Women's Money Wisdom

Episode 181:Common Money Conflicts for Couples and How to Resolve Them

• Melissa Fradenburg, CDFA®️, AIF® • Season 3 • Episode 181

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Are you ready to gain the upper hand over one of the most common sources of contention in relationships? We're talking about money, of course! In this episode Melissa Fradenburg, CDFA®️, AIF®,  will help you defuse the ticking bomb of financial discord. Together, we dissect the three most prevalent money conflicts couples encounter and offer you effective strategies to evade these confrontations. We take you through the classic spender versus saver dispute, unravel the complex issue of financial infidelity, and everything in between. Arm yourself with the power of communication, the convenience of automated savings, and the virtue of financial transparency as we journey towards marital financial harmony.

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Speaker 1:

Welcome to the 52 Pearls Weekly Money Wisdom Podcast. I'm Melissa Joy, a certified financial planner and founder of Pearl Planning, and I'm Melissa Friedenberg, financial advisor with Pearl Planning. Pearl Planning is a financial planning and investment management company located in Dexter and Gross Point, michigan. We work with clients all around the country. The purpose of our podcast is to explore specific financial topics and provide advice you can use in your everyday life.

Speaker 1:

Hello and welcome to the 52 Pearls Weekly Money Wisdom Podcast. This is Melissa Friedenberg, and this week I'm going to be talking about three common money fights that couples have, as well as talking about ways to avoid these conflicts in relationships. So, first and foremost, this is a very, very common conflict for couples to have. In fact, more couples fight over money than sex, chores, pretty much anything else. So if you have had a fight in the last year with your spouse over something financial, you are not alone. So number one is going to be where one person is the spender and one person is more of a saver. This is super common. I actually, in working with couples, I used to think that mostly women were the overspenders and men tended to be the savers. But I think that women get that kind of rap, because they're often the ones that buy the day-to-day household items where, in fact, as far as who's a spender and who's a saver comes down to lots of things. Mostly, I would say learned behavior, kind of how you were brought up, whether you were brought up with money and you never had to worry about budgeting or whether you didn't have money. So now that you do, you kind of feel like yo-low.

Speaker 1:

There are lots of reasons that go into somebody being a big spender versus a saver. That could be a whole podcast episode in its own right, so I'm really going to just focus here on couples. The biggest thing is communication. When you have one person in a relationship who may be overspending one, it's important to clarify are they in fact spending above their means or are they just buying things that maybe the other partner doesn't feel are necessary? The biggest way to get around this, or sort of lower the tension, if you will, on this, is to sit down and talk about how much you have to spend on those wants versus needs every month. Not necessarily sit down and talk about it every month, but what is that monthly inflow, outflow and excess leftover? Now, even if you and your partner are on the same page as far as how much to spend.

Speaker 1:

I really really think it's so beneficial to automate your savings, but especially if one person prioritizes savings to sit down, go through monthly income, monthly bills and figure out what is left over at the end of paying those fixed expenses and things like groceries and restaurants that you would spend on monthly just to feed your family. What is that excess left over? What can you afford to put away each month and how much do you need to put away each month to reach your goals? So goals could be retirement, college savings, saving to buy a house, whatever it is that you prioritize as a couple. Automate those savings. So easiest for retirement would be obviously a retirement savings plan through a paycheck. That's pretty easy to automate. You have that come out of your paycheck before you even see it hit your account. But did you know that you can do this with other savings? So, whether it's going into a savings account once that paycheck hits or going into a taxable investment account every month, again, the idea of automating savings has two benefits. One, you're not likely to spend it because it really never hits the checking where you see that balance. And two, you're getting dollar cost averaging if you're investing automatically every paycheck or every month, and what that means is you're buying in on the same day as in the month, regardless of what the market is doing. So you're not making a decision. I think the market's going to go up. I'm going to put some money in. Best case scenario is you're just doing it every month, taking advantage of compounding interest and different prices in the market. Automating number one way to avoid the disconnect between a saver and a spender If it's not there to spend, can't spend it. If savings goals are being hit, then less tension when money is spent. The other thing is just communication. So my husband and I have different things that we should, I say, find joy in spending money on.

Speaker 1:

Actually, this past weekend we had a member guest golf outing and had a friend from college come to play and I spent some time with his wife while they were golfing, who I don't know, because this is a friend from college and I'd never met his wife before. So it was interesting what people person just getting to know, kind of how other couples deal with these conflicts when it comes to who's buying what. But we were talking about the cost of a golf weekend. So not only are you spending money to get to that destination, and then whoever's hosting is obviously spending money for the tournament, but they do little side bets and betting on the actual tournament, both their teams and other people's teams, and I think that's so interesting. We were sort of joking around about what if we went to a girl's night and placed money down on the table or like, all right, who's spouse is going to call first, whose kids are going to text meeting something first? I'm going to throw like $20 down on Mindy right. That would be so funny if we did that and I may just give it a try, you know, for research sake. It could be really fun. But I feel like I would rather save my 50 bucks for, like, a pedicure. The other side of that is my husband probably wonders why I spend 50 bucks on a pedicure and not just paint my nails at home. So it comes down to these money conflicts. One again hitting savings goals first and then two discussion on what that leftover is every month and then allowing your partner to have some spending autonomy in order to do the things that are important to them with that excess. That is for wants versus needs or savings goals Easier said than done, but again, that is the answer.

