The Simple Dollar (18 page)

The challenges of dealing with money and interpersonal relationships balance on the utilization of three key ingredients: communication, honesty, and time.

For the longest time, my biggest obstacle to financial success was simply discussing matters with Sarah. Money was the most uncomfortable subject between the two of us—every time we discussed it, even with the best intentions, one of us wound up very upset. So, for years, it was a complete taboo topic outside of the functional “Did you pay the electric bill?” type question.

When we finally sat down and had a real financial heart-to-heart, it was revelatory. We realized that we were on the same page on a lot of things, and that in our own separate ways, we were making many of the same mistakes.

Time and time again, I’ve found that communication problems in a relationship are often like water backed up behind a dam. If nothing is relieved, pressure builds up and results in an explosion—painful for everyone involved. However, if communication of one’s feelings and ideas in a safe environment without retribution becomes a normal thing, the pressure is relieved and life flows forward like never before.

Here are six key points to consider when talking about money with your partner:

1. Check your emotions at the door.
   When you talk about money honestly with your partner, it’s going to hurt sometimes. Getting overly emotional or angry solves nothing—it simply creates new problems. If you find yourself getting angry or upset, stop the conversation. Call a time-out and come back to the conversation later.
   
2. Focus on goals.
   Ask your spouse when he/she wants to retire and what he/she wants to do after retirement. Ask what his/her dreams are—where would he/she like to be in five years, or ten years. The point is to think positively about money by asking where it can get you.
   
3. Look the other person right in the eye, and hold his/her hand.
   No matter how egregious the mistakes of your partner are, avoid giving any sign that you are anything other than compassionate and loving. If your partner is admitting a major mistake, it likely means that he/she is summoning a great deal of courage to do this—and by reacting with anger, you’re encouraging him/her to not trust you with future issues.
   If/when your spouse admits to overspending, don’t blow up at him/her. We live in a consumerist society that is designed to push our buttons and trick us into spending. Even worse, it’s a pattern that’s very difficult to break—it’s a very socially acceptable addiction.
   
4. Look at numbers.
   Don’t talk about your
   impression
   of your money situation. Get out the papers, go through them, and create a real picture of your financial situation.
   
5. Create goals that you both agree on and develop a written plan to reach those goals.
   Often, the difficulty that people have in terms of working toward goals in a relationship isn’t the absence of goals. Quite often, both partners have individual goals that they’re working toward; however, these goals often are incompatible with the goals of their partner.
   Each of you should make a list of the goals you’d like to reach, both in the short term and in the long term. Then, find the ones that mesh together and agree to work toward them. For example, my wife and I are both interested in eventually moving to a home in the country with access to basic farming and woodlands, so we’ve made that one of our primary goals, and we now think of our spending in terms of this goal.
   Once you’ve identified some common goals, spend some time figuring out how you can get there. Do you need to cut down on the Starbucks visits? Does your spouse need to spend less cash on authentic baseball jerseys? Each of you needs to be willing to make some sort of sacrifice to reach the goal, and if you’re initiating this, you should be the first one to offer up something.
   From there, write down the goal on paper, along with the steps that you’re both willing to take to achieve it, and have both people keep a copy of this document. Writing down a goal and a plan to achieve it makes it tangible and real, separating it from merely talking about it.
   
6. Talk about money regularly.
   I am a big fan of a monthly family meeting about money issues. Doing this is a great way of ensuring that both partners are taking action toward achieving the goals they share (as well as their individual goals) and that individual problems are dealt with quickly and efficiently.
   

Of course, communication about money (or anything else) isn’t useful if it’s underlined with the second key ingredient of a successful relationship.

No one is proud of mistakes, yet they’re a basic part of human existence. We all make mistakes. We all fall flat on our faces. We all make choices that fly right in the face of our goals. We do things that undermine the relationship we have with the people we cherish the most.

Because of this shame, it’s human nature to want to hide our mistakes from everyone, even the ones we love the most. Yet, quite often, our mistakes negatively affect the ones we love. We made some bad spending choices and now we’re taking money away from the dreams we share. We jumped on a great investment opportunity that fell flat on its face. We signed up for a credit card secretly to buy Christmas gifts and managed to charge $18,000 on it.

These mistakes affect the people we care most about, and yet often we continue to hide them, hoping that we can somehow fix the problem before anyone else has to know about it. Quite often, though, it’s far harder to solve the problem on our own and, eventually, our partner finds out. Our deception is revealed, and the problem is substantially worse than before, threatening the very fabric of our relationship.

Honesty is the solution to all of these problems. Simply confessing your mistakes to the people who are
affected by them and asking for their help in fixing the mistake not only retains and reaffirms the trust in the relationship, but also finds you with a helping hand toward fixing the problem.

Being honest about your mistakes also creates a standard of honesty for your relationship. By being honest and straightforward, you encourage those around you to match that standard.

