Money & Marriage: The Hard Conversations

Tuesday, July 31st, 2018

Myth:  Couples with financial conflicts should get a divorce.

Reality:  Conflict is a part of every relationship.  The question as to staying or leaving is how a couple chooses to approach the differences.

The financial conflict conversation is rarely about money.  The true conversation is about what money means.  One description of this mental process is called the Complex Equivalent; a belief and value that are coupled with a behavior making the action a “programmed” response.  Actions with money are an example of this.

Internally the behaviors seem congruent and make perfect sense.  The response from a spouse or other outside observer is the external mirror reflecting the reality of those actions.  At times, what seems internally congruent is externally dysfunctional.

Overcoming these problems requires open communication. 

Most couples do not understand how to communicate around financial issues.  Individuals think that their internal dialogue and perception is the reality that everyone else experiences.  What they do not understand is that in any relationship, the meaning of communication is not in your intended message; it is in the response received from the behavior.  This may be approval, shock, acceptance, grief, fear or much more.

This is evident when we observe couples.  We see poorly worded comments that were received with relief and a positive acknowledgment.  We also see carefully crafted comments that elicited strong, negative responses.  Clearly, the intended message gets lost if the level of trust and acceptance is non-existent.  It becomes difficult or impossible to exchange information when there is a lack of emotional flexibility within the communication.

Per-Marital Behavior

These learned interactions go back to the time when people are dating.  When couples are caught up in the “limerence” of romance, they are not thinking clearly.  It is a bit like grocery shopping without a list while you are hungry.  Without an external objective measure, it is difficult to make an accurate assessment.

When we teach professionals about money and marriage, we talk about these early interactions.  The exploratory pre-marital conversations are important when getting to know each other.  If there is hesitation with transparency, that can be an early indication that something is wrong.

Even if you are married and find yourself in financial conflict, there is a path forward, as long as both sides are willing to be transparent and to make changes that conform to the reality of your financial world.

Eva Rosenberg offers a list of questions people that are dating can use to get to understand each other financially.  This is part of building awareness about how you each view the financial world separately and as partners.

Suggested questions to have in pre-marital conversations. 

By your direct observation, what financial habits are displayed in daily life?  What is the level of financial awareness or is there a tendency to avoid paying attention?

Is a person obsessive, controlling, or pre-occupied with money?

What attitudes do you both have toward money?  Is the behavior or belief system frugal, stingy, wasteful, or balanced?

Is there any gambling? If so, how? Is the gambling online or in casinos? Are bets made with friends?

Are there any outstanding gambling debts (or any other debts)?

How willing are you both to be accountable and to live on a budget?

What big purchases are anticipated in the next few years, and what are the plans to pay them?

Are there any child or spousal support obligations?  Are these obligations met on time?

How are the relationships with any ex and children of another relationship? How will those relationships impact the new life together, both financially and emotionally?

Is there any reason for the finances to be kept separate, at least in the beginning?

We add in a few steps we call the “romantic third date.”  These are items to be looked at if a relationship seems to be getting serious.  This involves asking the tough tax questions before you get married:

Are there outstanding IRS tax liens or unfiled tax returns?

Did the spouse-to-be comingle funds with a prior spouse without properly severing the financial relationships with that prior spouse?

Will the new relationship be impacted by old creditors?

An important early step is to share financial information that you can review independently allowing you to make independent conclusions.  Assuming you are comfortable with this person, you can jointly share your tax and credit information.  You can provide each other with Form 4506T Request for Transcript of Tax Return. This allows you to see the IRS tax information for each person over the last four years.  You can also order the credit reports from all agencies.

You are looking to see if there are tax liens, levies, a poor credit history, or anything else that would raise a flag.

What if your married and in a financial mess?

Assuming you have both been open and honest with each other, there are many financial problems that arise outside your immediate control.  Financial distress can result from a company downsizing, a medical crisis with large bills, or technology replacing the need for a human to fill a position.  When the financial crisis hits in a healthy relationship, the partners pull together.  They put up their best efforts and work to make their lives better.

If trust is destroyed by poor financial behavior, this is most often a terminal issue for the marriage.  At least one partner concludes that anything is better than the current situation.  The pain of separation becomes the more attractive option.

Conflict carries choices.  Conflict can result in growth when two people participate in the resolution or conflict can lead to destruction when people become positional, secretive, and unwilling to work towards a resolution.