Financially Speaking…

April 8th, 2010

Money is something that directly and indirectly impacts your life every single day. The better you understand what drives the way you interact with money, the more empowered you will be in financial relationships with family, friends, children and your spouse.

Researchers at the University of Pennsylvania, the University of Michigan and Northwestern University recently asked married couples to rank their personal feelings about spending money on a “spendthrift-tightwad” scale. The results were shocking, to say the least. It turns out that opposites do attract….at least when it comes to attitudes about money! More often than not opposing views were magnetically drawn to each other. marriage pic

Our friendly academicians hypothesize that differences in financial attitudes are seductive in early stages of courting. For instance, if you are a saver your partner’s free ways with money may feel temporarily liberating. Or, if you are more carefree with your finances your more frugal heartthrob may provide a sense of financial stability finally. Left unattended and unaddressed however, these opposite views can tear you apart long after the euphoric feelings of “newness” have worn off.

Here are key questions to discuss in establishing a money-minded marriage:

  1. Home: How much of your gross income do you want to spend on housing? If it’s much more than one-third, you will be eliminating your spending flexibility in other areas.
  2. Car: How much do you want to spend on transportation? In an ideal world, your household should keep total transportation costs to 10% less of your gross income.
  3. Education: How much are you willing to spend on education? Make sure the “tassels” are worth the “hassles.” A good rule of thumb is not to owe more money than you think you will earn in one year, on average, during the first 10 years after graduation.
  4. Kids: Do you want to have children? If you do, how do you want to raise them, financially speaking? According to the U.S. Department of Agriculture, it will cost $220,000 to raise a child born in 2009 through age 18 – and that’s before college costs.
  5. Extended Family: What are your obligations to your extended family? Between a rough economic environment and longer life spans, financial crises are showing up on the extended family front.

Talking about your financial views is crucial! We all grow and change over time, so continue talking about your evolving attitudes on money. Your ability to successfully navigate the financial waters as a couple plays a huge role in the overall happiness and health of your relationship. Learn to be financially naked with each other– hide nothing!

~Dr. Liz