When it comes to relationships, "establishing economic compatibility is as important as knowing whether you are both dog people," writes Siri Agrell in today's Got an RRSP? Then it's a date!.
Financial cards should be laid on the table during date No. 1, according to Lois Vitt, co-author of the new book You and Your Money: A No-Stress Guide to Becoming Financially Fit. "You should start asking questions and comparing notes and if there's any tendency on the other person's part to clam up, you've got a problem," she says.
Ms. Vitt adds that romantic relationships are 80 per cent business, and says that if you can't talk about money "you have a terrible relationship."
Ms. Vitt was online earlier today to take your questions on the role of money in relationships, plus all other things financial.
Your questions and Ms. Vitt's answers appear at the bottom of the page.
Lois A. Vitt, MBA, Ph.D., is a co-author of You and Your Money: A No-Stress Guide to Becoming Financially Fit, recently published by Financial Times Press.
She is founding and research director of the Institute for Socio-Financial Studies (ISFS), Middleburg, VA.
She directed Personal Finance and the Rush to Competence: Financial Literacy Education in the United States, for the Fannie Mae Foundation, and Goodbye to Complacency Financial Literacy Education in the United States 2000-2005 for AARP.
She is Editor-in-Chief of the Encyclopedia of Retirement and Finance and author of books and articles about the social psychology of housing and personal finance.
Prior to ISFS, she was a financial securities principal, real estate syndicator and an executive in financial services companies.
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Rasha Mourtada, Globe Life web editor: Good afternoon, Lois, and thanks so much for coming online to take reader questions. Why is money such a hot button issue in relationships?
Lois Vitt: Good afternoon Rasha, I am happy to be here.
Depending upon how we grew up, most of us weren't socialized to discuss money. Parents often hid what they earned, talked behind closed doors about financial problems, and unwisely spared us from the tedium of their money management issues whether they were positive or negative.
Worse, society in general has regarded personal financial issues as "forbidden" until fairly recently. To change people's saving and retirement behaviours so they would accept the new pension models, financial education initiatives were started only about 10 years ago in the workplace. That's when it started to become okay to talk more openly. Educators at work, in faith-based organizations, in communities and schools were motivated to help people save. But they soon discovered that issues were buried very deep and it wasn't all that easy. At least we are starting the process, however.
Larry Robinson, White Rock, Canada: Ms. Vitt- a former economics professor and friend repeatedly told me at a young age that marriage was, and will always be, a property relationship. A couple of botched marriages have taught me that the finances must be totally open, complete with long range plans, before true uninhibited love is possible. I believe that partners need not have the same goals, simply be honest about their goals to the other partner. Your views?
Lois Vitt: Finances, like all difficult issues in life must be open. Partners can have different goals, however, and even different ways of handling money and finances and still find true uninhibited love. The trick is to talk openly, honestly, and often, and compare your dreams and aspirations. Then, and only then, can partners accommodate and negotiate so that they can get as close as possible to sharing values and bringing about one another's dreams as well as their own.
R.D., Toronto: Is it bad for one person in a couple to be mostly in charge of financial stuff? In my relationship, we certainly discuss our finances openly, but my partner is much better at paying bills and keeping track of finances, so he mostly takes care of that. I realize it's maybe not so P.C., but is that so bad?
Lois Vitt: No, not at all. Discussing your finances openly is key. You and your partner are wise to have him take care of the bills and track finances as long as you both understand what is happening in your financial lives. Here's a question for you though: how do you know you are not very good at finances if you don't roll up your sleeves and try? Once in a while, perhaps, you could give your partner a break and take over--then let him supervise the results. You might be surprised that you actually LIKE handling the responsibility and that the shared experience turns out to be fun.
Rasha Mourtada: Lois, how do you suggest that couples with a real disparity in income handle their finances? This can obviously lead to issues of resentment -- on both ends. Should couples simply pool all their money and work as a unit or is it better to maintain some separation?
Lois Vitt: Couples must create their own "internal" financial plan before they can budget or plan for the future. Just like a business must decide who, how, when and so forth, receipts are to be handled, bills paid, etc. Each couple should decide whether and how they want to handle financial management. Some are comfortable pooling earnings and other income; some are not.
In the "Social Meanings of Money," Viviana Zelezer talks about different mental accounts: for entertainment, bill paying, vacations, education, saving and investing. Your money can be managed as his, hers and ours, or ours, it is really how comfortable the couple is.
If they are not comfortable, if resentment really is there, it is not about money but about rivalry between partners, competition, or feelings that are stuck in some other personal area. Find out what those feelings are and get them unstuck. Learn what is really going on and then the finances will be much easier to handle no matter who is earning what.
P Comeau, Ottawa: Hi, My husband and I have been together for more than a decade and our financial situation has just changed dramatically. I'm a stay-at-home mom (I work part time) and he works full time. Things have been financially very, very tight for years -- we have two small children -- and our lifestyle has come to reflect that. He was formerly a spender - I've never been one. His mother died recently and we are now financially secure and even have some cash. I'm finding this all a bit frightening -- and wonder what advice you can give on managing this kind of transition.
Lois Vitt: Hi. Protect your need for financial security now that you have it. Declare your fears openly and often until you know they have been heard and honored by your husband. Plan a way that he can feel free to spend a little now that he has money and try to be generously disposed--up to a point that is. You have children to educate and retirement to plan for. Use this precious time of feeling financially secure to build upon that security for your future and your family's future. Congratulations on having a breather--sounds like you sacrificed in the past. Now that you can enjoy life more, I'm hoping you can feel more comfortable, but that will happen with time, patience, and the ability to plan diligently for your later life together.
D Mores Toronto: I recently had a relationship breakup, and I think it could be considered, in part, finance-related. How does one share financial values and anxieties thoughtfully?< We could tell that we had similar values about saving and spending, and we complemented each other in our investing and lifestyle approaches. Unfortunately, through the whole length of our relationship, I knew I was going to lose my job and I was freaking out when I found how difficult it was to find a job in my specialized field. My ex-girlfriend came from a background where losing jobs was not a big deal, and people from her culture emphasized family, and her job is in a more secure field. She just didn't feel my worries were a big deal and thought she mattered less than my career. Any advice on how to deal with that?
Lois Vitt: In my book, You and Your Money, there are a couple of chapters about how to share and contrast your deeper values with someone you care about. One short exercise assesses what it is you value most. If you and a partner both take the assessment, you can compare your values and goals. Another chapter helps you understand where you values about money and finances (and other life areas) actually originate. If you thoughtfully work through these short exercises, you will have started on a pathway to much better mutual understanding and even deepening feelings for one another.
Rasha Mourtada, Globe Life web editor: Thanks so much, Lois, for coming online today. Any last thoughts you'd like to leave our readers with?
Lois Vitt: Too often anxiety over money matters gets rationalized when we are in love, but this is romantic rather than realistic. We are really setting the stage for painful disillusionment that is as predictable as it is unnecessary. What genuine love and true commitment can do is help us establish dialogue with our partners that must include the honest expression of our money feelings.
