Think Inc.
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Money talks

The challenge is to
keep from yelling

By Mary Kelly

I often tell my personal finance classes there are three very important things many of us do in life for which we are largely unprepared. We get married or engaged in long-term relationships, we have children, and we manage our money. This article addresses the first and the third of these important facets of our lives.

Couples often have difficulty talking openly with each other about money. There are some valid reasons why calm, rational, mutually agreeable money discussions are uncommon. Most of us were never taught to sit down with a pile of bills, the checkbook and the budget and happily discuss our income and spending for the month over an evening cocktail. We, as a norm, grew up without any type of money education. Far more customary, we learned discussions on money were forbidden or private because 1) there was never enough of it, 2) children were sheltered from such issues, 3) and if we did happen to overhear our parents talk about money, our neighbors usually heard it too.

Arguments over money are often cited as the number one reason for marital discord in America. Couples need to find a way to agree on mutual and independent goals, as well as methods for allocating their combined resources, to alleviate possible misunderstandings and financial shortfalls. Achieving the desired communication skills to handle household finances is conducive to both family stability and mutual success.

Understanding that all relationships have two types of money manager traits is critical. Whenever you put two people in a room and analyze their money habits, one tends to be the spender (in economic terms, a person that has a higher propensity to consume) and the other is going to be more of a saver (a person with a higher propensity to build a nest egg or plan for the future).

Even when the differentials are slight, there is a difference. If you are honest with yourself, you know who you are. Additionally, everyone has different ideas on why they work, determinations on needs versus wants and what will be required for the future. Disagreements on any of this can create disharmony.

For many reasons, not covered here, men and women also perceive spending money, the act, in different ways. As a very generic rule, men are hunter-shoppers. They pursue the item in question as prey to be caught and conquered as efficiently as possible. When a man wants to buy a pair of jeans he goes to the store where they sell jeans, finds his size, and leaves with the jeans. Men tend to not comparison shop as much as women. Men don't see the need to look in every store in the mall for a pair of jeans just to compare prices. They, simply hunt, find and capture. They are very focused and find absolutely no entertainment value in window shopping.

Women, on the other hand, are anthropologically more predisposed toward gatherer-shopping, much like gathering herbs and vegetables from a garden. Pick up one thing, examine it, carry it around and replace it with something else.

Women are more leisurely shoppers. They like to maximize their "market basket" by finding the best deals. Women will price check every pair of jeans in the mall to save $1.99 and feel victorious about the savings, even though it cost them two hours. Women need to realize that men dread sitting in the chairs outside dressing rooms dutifully holding purses while their companions make absolutely sure they are getting the best bargain.

Men are confused about why women cannot enjoy that quick post-purchase bliss at home in front of a big screen watching sports.

These approaches to shopping mean women are more drawn to more frequent bargain items, while men are more prone to fewer but larger purchases.

A woman almost never surprises her spouse with a new car, while men rarely brag to their friends about the sale price of a new outfit.

So now we know that all relationships traditionally have a spender and a saver (no matter how slight the difference is), as well as gender shopping tendencies that can create a potential for miscommunication. The following are some strategies that can be used to get a handle on where the money goes in a cordial, civilized manner.

Month One (Pennies a Day): Many couples benefit from a game called pennies a day. Every evening, each partner writes down all expenditures for the day, down to each penny. Just for the first month, neither partner should be allowed to comment or disparage the $178 spent on new dog toys or the $235 spent on golf. For the first month there is merely observation. Having to confess to the $4 mocha latte venti and the $80-a-week-for-new-shoes habit shows individual trends that can usually be rectified by mere observation and self-discipline.

This is the month to become aware of personal monetary tendencies and teach partners not to criticize each other's expenditures. Once couples learn to honestly share what they spend money on without fear of being chastised, the road will be paved to get to the next stage.

Month Two: During the second month, the couple agrees to spend on only what they need to survive. (Yes, I do mean for the whole month.) Wants should be ignored during this period in its entirety. I try to encourage couples using this system to spend only on the absolute necessities, e.g. food, gas, etc. March is a great month for this exercise since there are no major spending holidays. This month is to show couples what they can save when they curtail all needless spending. (Note: There maybe expenditures one partner thinks are a need and the other sees as a want. These purchases should be discussed calmly and with a goal of agreeing what is necessary and what is not). The first two months are extremely beneficial to the road to success because they raise the level of awareness allowing the couple to better prepare and plan their finances.

Month Three: At the start of the third month, couples are generally able to look more objectively at how purchases are made, the categories those items fall into, where they can comfortably cut back and where they can save. Now is the time to develop categories based on the past few months and decide together how much money is going toward various categories.

Charge it: Another method is to have couples carry virtually no cash and instead, put every purchase on a credit card. At the end of the month, go over purchases line by line, record the expenses by category, and determine what category needs more or less attention. While this works best with Month One with the Pennies Day method (to reinforce the daily accountability), it can also be valuable to show where the outflow of funds go in a hurry.

Find the debt: Another strategy is to gather up all of your bills, add them up and write the total amount on the kitchen calendar. Repeat this at the end of every month to get debt reduced to zero. For many people, simply having that amount on the calendar and seeing the debt amount drop every month is a good motivator.

Set a goal: Sometimes having a goal -- such as saving for a vacation or a down payment on a house -- can motivate couples to be more conscious about their spending. They can balance the desire of ritual luncheons out with friends versus the new car that constantly seems to be out of their financial reach. Once a want is a priority for both people in a relationship and they are working cooperatively toward that goal, the more likely they are to be conscious of frivolous spending.

Oh and before you start, here are a few suggested rules you should use when discussing money at home:

1) Be honest about expenditures. If you jointly decide that you each get $20 a week for play, write it down as a category.

2) No yelling! When the decibel level increases, the communication efficiency decreases. So if one person gets excited, agree to postpone the discussion until both people will be calm.

3) Be equal in making decisions. No, not on every little purchase, but be in agreement on how to approach money management. Having one spouse say "You do everything" doesn't count as equal.

4) Learn more. David Chilton's "The Wealthy Barber" is about $14 at Borders and is a book that I highly recommend for all couples to read together. It reads like a novel and can be quickly applied. Other good sources are Eric Tyson's "Personal Finance for Dummies" and Mary Sprouse's "If I'm so Smart, Why Aren't I Rich?"

Enjoy yourself: People work for money so they can enjoy life to its fullest. So if you only use money as a source of argument, why bother? The income you earn should be enjoyed as much as possible. This does not mean spending it without thought to why you are spending or exactly what you are spending it on. The economic concept of scarcity is evident -- we cannot satisfy all of our wants at zero costs, but many couples don't discuss what it is they can't afford. As a couple, you can have anything you want; you just can't have every thing you want, so set a goal and save for it.

Money should be enjoyed. Regular money talks should be part of the communication that brings people closer as they achieve common goals. Have fun!

Mary Kelly is an instructor of economics at Hawaii Pacific University. She can be reached at

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