NEW YORK, N.Y. - As a financial planner, Jeff Motske has spent 26 years helping couples navigate one of their most contentious and emotional issues: money.
The investing of it. The saving of it. The spending of it. Finances can be a big, breakup-level deal at any stage of a relationship. That's why Motske believes more people need to know each other intimately — financially speaking — before walking down the aisle.
"Both people need to be involved in the finances, whether they like it or not," he said in a recent interview. "There's so much hiding. Hiding of debt. Hiding of spending."
Motske, in Orange County, California, has rounded up anecdotes, interviews and tips in a new book, "The Couple's Guide to Financial Compatibility," out in March from Da Capo Lifelong Books:
AP: How widespread is the problem of couples not communicating openly and honestly about money?
Motske: It's a huge problem. Many couples choose not to talk about money, versus all the other sensitive topics, and if you don't talk about it, you're more than likely going to start fighting. It leads to really stressful relationships.
Financial discord is among the largest causes of divorce. One study says couples who fight about finances once a week are 37 per cent more likely to get divorced than couples who rarely argue about finances. Those who fight daily are 69 per cent more likely to get divorced compared to couples who rarely fight about money.
AP: Tell me about your War of the Wallets Quiz. Why did you create it and what should be the goal of taking it?
Motske: The quiz is the door opener to start communicating and solving problems. There are a lot of different areas of life that couples never even think about.
A great one I had recently was a couple came in that had been married for 20 years and one of the questions on the quiz is about elder care, if all of a sudden mom couldn't take care of herself any more. One spouse said, 'That's easy. Mom would move in with us' and the other spouse said, 'No way that's happening.'
Another huge one on the quiz is retirement. Most couples can't even agree on what date they want to retire let alone talk about what retirement looks like.
AP: What's the biggest mistake couples make in not planning their financial futures?
Motske: It's the savings versus spending battle. Unfortunately too many Americans have huge debt problems. About $1,500 is the average per household outstanding credit card balance for those in debt. Student loan debt is prevalent. In most cases spending is more unconscious than conscious because they don't track their expenses. They don't have a budget. Seventy per cent of American households don't have a budget.
Look at your credit card statements and use three different highlighters. Use one colour to highlight all of your necessities like gas, groceries. The second colour is the like-to-have type category and that's more of your entertainment and gym memberships. The final category is what I call the stupid, frivolous expenses.
It's shocking how many people start coloring their credit card statements with that last category because credit cards are an emotional swipe and it's done. That has helped couples a lot. That one exercise gets couples to see their conscious and unconscious spending.
AP: In what ways do couples not fight fair about money? What's your best advice for staying on the right track?
Motske: It's where one person feels like they can splurge because they got this big bonus and it's kind of a power, control-type issue, and the other one resents that deeply but doesn't say anything and it builds up. Many couples have a mental financial scoreboard and they keep hurting themselves because it builds and builds and builds.
I was just reading a report the other day. Experian had a marriage survey out and this is really strange to me: It said the average guy will spend $1,231 before discussing it with their spouse and the average woman will spend $396. That is a huge disconnect, that there should be that big of a disparity in a relationship.
They just don't work together a lot of the time. Once a month go on a financial date night, where you can sit down and openly discuss your goals. You'll be amazed how it can transform a relationship. Get it all out on the table in a safe environment.
AP: How do you suggest teaching kids about money so they can avoid friction later with life partners?
Motske: Your kids watch you and how you spend money. The earlier you start teaching them about money and saving and spending and credit cards, the better off they're going to be. Just giving them money all the time isn't going to get that done.
One person I interviewed for the book doesn't use allowance but uses a job board, where the kids apply for certain jobs and get paid for that at the end of the week. If they don't apply, they don't get paid. I think it's cool to think of it that way. If you think of it from an employment perspective they're going to start to understand how to apply for things, how a paycheque works.
Allow them to make decisions rather than just handing over entitlements.
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