Photo courtesy of the Starr family
Julie and David Starr have always had their money differences.
David was working as a TV producer in New York when the couple met in 1998. Being 10 years Julie’s senior, he took retirement savings seriously, and had already squirreled away a sizable nest egg.
“David grew up in a household where there was a lot of anxiety about money,” Julie, 49, says.
She, meanwhile, worked at a not-for-profit and was studying to be a nutritionist.
“I didn’t have anything saved,” Julie, who is now a real estate agent in Western Massachusetts, where the family lives, says. “I grew up in a middle-class family, and I just figured everything would be fine.”
Julie describes herself as a spender; she has a weakness for fashion. David needs a nudge to buy himself a shirt, she says. He also raised money concerns when they discussed having a family; they now have a son, 14, and a daughter, 11.
Says Julie, “He was always saying, ‘What if you can’t support your children?’”
Few subjects can cause as much tension in relationships as finances. In an online survey by the National Foundation for Credit Counseling, 47% of respondents said money disagreements were most likely to cause the greatest stress in their relationships.
Discuss your finances early on
Because there are cultural taboos around money, discussing it may not be easy for many couples.
But sharing this information early on creates a climate of openness that can help you avoid a real relationship killer: financial infidelity — that is, telling lies about your spending habits, which about 20% of people in relationships admit to, according to CreditCards.com Opens in new window.
Early on, it’s important to bring the financial dialogue into the open. While there’s no need to come to the first or second date with credit scores and bank statements, don’t wait too long to discuss your family’s economic background and how money was managed in your house. Talk about the lessons you learned and the ones you didn’t.
When the relationship gets serious, and certainly if there is talk about living together or getting married, it’s time to tell all.
Reveal what you own (savings, property and inheritance, for instance) and what you owe (credit card debt, student loans and so on). Sharing credit scores is important, too. A credit score is a snapshot of financial health, and revealing this helps you avoid surprises.
Acknowledge your different backgrounds and personalities
As the Starrs demonstrate, upbringing and life experience can create money differences. In the most extreme cases, one person’s spending may be so extravagant that it can cause financial instability.
David’s reluctance to spend even spilled over into a seemingly wise financial move. When the Starrs’ children came along, David didn’t want to get life insurance.
“I forced him to get [it],” says Julie. “We had two small kids. There was no way I was taking that chance.”
Having a life insurance plan helps assure that some of your family’s financial needs will be taken care of in the event of your death. Taking steps toward protecting your family’s financial security in the event of a tragedy can certainly make it worth making those premium payments.
Understanding each other’s spending and saving habits can take time, and requires a commitment to tackling the issue early on. It can continue to lurk in the background if not addressed.