Call it the pocketbook war.
“My husband spends a fortune on cars,” she says.
“My wife never stops shopping. Look at these credit card bills,” he laments.
Financial advisers often hear these complaints. What happens in many homes is two otherwise responsible adults who are both making good salaries have finances are a wreck. They realize that, after years of marriage, they have little net worth and lots of debt.
Many advisers say it’s because couples never come to an agreement on money.
“In every family, there seems to be a spender and a saver, a risk taker and a risk avoider,” says Lewis J. Altfest, a Manhattan-based adviser who says he has had to resolve many money disputes between couples. Altfest asks couples to compromise on money — if they don’t, the disputes could lead to divorce.
Other times, couples approach money management by ignoring the subject — that is, until it can’t be ignored, advisers say.
Sometimes the financial plans the advisers put together are wrecked over husband-wife money disputes.
“The first step is for one of the spouses to take responsibility for finances,” says Charles Hughes, an adviser in Bay Shore, NY. “But that requires the faith and trust of the other spouse.”
Why does the worst happen to couples because of money?
They didn’t take the time to understand their differences, according to one adviser.
“Many couples never talk over their different financial values. They don’t take the time to understand their different life experiences with money,” says Susan Elser, an adviser in Indianapolis. Elser adds that the way people spend, invest and save is the result of how they grew up. So couples should talk over their money histories, she says.
“That’s important because it helps to understand how the other views money and how he or she feels about debts,” Elser says.
A couple that will achieve healthy finances discusses spending and investing issues frankly, according to advisers.
Budgeting, Altfest adds, is very important, whether it is a written or discussed plan. Altfest works with high-net-worth professionals. Yet budgeting is such a vital issue in the husband/wife dynamic that he devotes part of his practice to credit counseling, even though his clients earn top salaries.
For example, Altfest had a couple in which the husband was hurting the couples’ finances by insisting that they dine out at a pricey French restaurant at a cost of $200 a meal, twice a week. It was an experience that the husband felt was “an entitlement.” The wife wanted him to stop and Altfest agreed with her, asking him if he couldn’t find a less costly dining experience.
“They ended up compromising. He agreed to only go to the French restaurant once a week,” according to Altfest.
Elser says that in most marriages, it is inevitable that one person takes charge of finances, because the person has more interest or more knowledge.
“But it’s still very important that the other person contribute his or her values on money, that they discuss how they will spend and save, and that they agree on a budget,” Elser says.