishaps from Asia when they married in 1996. They simply had never thought about having a heart-to-heart about their financial histories. “Before getting married we didn’t have any discussion,” Asia says. “We just knew each other. We became friends, we dated, and we got married.”
It is common for couples to fall in love and forget to deal with crucial details such as money management, says Mechel Glass, director of education for Consumer Credit Counseling Service of Greater Atlanta. Glass, who teaches a financial literacy class called “Saying I Do,” says many people “fall in love-head over heels-but then that’s all they know about each other.”
The Stoddards, who bought the property in Maryland and now own International
Marble and Granite L.L.C., which supplies stone products, such as countertops and flooring for homes and ?businesses (Asia is also a real estate agent), say their first years of marriage were full of unpleasant financial surprises. Among them: their financial styles were totally different. Joe is an entrepreneur at heart, impetuous, and a risk-taker. Asia is careful and reads every line of a contract before she signs. In the early days of their marriage, Joe often invested in small businesses and bought ?properties without consulting Asia. “I didn’t want any input from Asia,” Joe recalls. “I wanted to do it on my own.”But Joe eventually saw the strain that his Lone Ranger financial style had on his wife and family-14-year-old Damarly, 8-year-old Jomar, 5-year-old Joseph, and 4-year-old Janyia-and began to ask for Asia’s help before making investments and other financial decisions. Together, the Stoddards cleaned up Joe’s credit and made long-term investments in the two businesses.
“I had to realize I couldn’t do this by myself,” Joe says. “I needed her.”
Now the Stoddards have a cheat sheet that lays out all of their investments and accounts so that they can both be involved and informed regarding their finances. They have also advised other couples in a marital money management course they facilitated at their church, opting to put their financial mistakes out there and help others.
“For better or worse, you inherit all of your fianc’s finance issues-the good, the bad, and the ugly,” says credit counselor Glass. “While income generally increases with a marriage, oftentimes expenses increase, too. Take a realistic look at what your new monthly expenses will be as a married couple. Keep in mind that certain bills will increase, such as groceries, commuting costs, and even dry cleaning. Be sure to plan the amount of money you will place into savings each month to create a joint emergency fund, to save for a down payment on a house, or even to build a joint retirement nest egg.”
2. Talk money with your honey regularly.
Communication sparked by finance discussions can increase marital satisfaction and help alleviate other pressures that lead to divorce, marital experts say.
“The most frequent subjects that couples fight about are money, sex, children, and in-laws,” says Mark W. Baker, director of the La Vie Counseling Center in Pasadena, California. “What we typically find is that it is not just about money, but it is about what it represents to each of them. One couple I was working with recently-she was raised in a family where they would spend their last penny buying toys … at Christmas, and he was raised by a family that scrimped and saved to send him to college.” For her, love meant spending money. For him, love meant saving.
Wayne and Tia McCollors attended premarital counseling before they married in suburban Atlanta three years ago. They pulled each other’s credit reports and merged their finances on a spreadsheet, following our experts’ advice. Still, they faced challenges. Wayne, 32, ran his own business-Wayne Anthony Realty and Investments-and always invested more money than he saved. Tia, 34, found comfort in her reliable 9-to-5 job as a public relations professional. They were the classic case of financial opposites attracting: spender meets saver. Wayne wanted to invest their savings in real estate rather than let the money accumulate in a savings account. Tia worried that they wouldn’t have access to the cash they needed in case of an emergency, and she also feared getting into debt.
“She was always independent and felt like she was being torn apart from her security,” Wayne recalls. When Tia became pregnant with their first child, Jayce, who is now 2 years old, she wanted Wayne to get a job. The key to working through their impasse was communication.
“It’s very common for financial opposites to hook up,” Khalfani-Cox says. “One person is a spender and total impulse buyer, and one person is a saver, planner, and budgeter. It
really doesn’t have to be the death knell to a love match.”
After many discussions, Wayne convinced Tia that investing could lead to greater financial freedom. Wayne also allowed Tia to hold him accountable financially, giving her a greater degree of trust that their family was financially secure. “We are really open and honest with each other,” Tia says. When Tia and Wayne first married he saved only 5% of his income, but now saves 15% while re-investing the rest back into the business.
To make sure such discussions happen, Khalfani-Cox suggests couples set a financial “date night” at least once a month. “The idea is to talk through issues,” she advises. “Talk about your dreams, planning your next vacation, or other upcoming plans for spending money. Check in with your partner and reconnect.”
3. Agree on a plan-Who’ll make sure the bills get paid? How will you set up your acco
unts?
Both the Stoddards and the McCollors manage their money using a joint account for household expenses, but they have separate accounts from which they make small purchases. One spouse then takes the lead in the day-to-day oversight.
