CHAPTER 4 Your Money and Your Relationships

My husband and I were in debt, and I felt out of control because I didn’t feel like I was responsible for it. We were refinancing [the house over and over] and he was handling all the bills and sort of floundering with his career. I remember saying to my father: “I am never ever going to get out of this financial hole. Ever.” And my father said to me: “You’re the one. You are the one that is going to have to pull yourself out of this. You can do it.”

At the time I did not think it was possible. But fast-forward ten years, and I’m financially secure. When we sold the house, I used that money to pay off my half of the $100,000 credit card debt. My [now] ex-husband said to me: “Oh my God, how did you do that?” Because the way he deals with finances is vastly different than me. And I said to him, “I am never, ever going to be in financial debt again. I will never be paying the $25 a month just so I don’t have to pay the $10,000 that’s owed.” It’s probably what tore us apart.

—Anna, 50s, lawyer, Philadelphia

Money and relationships can be a volatile combination. I’m not going to overwhelm you with statistics. There are plenty that back up that statement while also confirming the fact that your financial life is inseparable from your relationships. If you are feeling stress in your primary love relationship, money is likely at the heart of it. The more tension you have around money, the more likely you are to split. And if you do break up, you’re likely to say money was a top—if not the top—cause.

That makes sense. Even if you’ve gotten a handle on your own money issues, throwing another person with their own issues into the mix changes things. As Sara, 30s, a university administrator who recently moved in with her boyfriend, explains:

We’ll go out to dinner and he orders the nice bottle of wine and three appetizers. I get nervous. We talk about buying a home. What he has in mind and what I have in mind are two different things. I don’t need to have a Gucci-whatever and drive a Lexus. That’s not important to me. [What’s important to me] is just being financially secure.

Sometimes, the differences between partners lead to meeting more or less in the middle. “I’ve always been a planner,” says Julie, 30s, a marketing analyst from Baltimore. “I’m type A. I think ahead. I plan for worst-case scenarios, so I don’t have to scramble when something comes up.” Her fiancé is the opposite. “He is a spender—an experience-first kind of guy. He works hard and he wants to treat himself.” After a little push and pull, they came to a happy medium. “He pushed me to use what I worked so hard to create, I pushed him to think a little bit ahead. I tightened his bootstraps and he loosened mine.”

But other times, these differences are more oil and water than oil and vinegar. They add a layer of complication—and stress. Angela, 50s, a financial services executive from Wisconsin, worries because her wife is very reluctant to engage with their money at all. Angela is the primary breadwinner, but she wants her spouse involved. Still, whenever the topic comes up, her wife finds other things to busy herself with. “If something happens to me”—Angela shakes her head—“she wouldn’t know what to do.” And Riki, 40s, from Arizona, says that whenever the topic of money comes up with her husband, he freaks out. “He goes from zero to panic in two seconds.” The result is that money is just not a conversation in their home. “We rarely talk about it,” she says. “Never.”

That is exactly what we’re trying to avoid.

IN THE BEGINNING

The first three chapters of this book were devoted to understanding our financial selves. But successfully incorporating another person into your life means making the effort to understand them as well.

This may not seem important in the butterflies phase of a relationship. Then, differences seem charming, quirks seem cute, and the $1,500 he spent to wire the back deck for sound (when he could have spent one-tenth of that on a portable speaker) was a demonstration of how comfortable he wanted guests to be in his home. He’s evolved, you thought, not excessive.

It’s because things are so good that we don’t establish boundaries about how finances will be handled. But over time, the glow fades. Your spouse or partner behaves in ways that you don’t agree with, and the lack of clear rules or guidelines leads to tension, stress, and arguments. “Because money is a core survival issue, when people begin to feel fearful or that they might be taken advantage of, they lash out in unconstructive, unhealthy ways with their partner,” says Deborah Price, founder of the Money Coaching Institute. And there goes the goodwill in your relationship.

