The five categories of financial infidelity are affecting relationships all over world. These categories include: overspending and debt, financial separation, lack of planning, control, and money secrets. Get detailed descriptions on the five categories in the Money Couple Minute, “The Five Categories of Financial Infidelity”. Also, you can watch the Money Couple on ABC’s News Now program on the segment, “Good Money,” as they go into more detail and answer viewer questions relating to the five categories of financial infidelity.
It’s one thing for couples to have separate accounts—his and hers checking or separate cash reserves. But secret accounts are a whole ‘nother ballgame. They mean that someone in the relationship doesn’t trust the other person with financial decisions. And since money touches every part of our lives, that financial mistrust usually points to a deeper level of mistrust that will infect the whole relationship. That’s why hiding has to stop if the relationship is going to survive. Read the complete article explaining the dangers of hiding money in the Money Couple Minute, Hiding Money.
The number one cause for divorce is miscommunication about money – in most cases it is better to “get it all on the table” versus waiting until it is to late.
Some couples wonder, “Are we setting ourselves up for divorce by having a prenup?”
The simple answer is, “No.” There are some very practical reasons to have a prenup in place.
Here are some points to having a positive prenup conversation:
1. Set a positive tone.
It is important to keep the discussion positive. With this type of conversation it is easy to become defensive. You can open the conversation like this: “I would never want money to come between us and ruin our relationship. Why don’t we explore some reasons to have a prenup. Let’s talk about the positive and negative aspects.”
2. Write it out.
Be sure to write out the positive and negative aspects to having a prenup. Make sure each person gets an opportunity to add their thoughts to the list.
3. Avoid the stress.
Once you have agreed upon a prenup take these important steps:
- Be prepared – set your prenup up a number of months before the wedding – wedding planning can be stressful, be sure have this done and out of the way.
- List all of your assets and liabilities – this can be a relationship saver because there will be no financial surprises.
- Set it up to strengthen the relationship – start your relationship out right, clear financial communication is key to making sure your love stays strong.
Remember, no two relationships are the same. Decide what is the best decision FOR YOU and move forward together.
View the Money Couple on ABC’s News Now segment, “Good Money” as they talk about prenuptial agreements and answer viewer questions in the Money Couple Minute.
It can be overwhelming to think about money, especially if you and your partner have never done it before. So take small steps. Start with what we call “the Money Dump” where you put all your finances on the table—literally. Look at your monthly spending (include everything!). Then talk about your income. Are there places you need to cut back or make other changes?
Get more information about the Money Dump in the Money Couple Minutes.
Many of the ideas we talk about in First Comes Love, Then Comes Money can be applied to conversations with your children as well. Honesty, respect, compromise—they are all essential as you talk to your kids about the changing economy and what it means to your family.
Kids are pretty perceptive and they will notice when the stress of these financial times starts to creep into your family. So don’t try to hide the truth from them. Instead, talk to them about what’s happening in calm, honest ways. Let them know what kind of changes they might notice—going out to eat less frequently, shopping less often, a more modest birthday party, etc.
So do your best to stay positive. One of the fringe benefits of having strong financial communication is that you can honestly tell your children that you are making plans and working hard to protect your family. Use simple terms and avoid creating drama or stirring up fear. Even if you’re facing serious financial challenges, let your children know that they will be cared for, no matter what.
Let your children see you talking about money in healthy ways. This is a chance for you to model good financial communication to your children—something that will benefit them for the rest of their lives.
It also helps to know your children’s money personalities. While they are not fully formed in when children are young, you can probably see hints of how your children think about money—one keeps all her pennies safe in her piggy bank, another can’t wait to spend her birthday money.
Finally, invite your children to help you set family financial goals. If you need to cut your spending, ask for their ideas on how you can do that. Show them how their ideas are helping your family stay on track financially.
They can’t. If couples could create budgets and stick to them, we wouldn’t need to create these resources. But over and over, we work with couples who have great intentions and beautiful budgets who are falling apart financially. That’s because budgets only work when both partners are fully committed to creating them and using them as a map toward their financial future.
The couples with the best financial communication are those who create realistic budgets together. They sit down, they agree to honor what they create, then they talk about what’s important to them, what they want to save for, what they want to invest in. They look at what they earn and what they spend. They talk about how to adjust one in light of the other. They listen to each other and compromise to come up with a budget that works for both of them.
