Synopsis: Reconciling differing money values in a relationship

Financial goal setting for some couples can be challenging especially when two people have different value systems.  An example of this would be John and Mary’s situation. 

John grew up in a family where lack of money was always an issue.  He watched his parents work hard to support their family and still there never seemed to be enough money.  John worked his way through college and law school.  He is now a well paid attorney.

Mary grew up in a family where money was never an issue.  She lived a comfortable lifestyle and got her first job after she graduated from college.   Mary was used to shopping and not paying much attention to price tags because anytime she needed more money above what she earned she could count on her parents to help her out.  After marrying John, Mary’s parents continue to gift money to them annually.

Even though John now earns a good income his value system is about saving money for future security.  Mary has never experienced the lack of money.  Her value system is about enjoying life today without worrying about the future. 

Here are some steps John and Mary can take to try to get on the same page with short-term and long-term financial goals.

Step 1:   Have a discussion about each others perceptions, feelings and beliefs of how money should be spent.  This is not a time to resolve issues about money but a time to try to understand each other’s view points.  The outcome from this discussion is not necessarily to see eye to eye on everything, but to start looking at some compromises that will lead to mutually beneficial goals.

Tip:   When these discussions focus solely on financial matters and become a debate over who is right and who is wrong the outcome can be hurtful without much progress.  Instead start with “soul-to-soul” questions* that focus on individual and mutual benefits such as:
“What work do you both want to do to bring your talents forth?”
 “How do you like to take are of yourself—exercising or yoga, perhaps?”
 “How do you like to take care of each other?”
 “What activities are healthy and nourishing for your family?”
 “What makes life simpler and less burdensome?”
 
Step 2:  Either together or with the help of a financial professional take the time to create a spending plan that incorporates the compromises and goals decided on in step one.  The purpose of the spending plan is to give both spouses/partners a clear picture of what it will take to meet their goals and satisfy each others values.

Tip:  Plan for a full year and include periodic fixed expenses such as property taxes, insurance premiums as well as periodic discretionary expenses such as vacations and home improvements.

Step 3:  Decide who is going to oversee day to day money management which will include tracking expenses and income onto the spending plan and paying bills.  Decide on how many checking accounts.  Will there be three, “his, hers and ours” or one joint account?  Decide on what is a major expenditure.  Once the amount is clarified, then each spouse/partner should let the other know before making such a purchase.

Tip:   Tracking expenses can be done together but seems to work best when one partner is willing to do the tracking and the other partner agrees to regularly place their receipts in a file or box.

Step 4:  Set up a regular time to meet once or twice a month to review the spending plan and talk about ways to handle upcoming financial issues.

Tip:   In addition to the time to review the spending plan together there will be financial topics that come up regularly.  Some couples that have been successful with using email to help with money conversations.  This gives each other time to read, reflect and then respond. 

Each of the above steps are important but unless you have the discussion (Step 1) and formulate financial goals that meet the needs and dreams of both spouses/partners it will be difficult to stay committed to steps 2, 3, and 4.

*The “soul-to-soul” questions are quoted from the book, Women, Men & Money written by William Francis Devine, Jr.