Today we have a post from Shannon, a regular contributor.
As someone who has been married for ten years, I know that any relationship is bound to have its ups and downs.
One of my favorite songs about relationships is “Just Give Me a Reason” by Pink where the couple is trying to figure out if they are just bent and not broken.
Until this song, I never thought about the fact that relationships can and will bend and sometimes to the point of pain; however, they are not necessarily broken. There will be a number of issues in life that cause relationships to bend, and from my perspective, money is the number one issue.
As a financial planner, I have a front row seat to a number of different money practices. I have seen so many that I am never surprised no matter how crazy they seem. There are a few, though, that I believe are bad for a relationship. Here are 3 money related practices that I believe can force a relationship to go from bending to breaking.
1) Hiding Accounts
I know a number of people who have set up credit or bank accounts without the other person knowing. In the case of credit cards, the person wanted to spend without getting in “trouble” for it and in the case of bank accounts, the person wanted to have money of their own or didn’t trust their partner with the management of the family funds. In either of these cases, if you or the one you love is opening up accounts without telling the other person, you have to wonder about other issues in your relationship like honesty and communication.
I know that we can all rationalize our decision-making processes; however, to me when you are hiding your accounts, it is the equivalent of lying to yourself and the one you love. If you need to open a credit card without your significant other knowing, then you have a spending problem. It is one thing to have separate credit cards; however, each person should be aware of the cumulative spending taking place in the household, especially married couples. Depending on state laws, each spouse is equally responsible for the debt that it incurred while married so the spending that you are doing on the credit card is equivalent to the spending of your spouse.
If you are opening a separate bank account because you don’t trust your spouse with money, I understand that some people are better at managing money than others, but the spouse deserves an explanation of this decision. Perhaps you could include the spouse in your process and help teach him or her better money practices. I don’t think it is fair to completely write someone off as being bad with money management without first trying to help them get better.
2) Spending without Discussing
I don’t necessarily think that you have to discuss every single purchase with your significant other; however, I think for any purchase over a certain agreed upon price, there should be a joint conversation around the purchase. Again, you should think of the spending that you are engaging in as joint spending. Even if you are just in a relationship, if that relationship becomes more serious, the spending you are engaging in today is impacting the future financial health of your family.
I know that most people do not like to be told “no” when they want something; however, sometimes no is the best answer for you. I have a client who complains about her frugal husband all the time and complains how he questions everything that she buys. She was looking to me to support her and her independent purchase power; however, I had to agree with her husband. The two of them made a commitment to each other and their family and they have short and long-term financial goals that they want to achieve.
Each trip of hers to Nordstrom or Macys is taking the two of them collectively further from reaching their goals. They both make nice incomes; however, it doesn’t change the fact that the spending is still having an impact. Rather than think of one person as being “controlling” you should include your joint goals as part of the discussion and let those goals dictate the best spending habits for the two of you.
3) Meeting with Advisors Separately or Individually
As a financial planner, I refuse to meet with married couples individually. I have had to meet people on Saturday mornings or late in the evenings to get all of our schedules to work; however, it is always for the best. Time spent with advisors like accountants or financial planners is a perfect opportunity for couples to discuss their near and long term goals and the best way to achieve them. If only one half of the couple is there, how do you know that your collective goals are being discussed?
I know a number of advisors who only meet with the “husbands,” and then they are shocked when the husband dies and the wife moves her account. First of all, she never had a say at the table and you never cared to get her opinion. I understand that in many of these situations the husband is the breadwinner, but that does not mean that the wife is not contributing to the family and should not have a say in the conversation.
I also know that some wives don’t feel comfortable and don’t want to appear “stupid;” however, I think it is much more stupid to sit back and not have a say in your financial future. You should always feel free to ask tons of questions of your advisors, after all, it is your money and you should feel comfortable with what happens to it, but also, you are paying these people to help you and they should earn it.
If your significant other does not include you in these meetings, you should speak up and ask to be a part of it. You want to make sure that you have a say in your future, but also that you are prepared should you need to be the one making the decisions if anything should happen with your spouse.
What money practices do you think ruin relationships?
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My sister-in-law recently got a divorce. They really struggled with money becuase everything was either his or hers. There was no “ours”. So basically they fought constantly about who paid for what and on a general note, just couldn’t function as a couple. It was really exhausting to watch. I remember one time my (ex) brother in law logged into her bank account (without her knowledge) and transferred out like 4k without her knowledge. His reason? She owed him money. How crazy is that!!
Hiding accounts and spending without discussing are two biggies! I wasn’t aware of additional credit cards opened by my husband. One time when I went out of town on business, he bought a truck. Crazy I know. I’m sure you’re thinking that would be grounds to leave him. Trust me, I thought about it. Thankfully, we are in a better place now, but it still makes me shudder when I think about it.
I agree with all of these. I have a family member going through a divorce and all of their money was entirely separate. In fact, they had entirely separate financial lives. It’s no wonder that things turned out the way they did.
Spending without discussing would be a huge issue – and I agree that people don’t like being told ‘no.’ As a husband, I try to keep in mind that something may not see like a good idea to me, but my wife views it very differently. We deal with this in two ways: 1.) we allocate “blow” money to us each which can be spent no questions asked. 2.) for other items, we have a “key phrase” or whatever you want to call it…The phrase “This is important to me” can be used to communicate that while we may not see eye to eye, on the issue, this is something that I (or she) really wants to happen. As long as we don’t misuse the phrase (and we haven’t) it works pretty well. :)
BudgetforMore What?!?! That is crazy!!! I can’t imagine my hubby logging into my account to take money. That’s stealing. I hate to hear that their marriage didn’t work out, but it is tough to overcome issues like theirs.
debt debs Like I commented on your blog, Deb, and here, sometimes relationships just bend and don’t break. At least your hubby has learned from those bad behaviors and he isn’t continuing to make it worse.
