After 19 years of marriage, Caroline told Donald she was done. Caroline had always known that money problems could cause divorce. She was beyond fed up with the money problems that had plagued their relationship for years.

The Visa card bill, littered with Donald’s usual extravagances, was maxed out. Again. While Caroline couldn’t control Donald, Lord knows she’d tried; she could exert control over her own financial life.

Over the years she had tried to accept Donald’s over-the-top purchases of cashmere sweaters, leather jackets, and hand-made Italian shoes- and she didn’t begrudge him these things. She was just sick of being in debt. They had filed for personal bankruptcy a few years ago and had vowed together to get on firm ground financially. Caroline now understood that Donald had no control over his compulsive spending, despite his stated good intentions.

Money is the #1 issue couples argue about and the #2 cause of divorce.

It is not surprising that money problems could cause divorce, or that couples argue most over finances. Money is a complicated and highly charged issue. Each person has his or her relationship with money, his/her personal “money self”. To further complicate the situation, money carries a different charge and meaning for each of us. There are people for whom money-making is a game to get to the top.  For some money means freedom or security while for others it’s all about status and pleasure.

Problems occur in a relationship when the partners have conflicting values, styles, and perspectives about money and don’t talk about it. Even though it’s common knowledge that money is a leading cause of divorce, couples rarely explore their individual money-selves before tying the knot. Often a money conflict sparks the discussion and sheds light on areas of incompatibility. Most relationships not only lack a foundation of knowledge about money differences but also have no strategy for how to handle these differences within the context of a relationship.

It’s not that your money differences alone will send you to divorce court. It’s about whether you can talk about them and compromise.

If managed well (with awareness, understanding, and objectivity) different perspectives are not necessarily unworkable. Many couples create financial plans that account for their individual money needs and wants and find a complementary balance. The Grinch curbs the spendthrift who loosens up the Grinch, and together they can enjoy a moderate taste of the good life.

A helpful approach to tackle money differences is to have the meta-discussion about money.

Spend time together talking about your upbringing, your parent’s values, attitudes, and habits around finances. Familial influences shape our money selves as does the socio-economic status of our parents and grandparents. The coupling of a person from a privileged background with a person from a working-class family where money was scarce can be challenging in myriad ways. Awareness of the money self you each bring to the relationship can shed light on current issues and provides data for creating a workable framework.

One way to relieve money stress involves assessing how finances are organized in your relationship and whether the structure works.

Here are three basic financial arrangements common in relationships.

Shared Finances– All funds go into a common pool. There are joint bank accounts and equal access to all assets. A shared finance arrangement is probably the most common when a family has children or one wage earner.

Independent Finances– Partners keep and manage their own funds independently. The responsibility for payment of shared expenses is resolved through agreement ( I’ll pay the rent, you pay the utilities), based on the proportionality of the partners’ individual incomes or another formula that feels fair and equitable.

Mixed Finances-Each partner manages his/her own finances. A joint account is created to pay household bills. Each partner agrees to deposit a fixed amount into the joint account based on the proportionality of the partners’ individual incomes or another formula. Couples also can agree to contribute regularly to a joint savings account earmarked for things like emergencies, vacations, retirement, and travel.

With this in mind, if you’re beset with money woes, you can begin to have a series of discussions about your finances to get clarity and slay your money problems. Here’s a step-by-step guide:

–Start by engaging in the meta-discussion about your socio-economic backgrounds, and your parents’ attitudes, beliefs, and behaviors about money.

–Use the awareness gained from the meta-discussion to inform you about your individual financial values, dreams, and goals.

–Talk about your individual values, dreams, and goals with an eye toward assessing how they match up and how they differ.

–Explore ways to bridge the gaps. How will you the saver accommodate the spender, and vice-versa? How will risk be tolerated by the security minded person?

–Review how your finances are organized and assess whether the arrangement works. Discuss the pros and cons of alternative plans.

–Finally, create a financial plan designed to align with your shared values and accomplish your goals as a couple while also accommodating your individual money selves.

In the case of Caroline and Donald, drastic measures were necessary to save their marriage. They separated their financial lives so that Caroline’s earnings would not subsidize Donald’s spending. Caroline agreed to stay with him as long as he joined Debtor’s Anonymous, retained a therapist, and paid his share of ordinary household expenses on time every month. They would re-assess their situation at six, nine, and twelve months.

We work with couples to help them get real about their finances, resolve differences, and create a practical framework to move forward together. We can help you turn around your money relationship too. If money issues are making your relationship unhappy, consider reaching out for guidance.  Contact us for a complimentary consultation to explore how we can help you get your money house in order.