In
Chapter 4
, “The Power of Goals in a Random World,” I pointed to statistics from the Department of Labor that indicated that the average worker in the United States spends just over fifty-six hours per week at work. Add in time spent for sleep, commuting, and personal activities, and it turns out that the people with whom we spend the most time in a given week is our coworkers.

To put it simply, the demands of our daily lives often takes away most of the time we have to devote to the relationships in our lives that matter the most. It is those relationships, built up over time, that provide much of the value in our lives.

Time is the one resource that can never be bought back. Once the moment has passed, it can never be reclaimed. Your son’s first step. An evening on the porch with your wife and a bottle of wine. Your daughter’s piano recital that she’s practiced for months. A slow dance beneath the moonlight. These are the experiences that we work so hard to preserve—and yet in
that hard work, they often slip through our fingers. We leave town on a business trip and miss our son’s first word. We simply can’t make it to the recital because a client is in town. We’re too tired to dance with our husband and hold him close.

What are we sacrificing to earn a little more money?

After all, not getting that promotion might mean that you have to wait a little longer to upgrade your stuff, but no amount of money in the world will get your daughter’s first loose tooth back. Establishing a firm financial foundation ensures that your job is not your master and that you’re free to decide for yourself what’s most important to you.

Ask yourself this: Do you like your mortgage company? Do you have a close, personal relationship with your credit card company? Do you love the loan officer down at the bank?

Most of us would be quite happy to not have to deal with these financial entities. These financial arrangements cost us thousands of dollars in interest and deliver a nice healthy bill to our doorstep to be paid each month. There’s little love lost between most borrowers and most lenders.

Look at it from their perspective. If you pay your bills on time, you’re nothing more than a useful number in a database. If you don’t pay your bills on time, they have to start harassing you in various ways to get the money that is theirs.

Does this sound like the type of relationship you want to have with your family and friends? In its simplest terms, this is the exact arrangement you agree to whenever you make the choice to loan money (or to borrow money) from someone you have an established relationship with. Your relationship goes from a familial bond or a friendship into a lender-borrower relationship, with all of the negativity that goes with it.

If you lend someone money and they fail to pay it back, you begin to feel some serious strain in the relationship. Should you confront them or should you just let it slide? The pressure builds up over time and the acid corrodes the previously-existing good relationship. The same thing happens for the borrower—they begin to feel guilty about the money left unpaid and begin to avoid the lender.

There are three simple solutions to this conundrum, as follows:

1. If someone you care about owes you money, forgive that debt.
   Do it right now, before it has the chance to damage your relationship even more. If you’re still left with hard feelings, chalk it up to a negative experience and move forward with life.
   
2. If you have a desire to lend money to someone you care about, make it a one-time gift.
   Yes, we all want to help our friends in need, but lending them money often results in damage to that relationship—one that’s obviously valuable enough that you’re willing to lend money. Find ways to help them that do not result in a lender-borrower relationship, because that type of relationship ends in heartache.
   
3. Don’t borrow money from family or friends.
   If you’re in a financially difficult spot, it’s fine to ask your friends for advice, temporary living space, or a helping hand. Just don’t ask them to lend you money because, merely by asking, you put them in a difficult and unfair spot. Instead, seek their advice and help in other ways.
   

There is no better day than today to get the important relationships in your life in better shape. These relationships are central to who you are as a person and form a big part of the foundation for your personal success. Here are five steps to get started on right away:

1. Set aside some time to talk to your partner about money—and about life.
   Set aside an hour one evening to talk about the goals you share, then go through your entire financial state and determine where you are and what you need to do to accomplish those goals. Don’t be surprised if such discussions bleed far outside this hour—and relish those discussions, as they’ll become the foundation of your financial future together.
   
2. Recognize that your partner is human and makes mistakes, just as you do.
   We’re all human. We all make mistakes. Getting enraged at your partner’s missteps does nothing at all to solve the problem—it just makes it worse. Put yourself in your partner’s shoes—if you had made a financial mistake, would you want to admit it if you knew your partner would go into a snarling rage? Instead of reacting with pure emotion, react with compassion and look for solutions to those problems.
   
3. Confess your mistakes to your partner and work with your partner to fix them.
   Just as your partner is willing to admit mistakes and seek solutions, you should be willing to do the same. Admit your mistakes, bear the emotional response to them, and work with your partner to come up with a solution to these mistakes. Only by working together can you come up with a truly effective solution.
   
4. Forgive the debts and misdeeds (financial and otherwise) of those who we care about and attempt to re-establish a connection with them.
   A past mistake (often on both of your parts) is not worth destroying a valued personal relationship over. Step back and ask yourself what’s really valuable here.
   
5. Set aside focused time to build (and rebuild) the relationships most important to us.
   Call your parents. Spend an afternoon with your kids with the cell phone off. Take a few days to go visit your sibling and his/her family. Call up an old friend and ask them to lunch. These core relationships are a big part of what we work so hard to maintain and protect—don’t allow them to wither on the vine. Distinguish between what’s “important but not urgent” and what’s “urgent but not important”—and choose wisely between the two.