Holly at ClubThrifty I hear ya Holly! And I know you have written about it and I agree with you, that couples should combine money or share financial accounts. If you share a bed and bodily fluids why not money?
DebtChronicles I love the key phrase idea!! I also love the “blow” money concept too. Some people definitely need freedom to spend but as long as it’s within limits and has parameters then I think it is fair for all parties.
I would agree with all of these Shannon. I saw #1 far too often in my brokerage days. I had one client basically tell me that they were saving for their retirement but could’ve given a flip what their spouse was doing. It’s very sad and ridiculous at the same time. Largely though, this is why I think communication is so vital so both parties can be on the same page as well as to manage expectations.
FrugalRules Isn’t it awful when you are sitting back and watching bad things happen to couples? Ugh! I hated it. Communication is absolutely key and I think that is really the root cause of couple’s money problems. It’s not really money problems, but communication problems.
I’m glad to hear that you ensure you meeting with both spouses. I really hate it when one half of a couple has no clue what is going on. My spouse and I have our own portfolios, but I have a rough idea of what is in both of them, while my spouse stalks them both daily online, way more than I look at even my own!
I just had a conversation with a family member about Spending with out discussing. She handles the finances at home but never really clues her husband in on what is going on. She was complaining that lately he was spending too much. It was justified as he had a death in the family and she felt bad about bringing it up at such a tragic moment. However, she spends money without ever
feeling that she needs to explain a purchase. I told her just because you manage the finances doesn’t mean you can leave him in the dark about what’s going on. Obviously they have big issues with money and the D word has been thrown around. I hope they can resolve the bend and not break but right now it does not look good.
Complementary to the above, I feel that it is so important to budget as a couple and both be in agreement with the budget – similar to item #2. Personally, we do not have a “his” and “her” budget item or “blow” money for individual use. Such categories simply do not reflect our joint commitment and could create a misleading mindset regarding joint spending. Our budget reflects our values…if we do not want to spend in secret, then we aren’t going to budget money that would give us permission to do so.
I agree with all of these. My boyfriend’s coworker is in a situation where her husband is awful with money, so she’s opened up her own account. They own a house together and have a kid together, and they’re our age. I just can’t imagine functioning like that! My boyfriend was commenting that her husband would probably be grateful to find out there’s extra money available (if she ever tells him, I guess), which I hadn’t thought about, but I still don’t agree with it. What happened to teamwork?
One of my biggest pet peeves is when I meet with couples and the husband won’t let the wife speak. She is an equal partner in the relationship (well, she should be) regardless of whether or not she earns a salary. I have to laugh when my male colleagues express shock when a widow leaves them too, especially if they never made her feel that her thoughts and opinions mattered. It’s old school thinking but the financial world (as you well know) is still pretty old school. Great tips, Shannon. Money transparency and shared goals are definitely key to a happy marriage and have always served me well in my marriage.
I have no clue on the legality of this story, but an acquaintances parents just went through a nasty divorce and her Dad has funneled a bunch of money into some sort of protected account leaving the mother effectively broke! The mother had never paid attention to their bank accounts so didn’t notice it when money was being transferred. I can’t imagine leaving yourself so vulnerable! Communication is certainly key.
Ugifter At least you definitely have a clue what is happening, Anne. I really hate to hear or see that one half of the couple (typically the wife) doesn’t know what is going on with the finances. Even if you don’t like it, you should be aware.
Raquel@Practical Cents I see that a lot that one part of the couple feels more “entitled” to their spending than the other. The money problems or in their case money spending inequity is really just the tip of a bigger issue playing out. I hope they can work it out as well.
BusyMomBudgets Budgeting together and being in agreement is a great way of avoiding the spending without discussing issue. No matter what your budget method, if you are in a relationship, you are part of a team and you should want the team to succeed, especially financially.
JourneytoSaving So true!! Where is the teamwork? It almost seems like cheating when you open an account without the other spouse knowing. I can’t imagine that feeling good.
ShannonRyan Ha! I know, no matter how much research shows advisors the importance of including both spouses, they don’t seem to pay attention to it. No matter who “earns” the money, each spouse is equally important to the overall home and should be treated as such.
BrokeMillennial I have heard of a few situations where the husband opened accounts in the Cayman Islands and the wife never knew. Or I knew wives who “never ask” about money. I can’t imagine living in the dark like that and it could seriously blow up in your face.
I have a cousin who just got divorced and found out her husband had all kinds of credit card debt she didn’t know about. She got saddled with half of it. I do blame him, but she paid no attention to the bills and let him take care of all the finances. She didn’t even know how much the mortgage payment was! I blame her for that. In my own situation, we didn’t hide anything, but never talked about spending, and that turned out very badly. These are wonderful reminders that a relationship is a partnership on all levels, even financially.
Eyesonthedollar Ugh! That is awful for the cousin. I don’t think that enough people realize that they are responsible for half of the debt incurred while married which makes it even more important to understand what is happening. A successful partnership is all about communication and planning.
Yes money is probably the reason for most arguments, what are your thoughts on when you should start with joint accounts? After marriage? Should people still have their separate money as well?