Reconcilable Difference

Sun Herald

Sunday November 30, 2008

David Koch

Relationships face strain if the partners are not on the same page on finances.

I RECEIVED an interesting letter recently from a reader who I think reflects a critical issue confronting many couples as they face the economic downturn.

"How do I get my husband to understand money? He is a spender and if he knows we have money or not he will go and book things up on accounts and I get the bill.

"I am a saver and can't handle not having a bill not paid. So I pay them. Then we have no money.

"We have our own business, which we have had for almost 10 years.

"It makes good money but we have made some wrong decisions in the past and with my husband's spending habits and the economic downturn we are now really struggling."

I really feel for people in this situation because there is nothing worse than when a couple aren't financially compatible.

During the good times this incompatibility can be tolerated because there is plenty of cash on hand to pay excess bills. But when times are tight, and every dollar counts, this incompatibility can put a relationship at risk.

There is every reason to worry and something needs to be done.

So let's see if we can get you on the same page. You could put your husband on an allowance and cut him off from the rest of the bank accounts so he only has the allowance to live on. You could start secret accounts that he knows nothing about. You could cut up his credit cards.

But that's all pretty extreme and just may antagonise the situation.

I reckon the key is trying to change his behaviour with money and get him to see that by being careful on a day-to-day basis could help fulfil his dreams and goals in the future. Give him something to aim for. It's all about talking and planning together.

People's values can be so totally different that without a structured financial plan for the relationship it will flounder at the first sign of financial stress over spending and saving differences.

There will be disappointment, disagreement and disbelief if you haven't done your financial teamwork and created a financial relationship with agreed financial goals and budgets.

A lot of couples just meander through their finances, a bit of a budget here, a quick discussion on who's going to pay the mortgage this week, an expensive holiday because "I've just got to do a safari before I die" and all of a sudden the credit cards and overdrafts are at their limit.

Start getting on the same financial page by understanding each other's values and the goals you've set yourself to fulfil those values.

Values are the principles, standards, morals and ideals that we live by.

Values come first, and we then equate them to our goals.

So sit down with your husband and share each other's values.

As an example "values" can be our need for security, health, happiness, how to provide for loved ones: the list is endless.

Take these values and add goals from each of you.

ValueWife's goalsHusband's goals

SecurityAnotherMortgage

degreerepayment

HealthGoing toEating

the gymwell

HappinessNight togetherPlasma

at hometelevision

As you can see, the definition of the value "security" can mean a different goal for everyone. Also as each year goes by our goals will change although our values may not. Your financial life should constantly change to reflect these differing goals.

None is more correct than the other; they are just different and our differences can cause all manner of problems in a partnership if you presume your goals are the same, even if you have similar values.

The aim is to agree on similar financial goals that satisfy your values.

So sit down with your husband and:

* Find one value.

* What goal do you want to achieve that feels right for your value?

* What is one step you can do today to start towards your goal?

You are working now towards your shared goals. If you are not saving enough then one or more of these goals will be compromised.

This is just the start. Keep adding more shared goals and coming up with a shared financial action plan to achieve them where you both have a sense of ownership.

It's much easier to change your financial habits if you have a goal to achieve.

© 2008 Sun Herald

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