• Posts Tagged ‘transparency’

    Reader Question: Financial Transparency for Couples, Part 5

    by  • December 15, 2006 • Tagged: ,  • Comments

    This post is part of our week-long series on Creating Financial Transparency for Couples.

    5. There’s no unified financial plan.
    Jay cuts right to the heart of the problem when he says, “It makes it very difficult to plan our future when half of the money isn’t really visible for planning.” Jay and his wife need to create a Joint Portfolio. This Joint Portfolio should provide balance across all their retirement plans. For example, if Jay has a large share of his company’s stock, his wife could avoid that market sector/market cap size/etc in her own portfolio, thus balancing Jay’s portfolio. At the very least, Jay and his wife should be aware of each other’s holdings. Perhaps they could balance the entire joint portfolio once, then each be responsible for re-balancing their own portfolio each quarter. Creating a Joint Portfolio takes a lot of time and effort, so it should probably be a long-term goal. We are just now outlining the steps we’ll take and starting our research. Jay and our other readers can follow our progress as we go.

    This concludes our series on Creating Financial Transparency for Couples. I hope that Jay and his wife will find our suggestions helpful. It’s worth it to check out the books I referenced as well. Though they are not all specific to finances, they offer suggestions on how to communicate and set boundaries to build a strong foundation in your relationship. When you are comfortable, it is much easier to work out money issues. Best wishes to Jay and his wife!

    Other posts in this series:
    1. There are two different methods of documentation being used. (Monday)
    2. There are unclear privacy boundaries. (Tuesday)
    3. There are two different spending styles at odds. (Wednesday)
    4. No dedicated time exists for talking about finances. (Thursday)

    Reader Question: Financial Transparency for Couples, Part 4

    by  • December 14, 2006 • Tagged: ,  • Comments

    This post is part of our week-long series on Creating Financial Transparency for Couples.

    4. No dedicated time exists for talking about finances.
    Jay and his wife haven’t been able to set up a routine time to talk about finances. I’m guessing that this results in a feeling of dread every time the subject comes up. Rather, we have a routine that allows us to talk regularly about finances. Every Saturday we check the joint account balance. We review the week’s bills together and then pay them. Him uses the computer to make online payments while I hand write the date and amount paid on each statement, then I file them. Next we review the remaining account balance and decide how much to allocate toward savings and weekly spending. We often disagree, but allow ourselves to be persuaded. We discuss upcoming expenses and use a dry erase board to note any upcoming financial issues. For the big picture issues, we call a “state of our union address.” These tend to be pretty long talks where we discuss finances and other relationship issues. We try to keep it gentle and loving. I recommend Jay and his wife try setting up a time to meet weekly and also a few times a year to talk neutrally about money.

    Other posts in this series:
    1. There are two different methods of documentation being used. (Monday)
    2. There are unclear privacy boundaries. (Tuesday)
    3. There are two different spending styles at odds. (Wednesday)
    5. There’s no unified financial plan (Friday)

    Reader Question: Financial Transparency for Couples, Part 3

    by  • December 13, 2006 • Tagged: ,  • Comments

    This post is part of our week-long series on Creating Financial Transparency for Couples.

    3. There are two different spending styles at odds.
    Jay says that his wife perceives his attention to her finances as evidence that she is a spendthrift. My guess is that she probably has good reason. It sounds as though Jay may be a saver while his wife is a spender. When these are the roles you play, you are pulling in opposite directions. The key is to drop the script entirely and start rehearsing a new performance: financial responsibility. For us, this required two strategies:

    David Bach, author of Smart Couples Finish Rich, advocates creating a Value-Based Plan. Jay and his wife should develop a list of mutual values (check out ours here), then prioritize their spending to match their values. If they both value good health, then neither can argue with spending a large sum on a gym membership. A value-based plan will allow them to simultaneously spend AND save toward their goals.

    Our other strategy was to create a primary joint account (for all shared expenses) and two personal allowance accounts. We agreed on a fair allowance, and do not check each other’s allowance account statements. This gives us privacy and freedom to splurge on small items. For the joint account, we set boundaries. Neither of us can spend that money on something that solely benefits one of us without consulting the other first. I think this dual system might work well for Jay and his wife too.

    Other posts in this series:
    1. There are two different methods of documentation being used. (Monday)
    2. There are unclear privacy boundaries. (Tuesday)
    4. No dedicated time exists for talking about finances. (Thursday)
    5. There’s no unified financial plan (Friday)

    Reader Question: Financial Transparency for Couples, Part 2

    by  • December 12, 2006 • Tagged: ,  • Comments

    This post is part of our week-long series on Creating Financial Transparency for Couples.

    2. There are unclear privacy boundaries.
    Jay believes that he has a right to see his wife’s financial statements. Jay’s wife believes that she has a right to keep her financial statements private. According to Anne Kathering, author of Where to Draw the Line: How to Set Healthy Boundaries Every Day, clarifies this boundary issue. Making important decisions together promotes intimacy. Refusing to discuss important matters is a violation of intimacy boundaries. Jay’s wife could reframe this issue to see that by allowing Jay to share her financial statements, she is being intimate and building a strong foundation for their relationship. In return, Jay could acknowledge the gift of intimacy his wife has shared with him, and show her that he appreciates her effort.

    Other posts in this series:
    1. There are two different methods of documentation being used. (Monday)
    3. There are two different spending styles at odds. (Wednesday)
    4. No dedicated time exists for talking about finances. (Thursday)
    5. There’s no unified financial plan (Friday)

    Reader Question: Financial Transparency for Couples, Part 1

    by  • December 12, 2006 • Tagged: ,  • Comments

    Reader Jay has a problem:

    …One problem my wife and I have is that there is limited financial visibility into her accounts. She does everything on paper and in check registers. I do everything on-line and have a spreadsheet on our home PC that projects my finances 5 years into the future. Her contributions to the projection are fields with her name in deposit or withdrawal fields. There’s a lack of willing participation on her part because she perceives my inquiries into her finances as either a violation of her privacy or as evidence that I consider her a spend-thrift. It makes it very difficult to plan our future when half of the money isn’t really visible for planning. How did you guys get to the point where both your finances were laid out on the table? Do you have weekly meetings?

    I understand how Jay feels because Him and I had the exact same problem. Disclosing my finances to Him was terrifying and only happened after an ultimatum. Hopefully, the suggestions below will help Jay and his wife get past this without an ultimatum.

    I think this post actually reveals five issues. I’ll post my thoughts on one issue each day this week.

    1. There are two different methods of documentation being used.
    According to John M. Gottman, author of The Seven Principles for Making Marriage Work, one of the keys to productive communication is to allow your partner to influence you. Jay and his wife each prefer a different method of record-keeping. To have equal knowledge and power over financial decisions, they need to choose one system they can share. I suggest that Jay and his wife sit down and present the pros and cons of their system to each other. They could also research other systems together, such as using Quicken or Money software. They could even modify the existing spreadsheet to reflect their combined wishes. During these discussions, they need to be open to their partner’s influence. The focus should be on finding common ground, not on winning the argument.

    Other posts in this series:
    2. There are unclear privacy boundaries. (Tuesday)
    3. There are two different spending styles at odds. (Wednesday)
    4. No dedicated time exists for talking about finances. (Thursday)
    5. There’s no unified financial plan (Friday)