Managing money in a relationship during tough times

Conflicts over money are one of the leading causes of friction and divorce in a marriage. Couples already vulnerable to money battles are finding themselves fighting even more in the stressful aftermath of the terrorist attacks and the weakened stock market and economy. Here are some suggestions for successfully managing money in a relationship during these tough times.

Create a shared vision for your money

Start with how the two of you envision your lives together. Do you want to buy a home, have children, retire at a certain time and place, take expensive vacations, start a business? Your goals determine how you need to manage your money, and the more you can clarify and agree on those goals, the more it will go toward ironing out money management differences. Prioritize your goals and focus on the most important ones first.

Examine your own money personality

It's common for couples to differ in their individual attitudes toward money -- one spouse might be a spender, the other a saver. How do you view and value money: a means for power, freedom, security, an end in itself? Do you spend money when you're depressed, or to celebrate? It's difficult for couples with dramatically different attitudes to meld into a shared attitude. But by exploring and discussing each other's attitudes toward money, you stand a better chance of accommodating those differences and reducing conflicts.

Joint and separate checking/savings accounts

A common suggestion from financial planners is for couples to have joint checking and savings accounts, but also their own checking or savings accounts. The couple uses the joint accounts, perhaps funded in proportion to each person's income, to pay mutual expenses such as food, clothing and shelter.

The separate accounts -- funded realistically so as not to drain from mutual needs -- allow each spouse to spend according to his or her individual attitudes. A spender could spend away (agreeing not to touch the joint account), while the saver could sit on his or her money. However, you should still be financially accountable to each other on a periodic basis.

Manage money together

Write bills and budget together. Sit down weekly to discuss mutual financial decisions, and periodically review overall finances. One person may be more adept at finances and do much of the work, but the other spouse should at least be involved and understand what is being done. Educating yourselves about finances will make this easier.

Managing money together not only reduces conflict, it provides a valuable bonus should the lead money manager become incapacitated or die. The partner then is more readily able to step in.

Put your financial house in order

Money conflicts often arise out of anxiety or severe financial difficulties -- unemployment, a declining market, catastrophic medical expenses, a death in the family. By putting your financial house in order, such as building a cash emergency fund, diversifying your investments, and being properly insured, you can reduce or even eliminate the impact of these potential or real financial problems.

Resolve investment conflicts

There's nothing like a declining stock market to exacerbate conflicting investment styles -- the spouse who doesn't want anything riskier than certificates of deposit saying "I told you so" to the spouse who invested heavily in tech stocks. Again, understanding your money personalities and clarifying your financial goals will help minimize your clashes.

Some financial planners discourage couples from splitting their portfolio into individual accounts, but sometimes it is the only practical way when investment styles clash. It may be the best choice in cases where each person brings sizable investment accounts to a marriage. An alternative is to have the risk taker establish a small "play money" account -- perhaps no more than 5 percent of the couple's portfolio -- for those higher-risk investments.

Seek professional help

Start with a financial planner who can help clarify your goals, establish an investment plan, organize your finances and help you examine your money attitudes. However, your money conflicts may reflect deeper problems with money (such as gambling) or even issues that may have nothing to do with money. For these issues, you may need to see a professional therapist.

Whatever the conflicts and their causes, it's critical to attempt seriously to resolve them. Otherwise, you may find your finances in disarray and your marriage in trouble.

Wm. Gerry Keene III, CFP, RFC, is a certified Financial Planner practitioner with Keene Financial Group in Cape Girardeau. He is a registered representative offering securities through FFP Securities Inc., member NASD/SIPC, and a registered Investment Advisory Agent offering services through FFP Advisory Services Inc. (1-800-827-1929, 33KEENE 335-3363 or )