Learn how to talk to your mate about money

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By KARA McGUIRE
Minneapolis-St. Paul Star Tribune
Thursday, May 03, 2007

It's not that my husband and I have a problem with our household finances. I simply wanted to write about financial counselor Ruth Hayden's popular money-and-couples class. She has refused numerous media requests to document her class over the years, even the "Today" show, in the name of protecting students' privacy. "You'll have to take the class," she said, asking that I not write about it until it was over, and "as a couple, not a columnist."

My husband, Matt, was less than thrilled with the idea of spending Saturday mornings in the dead of winter in a money class. The poor guy doesn't like talking about money, yet somehow he ended up married to a financial columnist.

And neither of us thought we needed to be there: We save, have little debt and spend within our means. Then again, within minutes of opening Quicken we'd gripe at each other, me for his refusal to let me drive the mouse and him for my impatience.

Fifteen couples of all ages chatted nervously that first Saturday. Hayden, who has been teaching the class for more than a decade, said it's the class she would have liked as a newlywed, to avoid all the "fussing."

Money will hurt your relationship if you don't know how to work with it," Hayden warned. "That's a guarantee."

Indeed, money is one of the top reasons couples fight and even divorce. Studies show that most couples don't talk effectively about money, nor do they see eye to eye on critical financial issues such as retirement savings and handling risk.

Each couple gave a reason for paying $315 to take a money class. They ranged from "no matter how much money we make our debt doesn't go down" to "because my marriage counselor recommended it."

Before tackling numbers, Hayden said we must understand our money emotions. Much of that first class was spent discussing what was learned about money as children that influences financial behaviors as adults.

She introduced the main communications strategies couples use to tackle finances that don't work: fighting, silence, and acquiescing.

Acquiescing. Finally a word to describe what we do.

"Money is a necessary evil," Matt wrote during one exercise.

But I enjoy ruminating over spending and saving. So I guess it's natural that I do all the money managing?

"One of you might be better (at money management) and might like it, but both must learn to own it," Hayden lectured. Matt agreed to play a more active role and I agreed to save cash talk for Hayden's suggested weekly money meeting.

Money's past

"Money training plus money beliefs equals money behaviors," Hayden said the following week.

So we answered questions about our needs and wants, how our parents discussed money, and our family's social status, all while pretending we were 8-year-olds.

Then we had to tabulate our weekly flexible expenses _ from groceries (we have to eat but can choose how much to spend to some extent) to movies and Target runs _ and pull out the cash in a lump sum. When it's gone, it's gone.

To be sure of that, we had to ban plastic currency from our wallets. If we worried about what would happen if the car broke down, she said we could duct tape a credit card to our car's underbelly.

Matt and I came up with $260 for our household weekly flexible expenses _ the house cleaner, a cheap date, milk, a pair of kid's shoes. Hayden said it's this flexible spending that kills a budget and gets couples in trouble.

Our homework: figuring out how much each of us costs as individuals.

Goodbye credit, hello cash

Matt and I are members of the cashless society, swiping a credit or debit card for nearly everything we buy. Cash burned holes in our pockets. Others hoarded their money, paralyzed by the fear they would run out. One guy cheated and kept his debit card.

Feeling money leave your hand is the key to trying to understand why you spend the way you do, Hayden said. For many, credit simply doesn't feel real. "That pretend money is leveraging your future," she said.

Many couples calculated wildly different figures for individual needs _ haircuts to happy hour. Mine was $265 a month; Matt's was $150. This is our new monthly individual spending. Hayden says equal is not necessarily fair. I agree. Whatever the amount, we had to agree not to micromanage the other's spending.

Our homework: Come up with dollar amounts for escrow accounts, essentially different savings accounts _ one for occasional, mandatory expenses such as property taxes, the other for optional expenses such as vacations. Then balance the budget.

Putting it all together

We're nearing the end and Matt and I still miss our plastic. Costco with cash is no fun. (I had to raid my parking meter quarters to afford the total.) That said, it's exciting to see our credit cards without balances to pay off.

Less exciting is our new budget. All the pieces of our perfect budget came to more than $1,000 over. Hayden suggested increasing our incomes. Not an option.

We decided to compromise, one of Hayden's four couple cornerstones for a healthy relationship. (The others: commitment, respect and trust.)

Reluctant to reduce our savings, we pared down monthly fixed expenses, downgrading cable (Matt agreed to give up HBO) and chopping in half our account for home improvements and vacation (I'll live with a chain-link fence another year).

This made the next project _ brainstorm your life goals no matter the cost _ equal parts exhilarating and depressing. It's fun to think about life without financial constraints, but not when we know just what our financial reality is.

Our goals ran the gamut. Matt's: "Swim in the ocean." "Become a one-car family." Mine: "Save for the kids' college."

With two full-time jobs, small kids and a dog, brainstorming goals was harder than we thought. It's tough enough thinking ahead to the next week's dinner menu let alone how we want our life to be in 2017. But we took Hayden's message to heart: Put your dreams down on paper, turn them into goals, and make a financial plan to make them happen

Staying the course

I divided our savings into emergency, mandatory and optional, automatically funding them each month with the amount we decided on in class. Just recently I paid property taxes from a mandatory escrow account instead of dipping into emergency savings. Yes, I'm still doing most of the day-to-day money chores, usually when he's taking out the trash or putting a kid to bed. In six weeks we'll be swimming in the ocean. But the all-cash system? It had to go. And Matt hasn't "gotten around to" canceling HBO. Maybe "Entourage" has something to do with that.

After two weeks we stopped our weekly money meeting, although he just suggested we schedule one next week.

Matt said I'm talking less about money and he's more engaged when I do.

Although Hayden, Matt, and I agree that we probably didn't need the class, we now better understand each other's relationship with money. And that's good for our relationship with each other.

How do you communicate with your better half? Tell Kara McGuire at kara(at)startribune.com. To comment or for more stories visit scrippsnews.com