These changes don’t happen overnight. They may result from the course your lives together take. Erica, 40s, a lawyer and mother of three in California, always wanted to be able to support herself fully and independently. After law school, she took a job with a salary that grew to over six figures in just a few years. She didn’t marry until she was 31 and when she did, she outearned her husband, which enabled her to amass the down payment for the house they eventually bought. “I felt comfortable and confident,” she says.

But over the last twenty years, Erica stopped working. “My husband is a financial guy,” she says. “Over time, he took over more and more of our finances [until] he’d assumed everything. And I was bothered by it. But at some point, I was busy working and then with the kids, and I just surrendered. Now, I’ve missed fifteen years and I don’t feel confident. And I wonder, could I manage it? Could I manage it as well as he does?”

Often, the evolution in our relationships is so rapid and so exciting—We’re engaged… I’m pregnant. It’s a girl!—that we forget to talk about all of the other changes that happen as a result. Then we wake up and wonder: How did I get here from there?

That’s what happened to Susan, 40s, a stay-at-home mother of two in California. “It’s complicated when you’re not contributing. There is this imbalance of power,” she says. “These tiny little financial moments, where if [my husband] feels any financial stress, he’ll take control over making the decisions because he’s the one who pays for it. And I have to push back and remind him that this is a partnership and it’s not his money solely. But the instant reaction is that it is his. And that’s scary, too.”

Susan (and the noted philosopher Avril Lavigne) are right. It is complicated.

That’s why it’s so important to understand not just that you and your partner are different, but why you’re so different. You may feel like your husband is highly reactive, Price says. But, if you don’t understand what it was like for him when he was growing up—how money was tight, for instance—you can’t figure out what’s driving his moods and outbursts today. It’s easy to see a man who flies off the handle when the topic of money comes up as a bully. The reality may be that he’s scared. “Context is very important,” she says. “Especially for couples.”

PLANNING A TIME TO TALK

If you think about communication as a continuum from total secrecy to complete transparency, many couples would be distinctly left of center. Sometimes it’s not just that we don’t want to talk about money, it’s also that we don’t know how. But if you’re not talking about your money with your partner, you’re really not talking about your life. Which is why many financial experts (and I have done this myself occasionally) suggest the concept of “money dates.”4 Some call these get-togethers money huddles or powwows or even (unfortunately) playdates. They’re all attempts to make these conversations sound so enticing that you actually have them. The more years I write about money, the more I think the words money date sound completely ridiculous.

But I’m good with the concept. My husband and I make appointments to talk about money.

Why? Because one of us—ummm, me—doesn’t really like to have them. Yes, I write and talk and communicate about money for a living and I don’t particularly like to do it with my spouse. So, I don’t expect that it’s especially easy for you, either—which is not the same as saying it’s okay to blow it off. Here’s how to do it.

FIND A SYSTEM THAT WORKS FOR YOU

What’s the best way of managing money in a relationship? Yours, mine, and ours accounts? Merging everything? Keeping everything separate? Yes. Yes. And yes. Seventy-seven percent of American couples share at least one bank account, according to Bankrate. But I firmly believe there isn’t just one right way to do this. If your system is working, it’s the right one for you.

For Christina, 30s, from Seattle, dividing conquers. She met her husband at age 18 and they’ve always kept separate finances. “I saw my parents fight about money, and it wasn’t something I wanted in my relationship,” she says. “I’ve always made a lot more than he does, so I never wanted to get into an issue of ‘I bought this’ or ‘he bought that.’ I don’t want him to be insecure about that at all.”

Maureen, 30s, a media director in LA, keeps her finances separate from her fiancé’s, too. But they divvy up the bills based on the calendar. “My fiancé gets paid at a different time than me, so I will handle money at the beginning of the month, and he picks up when he gets paid and then we even out,” she says. “It’s very fluid.”

Riki, 40s, the Arizona freelancer, merges some but not all. She watched as a friend, an older woman who had ceded control of the finances, lost her husband and was left penniless. “She assumed all those years that they had savings, they had insurance. The house wasn’t even paid off. It was harrowing to see,” she says. “We need to take care of ourselves.”