Asia, who has an eye for detail, makes sure the household bills get paid. Still, she and her husband, Joe, now regularly discuss how to spend their money. Before buying school clothes for the kids, she’ll call Joe to check if they are on the same page.
Wayne McCollors has put his household’s finances in accounting software that makes tracking them easy. He also pays the bills, but Tia is involved in the decision-making.
“Someone is going to end up being treasurer, that’s how marriage works, but once every two weeks talk about how the bills are going,” advises Michelle Singletary, a Washington Post financial columnist and author of Your Money and Your Man: How You and Prince Charming Can Spend Well and Live Rich (Random House; $14.95). To further foster financial unity, Singletary suggests ?couples do away with his and hers bank accounts and keep the money in one pot. Singletary and her husband have an agreed upon ?allowance, and once or twice a month they dip into the joint ?account to pull out that money. The rest is spent, saved, and ?invested jointly. “You have to plan together. You have to save ?together,” Singletary says. “When you have everything in one pot, there’s no issue about who earns what. If one spouse gets a raise, it goes into the pot.”
Khalfani-Cox, who has been divorced and recently remarried, takes a different view. She recommends couples set up a joint ?account for paying household bills and separate accounts so that they maintain a degree of financial independence. “You need to have credit established in your own name in case of ?divorce or death,” she says. This is true for both men and women.
4. Use money talk as an opportunity to discuss your goals, hopes, dreams, and values.
During their discussions about their finances, the McCollors began to talk about the plausibility of Tia leaving her public ?relations job and starting her own business. Wayne, who came from a family of entrepreneurs, had been self-employed during the course of their relationship. “I was starting to get a little ?envious of the entrepreneurial lifestyle,” Tia recalls with a laugh.
Wayne encouraged her to pursue her dream of writing Christian-themed novels and children’s stories full-time. They looked at their finances and together determined they had enough ?investments to support her career change. Tia left her job, which paid in the low $50,000 range. She’s now written several books, including A Heart of Devotion (Lift Every Voice; $12.99).
“You’ve got to believe in your partner’s hopes and dreams and they’ve got to believe in yours,” advises credit counselor Glass, who says discussions about money have the potential to bring couples closer or tear them apart. “Discuss your plans for the future and how they can impact your finances.” The McCollors now generate about $160,000 per year from their various streams of income including commissions, royalties, investments, and rentals. Using their business model and financial planning, they project their cash flow and equity to double over the next year.
“If you are married and you are one, there’s no sense in hiding anything,” Tia says.
The McCollors are also willing to compromise. For example, Wayne was eyeing a luxury Mercedes-Benz, but the couple made a joint decision to wait and live below their means.
Instead of the car, they agreed Wayne could buy the large flat- screen television he has been wanting. They are both happy with their choice.
“There’s no better way to create intimacy with your partner-emotional, physical, spiritual, and financial-than just the ability to talk and communicate and share with that person to the best of your ability,” Khalfani-Cox says. “Just honestly put it out there. It ?really works to establish a bond that’s virtually unbreakable.”
Test Your Marriage Money Skills
Take our marriage money skills quiz to improve your joint understanding and communication about money. You and your partner should answer the questions separately and then compare notes.
My partner handles money:
a. Like a bull in a china shop.
b. According to our mutually agreed upon plan.
c. In a way I have never completely understood.
My partner and I have discussed:
a. Our long- and short-term financial goals.
b. Why we never seem to be going anywhere-and whose fault that is.
c. The balances in our separate accounts.
I understand how to:
a. Call my honey and ask for a larger allowance.
b. Tell a bill collector: “No! No cash for you!”
c. Pay bills, manage accounts, and talk to financial advisers.
My partner and I divide the money management tasks in our household:
a. By custom.
b. By natural ability.
c. By sheer neglect.
We have established a budget based on:
a. Our current spending habits and our future financial goals.
b. A document prepared 15 years ago by a credit counselor.
c. Never mentioning the “B” word in our household.
I know my spouse’s:
a. Investment personality and risk tolerance.
b. Greatest financial foibles.
c. Name.
I am confident that:
a. I know everything about my partner’s financial picture.
b. I know where my partner stashes cash.
c. I don’t feel too confident about the whole thing anyway.
My spouse and I have made a commitment to:
a. Each other.
b. Never go to bed angry.
c. Discuss our finances regularly.
Scoring:
The answers that lead to better communication about money between partners are listed below. If you and your partner have a different answer to the question, this is an excellent opportunity for both of you to discuss your feelings.
Excerpted from It’s More Than Money – It’s Your Life! by Candace Bahr and Ginita Wall, and reprinted with permission from the Women’s Institute for Financial Education (WIFE.org).
1. B
2. A
3. C
4. B
5. A
6. A
7. A
8. C