Speaker 1:

Conflict number two that I see come up again and again financial infidelity, and that term sounds scarier than it can be, but it is an issue of trust. What I'm talking about here is not necessarily infidelity meaning cheating. Now it can be, a lot of times, financial infidelity. The reason that things are being hidden is for that reason that there's somebody else in the marriage that they're spending money on, so that obviously there's the financial infidelity of it. And then there's also just general infidelity, but something as little as hiding bags or purchases in the vehicle, which is a learned behavior I'm trying to unlearn myself, which is so silly because we actually use one credit card and see each other's purchases, so I'm not sure who I'm hiding it from. But again, it's that like things that bring me joy and purchases, I know, do not bring J Joy, so sometimes I don't know, just leave him in the car for a bit until he's not around to inspect when I walk in.

Speaker 1:

Most Financial infidelity lies in the middle. A perfect example of this is I had a friend who Stayed home with the kids when they were young. She went back to work part-time as they got older, but really not the breadwinner. So her spouse was paying the bills and really, you know, funding the home financials. He was giving her a little flak about her spending and, doing a little digging, she found out that he gave a large sum of money to his Fraternity. Now when I say fraternity, this is back in college. He is a grown man with grown kids who are almost college age, so this was obviously Something that was important to him, but not important enough to discuss, and it was a big chunk. It was, let's call it, ten thousand dollars, so probably an entire, you know, month of spending for this couple and Never mentioned it. That is classic financial infidelity, where you're making a large financial contribution or donation or purchase Without discussing it with your spouse. That doesn't mean you need to ask permission, although that's nice, but again, if it is a secret, then it's an issue of trust. So this one really comes down to communication.

Speaker 1:

The reason I mentioned it one of the biggest Money conflicts that I see in couples is this Secret spending, whether it's on one thing or maybe it's Secret debt. So maybe you have a credit card and just your name, or a credit card that you no longer use as a couple, but one person in the relationship is using it. This comes up often in divorce, where they think they don't have debt or that their debt is manageable. It's a certain amount and the other person is Racking up credit card debt in the relationship and this is a big one. This is financial infidelity. It breaks trust. Now, if you're not going through divorce and it comes up in your relationship and you want to work through it, it's important that both people sit down and listen and talk about it so you're gonna come clean and you're really gonna listen to kind of why this person felt the need to hide purchases or hide debt or behaviors. And get to the root cause and be open If you're going to work things out. Be open to that person confessing, if you will, and try to keep a level head about it so that you can work this out as a couple. But this is a toughie, not going to lie.

Speaker 1:

And number three this is so common. This is where there's a change in financial status, very stressful in a relationship. This could be one person losing a job, whether they were laid off, or maybe taking a step back to care for children or an aging parent. This can also be an unexpected pregnancy or illness comes up and all of a sudden you're in a different financial situation. The flip side to this can be actually not less income but more income. So, whether it's an inheritance or a lottery win or a huge job promotion, where your financial status changes on the positive side, can also be stressful in a relationship. It comes down to, when there is a change in status, getting more money or less money. Obviously a little bit more difficult to go down to that less money in the relationship.

Speaker 1:

You're probably thinking, melissa, the solution to all three of these common conflicts is really communication, sitting down, doing a financial plan, figuring out what that budget is. I know the terrible B word but again, budgeting doesn't have to be about restriction. Sometimes, I would say almost more often than not, budgeting actually allows you permission to spend because you have an idea in your head how much you can spend each month each of you, whether you divide that evenly or you say one person is really in charge of the household purchases. So we have 600 left over every month after we put away for our savings goals, and I'm going to give myself 200 of that and I'm going to give my partner 400 of that to spend, because again, they're buying for the household four things that are not considered needs, but more wants. However, you divide it up, the idea is that both people in the relationship know what that amount is and have some spending autonomy whether it's actual spending autonomy is in a separate account, where this money goes, that they can spend or save for a larger purchase, or whether it's done through a joint account. But both people are clear on as long as you stay within that amount, allowing the other person in the relationship to spend that money how they would like to spend it.

Speaker 1:

So if you are listening to this, I want you to one know that if you do struggle with some of these conflicts in your relationship, you're not alone. Very common and yes, telling you that the solution here is to do financial planning with your partner, whether it's on your own or whether you need to call in a financial advisor or financial planner to sort of be that mediator in this discussion. I do recommend that if you really don't see eye to eye or if you're just extremely uncomfortable having this conversation with your partner, it can be a nice way to really bring on that conversation and make it front and center. Any good financial planning. Engagement will include talking about cash flow savings, hitting goals and then, of course, where is that extra money going if there isn't money there to fund those goals? So if you're listening to this and you know somebody who could benefit from this episode, please do share.

Speaker 1:

We love that our listeners are growing. We see it every week with our downloads, and Melissa Joy and I are just so thrilled to be able to communicate with you in this way and we really appreciate you. As I mentioned in previous weeks, we have some great guests coming. This fall. It has been a lot of Melissa and Melissa solo editions, but we do have some great stuff on the way, as always. If you have either ideas for topics or you have guests, that would be good and you want to reach out to us with those names, we appreciate it. Hope you're enjoying these last few weeks of summer and thank you for listening. You can access our first two seasons of this podcast on our website, at wwwpearlplancom, or on Spotify. If you're interested in learning more about pearl planning, feel free to sign up for our newsletter, also found on our website.

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