Gina, 30s, a market research consultant in North Wales, Pennsylvania, merged everything with her husband because keeping things separate got too complicated. “We were getting into fights because we didn’t know what the other person was doing. Combining everything—the bank accounts are linked—gave us complete transparency at all times.”

Transparency is also the key to financial stability for Virginia, 30s, a freelancer with an irregular income in New York. “There are points in the year where I panic because [income is] in a lull. And then six paychecks come in the next week.” Her solution: constant communication. She and her husband keep a running e-mail thread that bounces back and forth every time a paycheck lands. “And, we try to have a budget meeting every few months,” she says.

And then there’s Lindsay, 50s, a senior executive at a jewelry company in San Francisco. When she met her husband two decades ago, they chose not to merge their money. “Because he made more, he paid more. But I always felt like: ‘I’m spending this amount of money to get my eyebrows done and it’s not his business. He never needs to know.’” And that was the way it went, until they had their first child. Lindsay spent the next eight and a half years as a stay-at-home mom, not earning a penny. “My husband said, ‘Pick a number and I’ll just dump it in your bank account as if you were working. And then you just keep doing whatever you’re doing.’ So, I had an allowance—which sounds so retro—but it worked beautifully for us.” They based the number on how much Lindsay was making before she stopped working—about $2,000 a month. She paid for all the kids’ stuff, her clothes, groceries, and gas. He picked up the big stuff, the mortgage, cars, vacations. “I liked it because I never had to ask and I could plan on how I was going to use the money,” she recalls. “And even when I wasn’t earning, we had no conflict about money.”

I hope you noticed a couple of threads in these examples. First, they are all different—and yet they are all successful. Second, the system you start with may not be the one you have today or that you finish up with. Just as Gina and Lindsay have changed the ways they’ve managed money through the years, my husband and I have recently been talking about whether we’re due to switch things up.

Ours, as I mentioned, is a second marriage—for both of us. When we married, he had kids in college and was spending a lot more than I was. Today, his kids are out, mine are in, and my bills are significantly higher than his. Initially, we kept everything separate and just split up the household and other joint bills proportional to our incomes. But, eventually, that system got on my nerves. I didn’t like having to remember who paid for dinner the last time so that we could alternate. So, we got a joint credit card, opened a joint checking account (to pay that card), and started using those vehicles to pay some other household expenses as well.

The secret ingredient in making any and all of these systems work? Autonomy. As Lindsay said so perfectly, “I’m spending this amount of money to get my eyebrows done and it’s not his business. He never needs to know.” Bingo. The albatross in your spending may be your sushi habit, birthday lunches for your best friends, or something else that matters more to you than it does to the joint holder of your Visa. And vice versa.

If you can give each other breathing space—and spending freedom—while comingling all of your accounts, terrific. If you can’t, make some or all of your accounts separate or create a stash that’s specifically for autonomous spending. That’s what married financial advisors Marlow (a woman) and Chris (a man) Felton have done. A snippet of our conversation with them:

MARLOW:	We’re two individuals with two different upbringings, but we wouldn’t be able to work together cohesively as a couple if we didn’t understand what drives each other. For example, my husband has this need to be liked.
CHRIS:	No, I don’t.
MARLOW:	Yes, you do. He likes people to like him. I like people to respect me. Because of his need to be liked, I’ve seen him overspend at bars because he wants to buy everyone the round of drinks.
CHRIS:	People pleasing was a root of a lot of our challenges, I had to do certain things and to look a certain way. I had to have a certain house, a certain car. It’s an approval addiction and it’s pretty powerful. It was the root of the financial challenges I faced back in the day.
MARLOW:	Without the awareness [of his background], I get mad at Chris; Chris is frustrated because I am mad at him; and the whole thing blows up. [But I was also] tired of hiding shoes in the trunk of my car when I went to the mall. I’d wait until he was gone and bring them in the closet and hope he didn’t notice. I thought this was ridiculous, and it wasn’t going to be good for our relationship long term. I didn’t like the way it felt.