If you want a budget that works, plan a date where you and your partner can lay out all of your finances—in First Comes Love, Then Comes Money, we call this a Money Huddle. Take an honest look at what you earn and what you spend. Then set some financial goals for the next 3 months, the next 6 months, and the next year. Create a budget that helps you reach those goals and meet at least once a month to check in on your progress.
Working together, having mutual buy-in on the budget, and keeping the lines of communication open are the keys to making a budget work.
We aren’t going to tell you to stop fighting about money. That’s simply not possible. What we can help you do, however, is learn how to fight fair, to fight in a way that actually helps strengthen your financial communication. In First Comes Love, Then Comes Money, we lay out a detailed plan for resolving financial conflict. Here are steps you can take now to start fighting fair:
Agree that you will respect each other. No matter how angry you get, try to act like partners in your family business. Do your best to understand each other and your different perspectives on money. And agree to show each other grace when you violate these expectations.
Try to diffuse the situation. Take a deep breath, hold your tongue, and walk away if you need to cool down.
When you’re calm again, talk through the problem. Work together to come up with three or four possible compromises that help both of you get your needs met.
Keep your money personalities in mind. You are two unique people with unique perspectives on money. Do your best to see your partner’s perspective and respect his or her point of view.
Extend grace. Be willing to start fresh every day, no matter what happened yesterday. Be people who try to see the best in each other, who believe in each other, who are willing to put petty differences aside for the good of your relationship. You love each other. Do your best to show it.
We certainly don’t expect you to fight fair every time you argue—we don’t. But when you blow it, apologize, forgive, and move on. Be patient with each other, keep trying, and promise to do better the next time. You might only get it right 30% of the time. But that’s 30% more than you were doing before. Fighting fair is truly an art form. You won’t do it perfectly at first—and maybe never. But you can get better at it, conflict by conflict, week by week, month by month.
Lots of couples communicate about credit cards. The problem is that their “communication” happens in the form of arguments, blame games, and lingering resentments. We talk about how to recover from damaging financial communication in First Comes Love, Then Comes Money, but if you’re stuck in a pattern of arguing about credit cards, we want to offer you some triage.
To get to the root of credit card problems, you and your partner need to talk about your credit cards before there are problems. If it’s too late for that, choose a time when you aren’t looking at the latest statement—and stewing over the latest budget-breaking purchase—to talk through your expectations, your concerns, and your plans for making changes next month.
Look at your past statements to see where you’re spending money. For many couples, credit card debt creeps in slowly. They don’t even see it coming. Knowing where your money is going–and talking about where you want it to go instead–is the best way to get a handle on your debt. Does your spending match your values? Your financial goals? Your dreams? If not, decide together how you will rethink your spending. Where can you cut back? Where can you save? You’ll both need to compromise here and there—that’s how relationships work.
Once you know what you want from your finances, make a plan to control your spending. If you can’t do that on your own, meet with a financial planner who can help you lay out a schedule for paying down your debt.
There’s no question the changes in our nation’s economy will add stress to our lives. Our advice? Face it. As a couple, acknowledge that there will be additional financial pressures in the coming months. You can get bogged down by the emotions, the tension, the depression these times can bring on but that won’t help you. You have to face reality then make a plan to deal with it.
Start with an honest evaluation of where you are right now. Look at your assets, your income, your debt, your investments. What might change? What will stay stable? In First Comes Love, Then Comes Money, we teach readers something we call The Money Huddle. The idea is to get all of your financial information on the table so you can have an honest conversation about where you’re at and where you’re going.
Once you know where you are right now, make plans to get you through the next six months. That’s right, six months. Working with a short timeframe makes necessary changes feel less overwhelming. And be prepared to make real changes. If you need to cut back on your spending or stop using credit cards for six months, do it. Taking action now will save you from bigger problems down the road.
Welcome to the Money Couple blog. We will be adding all types of helpful information for you regarding financial infidelity and other money related issues for couples. Visit our site at www.themoneycouple.com for more information. Thanks for visiting and come back often.
Scott and Bethany Palmer are financial communication experts specializing in helping couples work through financial infidelity. Scott and Bethany are also the authors of the highly successful book Cents and Sensibility and First Comes Love, Then Comes Money.