Money & Relationships-Make it Work!

“I’d marry again if I found a man (or woman) who had fifteen million dollars, would sign over half to me, and guarantee that he’d be dead within a year.” Bette Davis

 You gotta take relationships with a bit of levity or you’ll never make it through! This quote is the perfect solution for money and relationship problems. Unfortunately, it’s a bit unrealistic. Maybe a million or two is more doable.

No really, read on and find out how to handle money stress in a relationship.

MAIN TOPIC: She’s a Saver, He’s a Spender

This article is the 3rd in a series relating poor money behaviors with stress (#1-Shopping to Solve your Problems & #2 Procrastinating Dealing with Financial Matters). The topics are inspired by an article entitled Emotions, Money, & Financial Stress by Nancy Losinno, published at the US Department of Energy, Brookhaven National Laboratory website. 

You know who I’m talking about. Bluetooth came out, he got it. Iphone, Ipad, flatscreen TV, etc. he bought them all. New car every few years was required by him. Meanwhile the debt piled up. She tried to save, but his spending counteracted all of her efforts. 

I’m hesitant to continue, as the story is so familiar. We all know how it turns out…… fighting, stress, anger, depression, marital discord and DEBT.

Overspending in a relationship is unhealthy whether practiced by one or both partners.

Losinno clearly stated, that in a relationship the partners have the choice of creating WEALTH or a “FINANCIAL HELL ON EARTH.” Money secrets are devastating. Unhealthy family money attitudes can be disastrous. Money problems in a relationship can be the beginning of the end.

PRACTICAL APPLICATION: Get Real and Slam the Debt

It’s helpful to choose a partner whose money style is similar to yours. I am really lucky, el carino and I have very similar money habits. Neither of us is extravagant nor strives for extravagance. I probably shouldn’t tell you this, but…. since our 5^th month together, I have handled almost all of the financial matters (not all the decision-making of course) for the family, and that has worked out really well for us. Obviously, I am not recommending this alternative for others, but it’s suitable for our family.

PROBLEM 3: MONEY & RELATIONSHIP TROUBLES

Lack of communication in money matters is a big problem. So is a difference in money attitudes. The problems that arise from money secrets and mismatched money attitudes can be corrected.

SOLUTION:  

1. Discuss money issues with your potential or current partner.
2. Come clean. Lay it all out on the table.
3. Together, list your debts and spending secrets, even though it is hard. If you can’t do it alone, see a counselor or Employee Assistance Program (EAP) specialist (through work).
4. Schedule money talks regularly.
5. Make an agenda and list you financial issues.
6. Devise a plan to get rid of credit card debt.  Stick to the plan.
7. Make a budget or spending plan.
8. Find a middle ground for spending & saving that works for both of you.
9. Look for low cost alternatives for the spendaholic; a new CD instead of a new MP3 player.
10. Check out Oprah’s Debt Diet. After all, isn’t Oprah known for access to the best of everything?
11. Start small, make a small money goal to start. Then reward yourselves with a “free” prize. i.e. a picnic in the park, a TV night without the kids, listening to music together, use your imagination….

Compromise, compromise, compromise 

ACTION STEPS:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

•  Continue to talk regularly and honestly about your money problems.
• Motivate each other to spend less and look for ways other than spending to enjoy life.

“I’d like to add that negotiating is not something to be avoided or feared – it’s an everyday part of life.”

Leigh Steinberg

American businessman and author summarized the importance of negotiation beautifully. Learn to negotiate, embrace it, and up your wealth and life satisfaction. Through negotiation you get more of what you want out of life!

MAIN TOPIC

There is hardly a consumer situation I’ve encountered that wouldn’t benefit from a little negotiation. Just got a call from the mechanic looking at my 1998 SUV with 100k miles. He had the nerve to tell me that my timing belt needed replacing. On an old car, that shouldn’t come as much of a surprise, unless- I had recently replaced the timing belt.

I went to my records and found that I replaced the belt 10,000 miles ago.

I didn’t remember the manual suggesting that the timing belt needed replacing  every 10,000 miles.  So, I asked the mechanic, “How long is the timing belt supposed to last?” 

He replied, “About 60K miles.”

In a matter of fact and cordial tone I mentioned, “You just installed a new timing belt about 10,000 miles ago; since the average life span is about 60,000 miles; I’m unwilling to pay for a new one. As you know, I have used your company exclusively for the past 6 years. What can you do for me?”

Consider what an acceptable outcome is. For me, I had in my mind that I would be willing to split the cost of the repair with the company. Additionally, I was also willing to go to another mechanic if they would not stand by their work. I had nothing to loose.

As I expected, the auto repair company agreed to cover the cost of parts, about $500.00 for the timing belt and accompanying parts, and I paid about $350.00 for the labor.

$500.00 savings, not bad for 10 minutes of my time!

PRACTICAL APPLICATION

Anything is negotiable.

The absolute worst result is “NO.” The best result is free. Somewhere in between is frequently where you end up.

The best negotiation is one in which both parties leave satisfied! Consider a reasonable outcome and work towards that outcome. The more you negotiate the more money you have to spend on other things or save!

NEGOTIATION IS NOT DIFFICULT, BUT LIKE ANY SKILL, REQUIRES PRACTICE.

Use these steps as a blueprint for your negotiations.

Negotiating Steps:                         

1. Gather information first.
2. Set acceptable outcomes in your mind.
3. Let the company know what a loyal customer you are.
4. Use the information and integrate it into a request. ASK FOR WHAT YOU WANT.
5. If necessary, state your other options to the vendor.

ACTION STEPS:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

Negotiate something today. Practice with your son, daughter, husband, wife, boss, co-worker, or anyone you are dealing with.

Then practice again tomorrow. The more you negotiate, the more you get what you want!