Their solution was to create what they call a “fun fund”—an equal amount of money that gets deposited into individual accounts for discretionary purposes each month. For Chris, the fun fund means if he wants to buy everyone a round of drinks, that’s fine, but he only has a certain number of dollars to do it. For Marlow, it means she can plunk her shopping bags on the counter with no second thoughts. He calls it “ingenious.” She says it’s “the most important thing” they’ve done. (P.S. It was her idea.)

And while we’re talking about autonomy hacks, I’m a fan of the arbitrary spending limit. Essentially you come up with a number—$50, $500, $5,000, $50,000, whatever makes sense based on your resources and your tolerance for giving up control—and agree that neither of you is going to spend or invest that much money without discussing it first. Discussing, by the way, doesn’t mean asking for permission, but it also doesn’t mean that you can drop it in a text and pass GO.

Then, stick with that system until you both agree to a change. This is important. Every year, usually around Valentine’s Day—because why not ruin a nice holiday involving chocolate and flowers—I receive at least one and sometimes several new studies on the topic of financial infidelity, which is when you keep secrets about money from your spouse. A 2018 version from CreditCards.com noted that one in five romantic partners has (or used to have) a credit card or bank account that their significant other doesn’t know about. This is true despite the fact that about one-third of the people currently in a relationship believe that lying in this way about money is worse than cheating physically.

If you’re among those secret keepers, it’s time to come clean. This is one of those Nixonian scenarios where the cover-up is worse than the crime. It is perfectly acceptable to a) want to have and b) actually have money that is yours alone. It’s when you’re discovered to be lying about it or telling other lies to hide its existence that you start going down the rabbit hole that can ruin your relationship.

Just think about the conclusions you might jump to if you discovered your spouse was hiding a bank account from you. The mind very quickly hurtles from good (it’s because he wants to throw me a surprise party for my 40th) to bad (maybe he has a gambling habit I don’t know about) to worse (he has another wife and three kids living in Albuquerque). Save yourself the trouble. Tell your partner that you have it. Explain why you’re keeping it. Offer him or her the option to do the same.

One more thing before we move on from this discussion of systems. Having joint bank accounts doesn’t excuse you from two accounts you must maintain individually. One is a credit card account—a bank card, not a store one—on which you are the primary cardholder. You need this because of the big Ds: Death and Divorce. If your spouse dies or you split up and you don’t already have credit in your own name, it may be tough to get it. Save yourself the trouble.

The second is a retirement account. Not having one means you’re leaving valuable tax breaks on the table. More importantly, having stocks, bonds, and other investments of your own makes it much more likely that you’ll be interested in—one could even say invested in—managing them.

BRINGING IN HELP IF YOU NEED IT

Perhaps you’ve been nodding along through this chapter thinking: I can try that. But maybe you’re thinking: Yeah, and when I wake up tomorrow I’ll have skin like Salma Hayek’s and Keith Urban in my bed. If you’re in the latter category, you may decide you need professional help. That’s the conclusion Ashley, 40s, a therapist from California, came to:

My husband has very strong opinions about the economy and where it’s headed. He believes that everything is going to go to hell in a handbasket. I’ve always taken this backseat. I figured: I’ll let him do it. He’s smart. I also realized he has this psychology around money that’s very powerful. And I wasn’t willing to challenge him on it. Yes, I was busy raising children and going to graduate school, but those are just excuses. Finally, I become more of an adult and tried to step up, and it’s been a big issue in our marriage. The tension around it. The power dynamic. I felt very powerless, like I should defer to him. So, I decided I need someone who can help me talk to him. I hired this financial/business coach, she’s kind of like a therapist. She keeps me accountable and lets me cry on the phone. We meet every month and she’s helped me get my arms around my business and my personal life, too.

Hiring help to iron out the financial kinks (for lack of a better word) in your relationship is not anything to feel embarrassed about or blame yourself for. If you want to place blame, send it society’s way. We’ve got decades of an ingrained cultural dynamic where men are taught the road to respect is to assert their independence, while women get the message that it comes through supporting others. If you can’t get yourself to step up, a financial advisor or a therapist can be hugely helpful.

