There was a good piece in this month’s edition of Financial Advisor magazine written by Roy Diliberto about couples and how they deal with money. It’s no secret that an inability to discuss and understand attitudes about money causes many relationships to ultimately fall apart. The reason has nothing to do with the inherent property of money which is simply an object which helps us obtain things and acts as an exchange agent for goods and services. The more important focus is on one’s personal relationship with money, often dating back to their childhoods. Think about yourself for a minute—how was money introduced to you as a child and how have those attitudes and feelings shaped your relationship with money today? The classic example would be depression era parents who watched much of their savings disappear in the 1930’s. That sort of experience lasts a lifetime and more than likely impacts the way future generations are raised. If you grew up watching your Dad stash cash under the mattress and perhaps make you feel guilty about spending, you may pass some of those qualities down to your kids. However, if you grew up in a financially comfortable surrounding you may have been taught not to focus or discuss money, rather to focus on personal enrichment and building strong relationships with your peers. Perhaps money then becomes more of an afterthought for you and not on the forefront of your mind. Neither attitude is right or wrong: just different. The problems arise when these childhood experiences aren’t properly disclosed or discussed with those who matter.
In Diliberto’s article he encourages financial planners to incorporate some of the questions therapists often ask couples who are having financial issues. Some of those questions are:
• What are your earliest memories about money?
• What are your best and worst memories?
• Was money discussed at the dinner table? If so, in what way?
• What financial expectations did your parents and grandparents have about you?
• What do you hope to do differently from your parents when it comes to teaching attitudes about money to your own children? What would you hope to do the same?
The answers to these questions are undoubtedly very telling. They can also teach an advisor a lot about a clients’ tolerance for risk and investment objectives, perhaps even more than the client even knows about themselves. If there are significant differences to the above questions between couples, it’s good to have them discuss it openly, perhaps with the advisor in the room, maybe without. Building an investment portfolio and doing a budget worksheet will become easier as a result.
Financial advisors certainly aren’t therapists, but given the statistics about how often money causes the demise of relationships, they can have a very big impact on a couple’s relationship. And couples are often surprised that given the thousands of conversations they will have with their spouse, early attitudes about money aren’t one of them.
Another interesting statistic in the article: 71% of Americans admit to keeping secrets or lying to spouses about their money. This often includes having more or less money than your spouse believes, or intentionally creating confusion about that. We don’t know why so many people choose to lie about money—that could involve deeper issues than I care to discuss in this article, be we do know that a lack of communication is the root for many of these financial disputes.
Be open and honest with your spouse about money if you can. It may save you stress (and money) down the road.
As always, feel free to reach me with any questions or comments.
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