April 23, 2009 -- If love and marriage go together like a horse and carriage, then money may be the carriage's driver. Finances play a huge role in relationships and sometimes can serve as a catalyst for a breakup.
Learning to talk about money not only can improve financial intimacy, but also salvage a relationship.
Bethany and Scott Palmer bill themselves as "the money couple" and offer tips on how to balance money and marriage. Click here to read an excerpt from their book, "First Comes Love, Then Comes Money: A Couple's Guide to Financial Communication" and check out their tips for improving your financial communication below.
Why Financial Intimacy Is Important
We see a lot of connection between what happens with your finances and what happens in your bedroom, the romance in your marriage. If you're financially communicating, then you are able to dream as a couple and to feel secure and think about the future you want. It brings you closer together in every way.
The romance in your relationship, the connectedness in your relationship and how you will deal with money as a couple are intertwined -- and there's no separating them.
Three Keys for Successful Communication
There are three keys for successful financial communications.
Fighting Fair: That's knowing how and when to argue. You must learn how to resolve your conflicts in a way that will bring you together, not further damage your relationship.
In most relationships, we don't know how to fight. When it comes to fighting fair about money, we need to lay down rules and learn how to do it in a way that brings us closer together, instead of causing more damage.
How do you do that? Have a cooling off period. There has to be an opportunity to walk away from an argument if it becomes too heated.
Also, know that there must be some kind of compromise. It can't be one way or the other. For example, a lot of people have the very good goal of getting out of debt. But if you do it by spending no money on anything enjoyable -- no vacations ever, no new clothes, ever -- then you can wind up hating each other. So you learn how to find some common ground and pay off the debt without losing your lives.
The Money Dump: It's an opportunity for each partner to lay out their cares and concerns in order to get on the same page about their finances.
This means dumping everything out onto the table -- all the pros and cons of your relationship when it comes to money. You can do it separately or you can do it together. Doing it together can be trickier because there's usually the financial person in the family who has taken control of the finances and they may end up taking control of the money dump, too.
The Money Huddle: This is a regular meeting time to talk through financial issues. It is more than a conversation; it's a date, a business dinner and a brainstorming session.
It must be started on a positive note, so go over your successes, and make sure to use this time for goal setting and the chance to dream together again. You started your relationship with dreams and hopes, and you can get back to that place if you put your relationship first.
That's a regular time that you get together to go over your finances. For some couples, if your money situation is very bad, that means getting together once a week. For others, it's twice a month or once a month. You figure what's best for you as a couple.
There's no set rule. But once you get started and you meet up regularly for a money huddle, you can keep everything on track and running smoothly.
Remember, successful financial relationships also include room for failure and mistakes. You must let go of hurt and anger and use these three tools to build better financial communication.
The Five Money Personalities
The key is that there's no good or bad money personality. Each has its pros and cons. Each has strengths and weaknesses. It's just who we are. And most of us are a combination of the profiles, not just one.
The saver is the "penny saved, penny earned" type who gets a rush from saving money and avoids credit card debt. This person is organized and doesn't spend impulsively. He has his money in a savings account and then has an emergency account as a backup.
The spender lives in the moment and loves to buy for others. He gets a thrill from the act of buying.
The spender usually has some credit card debt and once he receives his paycheck it will be spent on something. The spender is always thinking about what to buy or do with his money next.
The Risk Taker
The risk taker is excited by possibilities and loves finding the next adventure. This person listens to his gut and is decisive.
The Security Seeker
The security seeker is trustworthy and is willing to sacrifice. He also is prepared for anything because he craves security. His initial reaction is that he wants to be safe. This person likely invests money in CDs and in the bank.
The flyer is the person who flies by the seat of his pants. He is focused on relationships and is happy to let others handle the finances.
Why It Matters
Once you know your husband's or wife's money personality, you understand your differences, and can understand why you're not communicating well about your finances. You've identified each other's styles and personalities, and can get started on talking about how you can make them work together.