Overcoming Challenges in Their Marriages with Money

Posted on November 11, 2015 by Tim Mann, One of Thousands of Money and Finance Coaches on Noomii.

Stewart and Samantha were at their wit’s end with each other when dealing with money in their relationship. With poor communication skills and the frustration over lack of clarity where the money was going every month their relationship was growing apart. The tension and stress had escalated to the tipping point where they needed to seek outside help.

Stewart and Samantha had been married for 20 years. They started with nothing, as most couples do, and brought eight children into the world, purchased an upscale home and sent their kids to private schools. Stewart was well educated, highly intelligent, and worked for a Wall Street firm bringing in a big yearly salary. Samantha was a stay-at-home mom raising the Brady bunch plus two. She was constantly on the go driving kids to school, feeding their empty stomachs, attending after school activities, and spent quite a bit of money on keeping the household running. She was not involved in the finances and relied on Stewart to handle them. To keep things running she had a credit card in one hand and a kid in the other hand with little awareness what she was spending money on.Stewart’s goal in entering the Couples Finances Coaching program was to put an end to the tension, gain a handle on knowing where all the money was going each month, and start saving money. With Samantha, she wanted to get a grasp on what Stewart was thinking she should be spending each month to keep the house running.Here are the challenges they were facing:

Challenge #1: Lack of clarity where the money was going.

Challenge # 2: Borrowing money to survive.

Challenge # 3: They were not on the same page when it came to putting money towards what was important to them.

I would like to show you this couple’s marriage challenges when it came to money and how they were able to start the process to overcome the problems money was creating.

Overcoming Challenge # 1: Lack of Clarity

As you find in most households there is simply a lack of clarity when it comes to knowing where the money goes each month. A Gallup poll released showed that two-thirds of Americans do not budget. This was the same with this couple, which was causing a domino effect on Challenges #2 and #3. With eight kids, paying for a nanny, and living in an upscale neighborhood it definitely was a big family operation requiring a huge outlay every month. First things first they needed to patch up the holes on wasteful spending that were causing them to have more month than money.

To get them started, I sent them over a budgeting spreadsheet that they could use as a template to create their own budget. Since Stewart was a numbers guy and in the world of finance, he created their first budget on the home computer. I then advised Samantha to go on an all-cash system using what is called a cash envelope system to gain better clarity on what she was spending money on. I also walked her through several actions steps, so she could get a better handle on the daily expenses without feeling completely overwhelmed with the process. (If you would like more information on how to use a cash envelope system feel free to email me at tim@couplesfinances.com and I will send you over a Quick Start Guide).

Once they got their feet above water by doing a couple month’s worth of budgeting, having regular money talks, and by working the envelope system into their lifestyle, they were ready to tackle their other challenges.

Overcoming Challenge # 2: Borrowing money to survive

As I mentioned Stewart was bringing in a nice income. One of the problems was that sixty percent of the money was tied to bonuses. Depending on his performance, the income fluctuated, so they did not know specifically what the take home pay from the bonuses would be. The other problem was they were constantly experiencing a cash crunch since they were spending as though they already had the money from the bigger bonuses. Since they were running short on cash several months out of the year, Stewart’s current strategy was to borrow money from his 401k account and then pay the money back when he cashed in his bonus. I advised him to break this risky habit and start working on controlling the spending. Why would I tell him this? What would happen if he lost his job, got laid off or moved to another firm? 401 (k) rules are not in your favor when borrowing. This is why: If you have taken out a loan from your 401(k) retirement savings and then quit or lose your job, you must repay the loan, typically within two months. If you can’t repay the loan, it will be treated as an early withdrawal and depending on your age, you could be hit with a big tax bill and a penalty. Although Stewart was reluctant, he could see my point.

By breaking this one habit of borrowing from the 401 (k) they were able to stop the expenses that were just happening to them. The Barnes and Noble, out-of-control cell phone usage for the family, the 500-station cable package, the Starbuck’s runs every day, movie rentals, iTunes and the myriad of other expenses they could do without.

Overcoming challenge # 3: Getting on the same page

In the first few sessions, it was apparent that Samantha was struggling with being on the same page with Stewart about certain expenses, most notably the kid’s education. You definitely could see a divide because they were sitting far apart from each other. In addition, a few times you could see tears streaming down Samantha’s face. This was the moment of truth in their relationship, it was time for them to reunite and work toward an agreement on where the money should go.

The process I use to get couples into agreement is an exercised called “What is Important to You.” With this exercise I give each person a list of thirty different items to choose from that they might consider important to them. They have the opportunity to choose six of those items or they are free to come up with their own. The goal of the exercise is to find out what matters to them most and choose the items that are most important in their relationship.

Through several heartfelt discussions, they realized that having a vacation home meant more to them than sending their kids to the private schools that were draining their wallets every month. They felt that the vacation home would provide an unparalleled bonding experience for the family. They would be sharing new and exciting experiences with their kids and connecting in ways that few other events could allow. They wanted to leave everlasting memories of seeing their kids grow up. This was much more important to them than what an expensive private education could bring to their kids. They started dreaming together again about having a lake house and a plan to make it happen in a few years. What I saw take place was really remarkable. During the latter sessions with me, they were sitting next to each other, smiling and laughing. Thus, they reestablished their bond with one another. So, this couples’ moment of truth was the lake house which meant family, connection, legacy, vacation, relaxing, and lasting memories for the entire family.

I have shared with you another story on how a couple went from struggling in their relationship when it came to money. By getting a handle on their expenses, stopping the habit of borrowing money to stay afloat, and digging deep by finding what mattered to them the most, this couple was able to eliminate the tension in their marriage. They found the clarity, which is one of the C’s in Couples Finances. The clarity was not in just finding the numbers in their daily expenses but where they should focus on putting their money. Now they have a plan in place to experience their happily ever after.
Footnote:

In the Couples Money Program, there are four C’s:

Commitment
Clarity
Communication
Consistency

If you live the four C’s in your relationship, it produces the 5th C of Calm.