“Money, money, money,
Must be funny
In the rich man’s world” – ABBA.
Growing up, ABBA may have been one of the most played LP’s in my house. I have memories of my mother singing just that short part of the song often. Whether for fun, at a time of money worries, or when I asked for spending money. Born and raised in Peru, I have seen the opposite ends of the spectrum of money and wealth, and everything in between. The first years of my life we lived under a military dictatorship when often store shelves were empty, and shortages created much angst. My pre-teen years ushered in a democratic government and the opening of the Peruvian markets to more imported goods than imaginable. The lure of have, and then have more, was never stronger. The open market brought about inflation at staggering levels where the Peruvian currency had to be changed several times because there was not enough space for all the zeros being added. During my teen years, nearly every corner had mobs of men with calculators that would sell you US dollars – the only way to not have the value of your paycheck diminish every minute of every day, and unable to keep you going through the month.
Money was a worry, spending wisely a priority.
From afar I always saw the US as the land of opportunity. I came here to college on a student visa, moved to a work visa after graduation, and eventually a green card. In 2005 I emotionally swore allegiance to the United States of America and became a citizen of what is home to my family and me. Despite the lessons of my early years, I came to the US and naively expected things to be different – I had a warped expectation of the power of a dollar and the cost of opportunity.
Despite the abundance of wealth and opportunity for wealth, money struggles in this country are real. The stress of money on marriages and families is real. The sense of never enough is rampant as we so easily confuse needs and wants. Money is a driver of decisions in our lives every single day. We believe that it is “always sunny in the rich man’s world.” We scoff at cliches that keep telling us “Money doesn’t buy happiness,” as ABBA continues to sing, “All the things I could do if I had a little money……win a fortune in a game, my life will never be the same”.
Truth is that money can change our lives. But our lives won’t change if we don’t change how we see and manage money. Many of us shake our heads when we hear of lottery winners, athletes, and celebrities that squandered their fortunes. We would never do that – right?! Sadly, most of us actually do that every day on a smaller scale. Money is believed to be the leading cause of divorce in our country, and the more money a household makes, the more likely they are to cite money issues as a reason for divorce.
Money doesn’t buy happiness, but managing money will. Really!
Successful relationships require commitment, dedication, purpose, and communication. This applies to marriages and money in marriages. It is necessary, in my humble opinion, to work through other challenge areas before you can talk about money. If you aren’t in a good place, you will fight about money when you are really fighting about other areas of frustration in the relationship. Passing the buck to the buck!
John and I share many of the same values for ourselves and our family. We believed that sharing those would mean we got to skip the “Go to Jail” spot on the Monopoly board of life. We were wrong. Money has been a stress on our relationship. We were so convinced we were on the same page, that we failed to recognize our difference and how those differences led to behaviors we didn’t appreciate about each other. We didn’t know how to talk about these issues, so instead argued or avoided conversation. John would share with you that when I reach a point of complete frustration I will shut down, spit out “FINE!”, and walk away in a rage. I would add that I walk away because I feel that John just wants to convince me of his way without actually listening to me. It was so bad that I tensed up when John would tell me he was going to work on the budget, and my eye would twitch if I saw him walking towards me with a receipt to ask a question. I was always frustrated that he seemed to be consistently 6 months behind on the budget, and therefore unable to give me the information I needed to make a money decision today, which in turn would lead to an argument tomorrow.
Are we perfect now? No! But, we have come a long way because we refused to let money be the reason we tore our family apart. It has taken time, effort, and willingness to give up control to get us to where we are today. I accept that John has knowledge about finances and investments that I just don’t have and aren’t important to me to spend the time learning. John has agreed that I can implement and manage budgeting processes far more efficiently and effectively – our budget is now current so that we can make decisions with facts.
I know I said managing money will bring you happiness, but here are the things you need to do before you even think about sitting down and having a “come to Jesus” meeting on money.
- Recognize your differences. This step is the broadest and hardest, but also the most essential to establishing a necessary foundation to move forward. The benefits will pay off well beyond your ability to work together on finances. Each partner must be willing to not only be honest but to also honor the honesty and vulnerability of the other for sharing.
- Know your money backgrounds – share what you remember about money as a child growing up, how was it managed in your families, how did money make you feel when a child, did you worry or feel safe financially? All these early year experiences shape us as adults.
- Know your good and bad spending habits – You are part of the problem – just accept that. We all have good and bad spending habits. This step requires acknowledging yours, not seeking them out in your spouse.
- Know your spouse’s strengths and weaknesses – You must be vulnerable in sharing your good and bad habits so that together you can overcome weakness, and play to your strengths. In this case, the actual power is in working together.
- Know the emotional aspect of money – It is simple to say men and women see money differently. While that is true, our emotional relationship with money is shaped by the items discussed above. Know and share how money makes you feel, and respect how it makes your spouse feel. Whether you understand or not is irrelevant, it is real to your spouse, and you should not try to change them.
- Dream together. Sharing dreams as a family and couple are essential to being able to work together to accomplish them. This doesn’t mean you don’t get to have your own dreams, but if you don’t have shared dreams you will consistently see your spouse as a hindrance or obstacle to be overcome.
- Turn your dreams into short and long term goals. A dream becomes a goal when you put a plan to it. Be honest about your current situation. Your first goals should always to be:
- Establish a goal to get out of debt – discuss your debt and prioritize how to eliminate it.
- Establish a goal to save an emergency fund – unplanned situations are a fact of life, discuss how much money to keep in a savings account to ease the stress of emergencies.
- Once you’ve done the two above, have fun as you establish goals to reach your dreams – put down the need for instant gratification that often means debt, but instead set realistic goals to put money aside to achieve those dreams. Don’t spend what you don’t have!
- Create your spending plan strategy together.
- Determine roles and responsibilities – knowing your strengths and weakness establish who will do each part of managing your finances and discuss the expectations for those roles. Also, determine how you will resolve conflicts or disagreements that come up in creating your spending plan.
- Plan how to avoid the pitfall of bad habits and mistakes made in the past – know how you will handle it if the situation comes up again.
- Manage your money like you manage your time – just as you manage your time with one or more tools like a paper planner, shared electronic calendars, and event reminders; determine what tools you will use for managing your spending plan and how each of you can access it.
- Commit to talking.
- Plan to discuss the budget at least once a month – this includes your current month and then looking ahead for events or changes that need to be planned out. Schedule the meeting on your calendar.
- Agree to make significant spending decisions together before any purchases – when it comes to building your confidence and partnership, spend now and ask for forgiveness later will not work.
- Give each other grace – sometimes this is hard if money is naturally a stress inducer. Know that the differences you identified above will continue to impact your conversations. Each of you needs to be flexible and give the other grace.
We’ve all heard one must never build a house on the sandy ground. A home should always be built on strong and stable soil. A well-built home will protect those inside while weathering the sunny days and stormy nights. So too does a spending plan built on stable and robust communication. A well-built spending plan will protect and bring peace to you and your family whether you are weathering the storms of life or enjoying the sunny seasons – together.
xoxo
Catherine