In that conversation when you checked whether your beloved is an “Aquarius” or “Pisces” you’d have done well to learn how your money “signs” matched, too.
Money differences have real consequences.
South Dakota financial planner Rick Kahler, an expert on the psychology of money, tells the story of a penny-pinching wife married to a big spender who was also self-employed. Whenever he was paid, she put aside money into an account earmarked for taxes, with his permission. But her husband liked to dip into the account to splurge on gifts for their kids. Every year, they ended up borrowing from a bank to pay his taxes and the loan, with interest, became part of theirbudget. The wife, meanwhile, obsessed over every extra dime spent on food, gas and other ordinary expenses.
They came to Kahler for help. Convincing the man not to touch the tax kitty took five years and much talking, Kahler says. “I recommend that couples with these issues find a financial planner or therapist who is clued into the emotional side of money,” he says. “Overspending and scrimping come from ideas about money we pick up by about the age of 10.”
When Kahler was eight, for example, his mother used to talk about the family going broke. He became an “extreme saver” who “went comatose” whenever the stock market dropped or he had a bad month for earnings, fearing that the end was near. He couldn’t bear to spend money on a vacation though he could well afford one. Now, after years of his own therapy, he’s visited Spain, Italy and Asia within a year.
Kahler says he needed to take himself through the steps in “A Christmas Carol.” Scrooge has to face his past, see how it affects his present, and then imagine his future if he doesn’t change. Start by recognizing your money personality, and if you’re extreme enough to need change. The easiest way to identify a problem is to “ask your spouse,” Kahler says.
Don't count on your partner adopting your money ways just because you're together.
"A lot of people have the fantasy that marriage will change their partner," notes California psychotherapist Margaret Cochran, who often works with couples. "It won’t. I know a girl who was madly in love with a man who liked to go to Vegas with his friends to drink. She thought that once they got married he would settle down.
Six months after the wedding, she found phone calls on his cell phone from collection agencies and discovered that he was a gambler with a big debt. The only reason her house wasn’t at risk was because she hadn’t changed the title yet to add him.
Here are some common money personalities:
Spenders are fun to be around, unless you’re married to one who goes overboard. Generous and impulsive, they live for today, don’t worry about the future and end up with too much stuff — as well as debt or no savings.
Second-guessers like to spend and regret it afterwards. They may still overspend next time.
Planners are people who build habits that let them live comfortably within their means, and save for emergencies and the future.
Cheapskates scrimp on tips, presents and essential purchases and repairs. They’ll live with an old car that constantly needs repair even though they can afford a new one or tolerate a leaky ceiling. They also tend to be extreme savers.
Here are some tips for overspenders:
- Pay only in cash.
- Set up automatic paycheck deductions for retirement savings that increase with your income.
- Arrange automatic payments for credit card payments.
What should you do if your partner has debt? You can't count on finding a debt-free spouse these days, especially if you're in your twenties. In a recent PNC Bank survey of people in their 20s with at least some college, 60 percent said their debt was stressing them out. Nearly 40 percent reported holding credit card debt, which came to $4,600, on average. Among respondents ages 28 and 29, the average debt load was a whopping $78,000.
Cochran advises couples with credit card debt to go cold turkey on their plastic. " It’s good to have a credit card with no balance for an emergency, but you keep it in a drawer, not in your wallet, and you only make joint decisions to use it."
The spouse who doesn't have the debt problem may think it's okay to use plastic. But Cochran thinks to be "married, body, soul and spirit, you take stuff on together," including the debt issue. If you're considering a committment to someone with a debt issue, you might ask them to see a financial adviser or therapist before you move in or marry. You need to be sure you understand the source of the problem.
"It may be a gambling problem, or compulsive spending, or even other relationships. I know of a guy who sent his mistress a gift from Tiffany’s on his wedding day," Cochran says.
If you're the one with the debt, you may be tempted to hide it. That's a mistake. As Cochran points out, you need to see how your honey responds. "You may find that the person you’re marrying is a financial bully. He says, “I make more money than you, so I make the decisions.” If you know about this ahead of time, you may decide it’s not a good relationship. Sometimes the partner who has more debt can feel trapped and the other person regularly reminds him of that. It can get ugly," she says.
So talk to your honey about money and resolve to solve any problems together. If you can cooperate in this essential area, you'll feel closer and stronger as a team, and you'll truly be taking care of yourselves and each other.
Portions of this article previously appeared on DimeSpring.
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