According to a survey done last year for the American Institute of Certified Public Accountants (CPAs), 27 percent of couples married or living together said money issues were likely to lead to an argument, more than other topics such as children, chores or work. A primary reason behind the arguments is a lack of communication, the survey found. “Communication is important. If you can communicate effectively about money, there are less chances of misunderstandings, or at least you may understand where the other person is coming from,” says Tracy Stewart, who serves on the AICPA’s National CPA Financial Literacy Commission. So what’s the best way to talk about finances with your significant other?
Know Your Money Personalities
The first step is to understand each other’s attitude toward money, say Bethany and Scott Palmer, authors of “The 5 Money Personalities: Speaking the Same Love and Money Language.” The Palmers have identified five money personalities. You may, for example, be a spender or a saver, a risk taker or a security seeker. Knowing those attitudes — the Palmers say we each have a primary and secondary money trait — can help diffuse conflict down the road.
“If you don’t recognize where the other person is coming from, that’s where the nitpicking and nagging starts,” Bethany said. What if you discover you and your significant other have different attitudes toward saving and spending? It doesn’t necessarily mean you have to call things off. In fact, of the nearly 3,000 couples the Palmers have worked with, 80 per cent to 90 per cent have opposite personalities, Scott said. The key is to “go into the marriage with eyes wide open,” he said. “You will do so much better.”
Create Your Own Plan
Once you’ve done the homework, you can begin to put together a plan for managing your money as a married couple. But keep this in mind: there is no one right way of doing it. Your money habits and financial circumstances are as unique as your relationship. Couples tend to have more success in their discussion about money when they focus on getting to know each other better, not trying to conform to a certain view. “Think about these things not as right or wrong, your way and my way,” Gregory Kuhlman said, “but how do we do this as a team.”