Carol, 60s, a recent retiree from North Carolina, says she and her husband have utilized one for years. Carol never really enjoyed or felt comfortable in financial conversations—but she didn’t want to dig her head in the sand, either. Involving their advisor in their interactions—essentially talking “through” the advisor—has enabled her and her husband of almost twenty years to manage their money more calmly and rationally. “The fact that he’s a neutral third party takes the emotion out of it.” And that, as Martha Stewart would say, is a very good thing.

MONEY COMPLICATES OTHER RELATIONSHIPS, TOO

When we talk about relationships, our significant others get a lot of airtime, with family running a close second. Yet, it’s our friendships that have the best chance of improving our health and happiness throughout our adult lifetimes, a 2017 study from Michigan State University found. And money has the ability to do a number on those as well. Nearly half of consumers say money is a cause of friendship stress, according to a Bank of America survey. That stress comes as much or more from inside us—and how we react to what’s happening in the lives of our friends—than it does from the interactions between us.

It happens when you’re the one with less money. “When all my friends started buying houses, I felt like we were behind,” says Julie, 30s, the marketing analyst from Baltimore. “There was a point where every other day someone on social media was posting a house with a SOLD sign out front. I started thinking that maybe I should be buying a house.”

But it also happens when you’re the one with more. Leisa Peterson and her husband became real estate millionaires in their 30s. Once they had the money, they felt they had to live a life that showed their success—so they built a house that was bigger and grander than anyone else in their social set had at the time. When they moved in, everything changed. “People felt uncomfortable,” says Peterson, who now (not coincidentally) works as a money coach. “They treated us differently when they came for dinner. I remember thinking, ‘Oh my gosh what have we done?’ We hadn’t changed and I assumed that everyone knew we hadn’t changed, but people didn’t come back. It was heartbreaking.” Eventually the couple made new friends with people who hadn’t known them before the house. But, Peterson still says, “My life fell apart when I got all that money.”

And sometimes it even happens when you think a friend has more or less, even when in reality they don’t. Money coach Emily Shutt spent years working in consulting before opening her practice. She was earning a nice salary but was still not keeping up with her friends who were buying cars and taking splashy vacations. “I had one friend who ordered a custom BMW,” Shutt remembers. “She tracked it as it shipped over from Germany. I thought she must have been making so much money because there was no way I could afford that car.” Months after the car arrived, the friend mentioned how she hoped to earn $70,000 that year. Shutt was floored. “I realized that I had, for years, been earning more money than her,” she says. “We were just seeing money very differently.”

EXERCISE 5

KEEP YOUR FINANCES FROM MESSING UP YOUR FRIENDSHIPS

• Accept your reality. When you chose your career path, you did it knowing what the income trajectory would likely be. Your friends did the same. It’s not fair—or healthy—to blame the surgeon who spent four years in med school and eight in residency for the fact that she has a bigger house. Similarly, if you’re the surgeon, there’s a line between treating your writer best friend once in a while and becoming patronizing.

• It’s easier if you can open up a bit. Four in five women say they’ve refrained from talking about money with someone they’re close with, according to Fidelity research. Half say it’s too personal. A third say it’s uncomfortable. They’re right. But if you can get over the hurdle, it encourages others to do the same with you. Figuring out what your financial goals are and then sharing them with the people closest to you allows you to gracefully back away from the pricey group vacation. Opening the door as to why you’re saying no allows your friends to accept it.

• Embrace the “Imperial We.” As you plan—and before you go to—events, have an active discussion, putting the emphasis on the group. Where do we want to go? How much do we want to spend? Do we think it’s worth it?

Finally, know that all friendships aren’t going to last—but the ones that do will be better ones. Statistically, women increase their numbers of friends through age 25, then we pare back—but in favor of fewer, higher quality relationships, according to researchers in Finland and the UK. So be consistent with the people that matter most to you. And focus on what you still have in common rather than focusing on the differences.