By Michelle Singletary
Washington Post Staff Writer
Sunday, February 5, 2006
Here's a universal truth about your money and your man: Money may not buy love, but fighting about it will bankrupt your relationship.
How is it that people can proclaim to love one another, sleep with each other, and even have children together, yet they won't do what it takes to stop fighting about money?
I know why.
And deep down, you know why, too.
Couples fight about money because they have "issues."
Perhaps your husband was overindulged as a child. As an adult, he feels entitled to the best this world has to offer, regardless of whether he earns enough to pay for it all. Or maybe your boyfriend grew up not having much of anything and now worries all the time about having enough. The result is that he's so frustratingly frugal that when he pinches a penny, he dents it.
It's the lack of communication and compromise that torpedoes relationships, not a lack of money. Many couples think that if they made more money, their financial issues would go away. They wouldn't. The problems would just become more expensive.
Once you move past the dating phase and decide to marry, it's time to change your financial relationship with your boyfriend. It's time to be as open with him about your money as you have been with your heart -- and everything else, for that matter.
This week and next I'm going to take you through key points in relationships where you should stop and ask yourself some serious financial questions. This week we'll look at the beginnings; next week, I'll have advice and information for unhappier times, when, despite all good intentions, marriage is on the rocks and divorce looms.
* * *
Once you get engaged, come clean about everything financial -- your credit history, debt load, income, retirement plans. Discuss everything. It's vital that you exchange your views and values about money before you exchange wedding vows.
I know discussing money isn't always easy. Here's what happened to one reader who tried to talk to her boyfriend about their financial differences: "My boyfriend and I had a discussion recently about finances during a marriage. We have been dating a significant amount of time and things are getting serious. We're talking about getting married. Well, we found we have very different points of view on finances. My concern is that he became very upset that I felt differently from him and refused to compromise. Are these deep-seated beliefs able to be changed?"
Can someone change? Sure, but it won't be easy. That's why you need to have the money conversation before you say "I do." Don't ignore the huge red flags waving in your face (he "refused to compromise"). If your fiance won't even come to the table to talk, you have big problems. Communication is first of the three C's in a relationship.
If your partner is shutting you down whenever you want to talk money, you have three choices: Stay and put up with the differences and the eventual conflicts. Walk. Or run for help.
If you want to stay, get help. Here's where you might find counseling:
· Your church or religious organization. An increasing number of churches are offering premarital programs. Look for a program that includes a comprehensive session on money management, including covering the emotional issues about merging your money.
· Check with your benefits office at work. Many employee-benefit packages include referrals to counseling services. You may find that your employee-assistance program covers premarital counseling.
· Professional organizations. You can find a therapist in your area by contacting professional organizations for counseling. For example, more than 15,000 marriage and family therapists are listed on the Web site for the American Association for Marriage and Family Therapy ( http://www.aamft.org/ ). The Financial Recovery Institute specializes in helping individuals and couples with money issues. Demand is so high for such services that the institute provides counseling by telephone. In addition to dealing with the emotional issues of money, the institute teaches basic money-management skills.
· A credit-counseling agency. Individuals often seek help from such agencies for debt consolidation, but these organizations can also provide financial counseling. For an agency near you, go to http://www.debtadvice.org/ .
* * *
Before you get your marriage license, you need to get three important documents: all three of your credit reports from the major credit bureaus and all three (yes, you have three) of your credit scores. Once you have the reports and scores in hand, set up a time to swap them with each other.
When I suggest that couples share their credit reports, people often gasp. They giggle. They roll their eyes.
During one church-sponsored premarital counseling course I attended, the instructor began the personal-finance session by telling the couples they would be required to exchange credit reports. Before this announcement, the couples had been joking and laughing. After it, they all fell silent. They stared at the counselors with looks that ranged from "No problem" to "Are you stark-raving mad?"
"You love me, right?" one young woman asked her fiance.
"Oh, Lord, I'll be waiting to see this," he answered.
A credit report is the most telling example of how a person handles money.
Think about it. Why would you feel uncomfortable sharing your credit report with the person you're engaged to? When you get married, you're going to be sharing every aspect of your life, so you shouldn't be embarrassed to show your loved one how you've managed your credit life, which can be key in getting insurance, a home loan, and even a job.
If you share reports, you will find out what one reader did: "My fiance has a wrecked credit history. He has $18,000 plus [in debts] and he isn't working to pay it off because he's a student and has no money. I know he will, but for now there's a pile of letters from collection agencies. I've told him no marriage till his debts are gone. In the meantime, I'm not supporting him either! I can't help but feel as if I'm being an ogre in some ways. Am I?"
I'll tell you what I told this woman. You're right to tell your man: "No romance without fixing your finances." Too many couples start off their married life with an enormous amount of debt. That's a lot of financial pressure on a new marriage.
At least this reader found out about her fiance's debt. I've heard from many women who are ashamed of their credit history. As a result, they hid it from their fiancés. When it comes to matters like this, don't lie. That includes lying by omission. The truth always comes out -- often during a mortgage-loan application. Is that really when you want your husband to find out you're tens of thousands of dollars in debt?
In addition, sharing credit reports will give you an opportunity to talk about premarital debt. With the reports and credit scores in hand, you can discuss your expectation if your loved one comes into the marriage with debt. For example, this reader asked: "If your spouse was a 'charge-aholic' before you got married, are you responsible for his debts after getting married? Can creditors attach commonly owned property?"
