My partner and I come from diferent financial backgrounds, and this causes friction. How can we achieve harmony when it comes to money issues? -- Jennifer L., Los Angeles, CA
It's great that you want to work toward financial harmony, even though you approach money matters differently. Disagreements about finances are the number-one cause of divorce in the United States, says Debby Fowles, an accountant and author of "Everything Personal Finance in Your 20s and 30s." And it's spending -- not debt or borrowing concerns -- that couples argue about most frequently, according to a 2005 poll by Investors Group in Winnipeg, Canada.
To better understand each other, consider the origins of your attitudes toward money. How did your financial situations growing up influence your current outlook? Consider both your actual circumstances (whether your family lived comfortably or paycheck-to-paycheck) as well as any parental messages you received ("We can't afford that" versus "We'll just put it on the credit card"). By discussing your past, you'll begin to see where your "financial baggage" may collide. You'll also identify areas where you share similar feelings. You may both fear losing money, for instance, or feel a need to be generous with it, or worry that you don't know how to handle it at all -- regardless of how much or little your families had.
Next, sit down and talk about your current feelings about money and what it evokes for each of you. Do you love to spend it, or do you find it hard to buy anything beyond the necessities? Are you good at managing money, or are you afraid of it to the point of not even wanting to balance your checkbook? Does thinking about money sap your energy, or do you think of it as a force for making good things happen, in your life and for others? Have this heart-to-heart discussion now, and you'll create common ground to start building a financial plan together for the future. When it comes time to identify your financial goals, start with what's important to both of you -- education, a comfortable retirement, a travel budget, or helping to preserve the environment, for example. Then list the long-term financial targets that spring from those values, which could include saving for your child's college education, building a retirement fund, going on that safari you've always dreamed of, or investing in ecofriendly companies. In addition, think about and list the short-term goals you'll want to achieve sooner rather than later -- updating the furniture in your living room, buying a car, or contributing to your favorite causes.
Once you've agreed on a financial vision, you are ready to make it happen. Make the process easier with a financial adviser who can help both of you create a financial plan that allocates for necessities, savings, fun, and philanthropy -- as well as increase your savings and investments. Here's your chance to celebrate your differences. If one of you is a saver and the other a spender, for example, create a budget that allows for both. The bargain hunter may want to take charge of shopping for common household items, such as food and cleaning products. If one of you is more interested in environmental issues, the Earth-minded one can explore how going green can save you money, such as making your home more energy efficient to reduce your energy bill. As you learn from one another, your differences become assets.
Touch base with your partner regularly on your finances. Being open and supportive will go a long way toward a healthy and happy relationship.
Text by Tracey Fernandez Rysavy