The answer to this woman's question is: It depends. In community property states, you could be held liable for debts your husband racked up as a single man. If you don't live in a community property state, you are liable for repayment of debts you both agreed to be responsible for -- a co-signed mortgage, credit cards, a car note.
But let's look at this woman's question more carefully. She's aware that her fiance has a credit issue and even calls him a "charge-aholic." She's worried about joint property being used to pay off debts he amassed when he was single. These are all red flags she shouldn't ignore. If she doesn't address this problem before she gets married, her new husband will take her down a dark debt road. And even if she isn't liable for his premarital debts, commonly held finances will be needed or diverted from other expenses to pay those bills. That's serious enough that the two of them should be doing some serious talking about their finances.
As soon as you begin having discussions about getting married or right after you get engaged, order your credit reports. Set a date to talk about them. Debt happens to the best of us. Come to the table prepared to discuss, not argue or yell.
* * *
In 1981, 4 million wives made more than their husbands, according to the U.S. Census Bureau. By 2001, that number had more than doubled, to 8.1 million.
Once you've taken the Money Talks quiz, it's time to develop what I call "house rules." It's imperative that you establish a set of guidelines to govern how you will deal with money in your household.
Think about it. We work for organizations that have rules on how we are to conduct ourselves in the workplace. And yet when it comes to our personal lives, we rarely establish written rules of engagement.
For example, my husband and I have rules for just about every aspect of our home life. We even have a rule on how to conduct ourselves during an argument. When we are arguing, neither of us can bring up past incidents. If the rule is violated, we get buzzed. Let's say I'm fussing at my husband for dropping his shoes in the middle of the family room. If I complain about it, he can't bring up at that moment a time when I may have done the same thing. If he does, I make a buzzing sound to indicate he has violated the rule.
The buzzing accomplishes two things. First, you make your husband aware that he's veering away from the issue at hand and trying to shift focus from his own act. Second, it brings levity to the situation, as the buzzing is both annoying and funny.
Establishing house rules has worked wonders for us. We have civil, respectful disagreements and never fight about money. The key is for both of you to buy into the concept that the rules are a mandate. They can't be changed unless you both agree.
Here are some financial house rules you may want to consider adopting as your own:
· We agree that neither of us can make a purchase of $200 or more without first consulting the other. The point of this rule is to get you to discuss your spending. Even if you keep separate accounts, it's important to talk about your joint and separate expenditures.
· We agree in the case of a major purchase that both of us must vote in the affirmative. If either one of us says no, the deal is dead. Some of the biggest arguments over money result when one partner wants to spend money on something the other doesn't approve of. I have heard from spouses furious that their partners made major purchases (house, car, big pieces of furniture) without their approval or against their wishes. This can cause a major breach of trust in the relationship -- not to mention a financial strain.
For example, let's say your husband decides he wants a luxury sport-utility vehicle that will end up costing $700 a month for five years. You husband may argue that the car note is coming out of his check and that therefore you don't have a say in the decision. However, such a hefty car note may mean he needs to work overtime or get a second job. Now, tell me how that purchase will not affect the family! Clearly, it should have been jointly decided.
I'll admit that this rule does have its downside. In my house, it takes almost a Geneva-type summit to buy furniture or select carpeting. But the result is that nobody is bullied into buying something that he doesn't want or feels would be a huge financial mistake.
· We agree there will be no financial secrets. No secret bank accounts. No earnings that are not disclosed. Again, even if you decided to keep separate bank accounts, you should make full financial disclosure a hard-and-fast rule in your house. Think of it this way: When two businesses merge, there is complete disclosure of assets. There is always a vetting period when the two companies open their books completely. The same should be the case for your marriage.
· We both pledge to establish a plan to meet regularly to discuss the family's finances.
· We agree to operate under a budget and agree to adhere to it. Essentially, the gist of this rule is to get you both to establish upper limits on certain line items. For example, the two of you may agree that neither of you will spend more than $75 for a pair of sneakers for the children nor more than $50 for their birthday gifts one year. If limits are set and followed, you don't have to worry that your partner will go overboard when shopping and sabotage the budget.
· We agree that one of us will be designated as the money manager in the household. I could advise you to switch off handling the bills, but realistically, that often doesn't happen. One spouse typically ends up being the family's treasurer. That's okay. At the very least, review the finances at least once a month.
· We agree there will be no financial tit for tat. I have seen countless couples try to outspend each other in the name of fairness. For instance, my husband plays golf. Golfing is an expensive hobby. I love to read and play Scrabble. What I spend on books in a year doesn't come close to what he spends in a year on golf. But I don't try to go out and spend money on other things to equal his spending. That would just be childish.
· We agree that all discussions about our finances will be conducted in a respectful manner. We will not cuss at each other. We will not degrade each other. We will not yell at each other. If either of us breaks one of the rules, we will own up to the transgression and find a way to prevent it from happening again.
This may all seem too formal to you -- even businesslike -- but if you want financial peace in your household, you must develop a set of rules to govern your financial behavior. Will the rules be broken? Sure they will. But having them as a baseline of how to conduct yourself will help you quickly get back on track when the rules are broken.
Excerpted from "Your Money and Your Man" by Michelle Singletary, published by Random House. © Michelle Singletary.