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Suze Orman Money Matters

Suze Orman, Money Matters

Don’t Let Money Matters Sink Your Relationship

by Suze Orman

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Posted on Friday, May 30, 2008, 12:00AM

Given that we're heading into the high season for weddings, I want to discuss your relationship.

Actually, it's a three-way conversation between you, your significant other, and your money. How you handle money is going to weigh heavily on your relationship. Just ask any divorced friends or family; it's pretty common for money issues to be at or near the top of reasons for a breakup.

But what's even more troubling are all the unhappy couples who are still together, and still fighting bitterly over money. I don't have to know you and your partner to tell you that the surest way to become closer and replace relationship stress with happiness is to get on board about how to talk about, learn about, and deal with money as a couple.

No Wishing Allowed

When people in a relationship spill the beans about some sort of money issue that's making for an unhappy partnership, it invariably takes me only about a minute to find out that the specific problem has been an issue practically since the day the couple got together. Yet when I ask why they didn't tackle the problem early on, I get the same answer: "Oh, we were so in love, and I just figured he/she would change."

Denial isn't exactly a strong tool for relationship management. Nor is simply closing your eyes to the problem and wishing your loved one will change, or will want to change. If you know there's a problem now, I guarantee it's only going to become a bigger problem later on if you don't address it.

What keeps people from talking about the money stuff is a fear of confrontation. That makes perfect sense, but why frame it as a confrontation in the first place? If someone can't see their way to having a supportive, open conversation about money habits and differences, it may be folly to think their relationship will last.

To Love, Honor, and Tell the Truth

If you're troubled by your partner's money habits, bring compassion into the conversation. My experience is that most people who don't respect money have a bigger problem: They don't respect themselves. How we treat money is symptomatic of how we feel about ourselves. If you're in a relationship with someone who doesn't handle money properly, the challenge is to create a supportive environment in which you both can take a look at the deeper issues that are manifesting themselves as poor money choices.

It amazes me how often people -- OK, it tends to be women -- tell me about some money move their partner made that upsets them or makes them nervous. Or how many people tell me they keep hidden bank accounts or pay for splurges with cash so the purchase doesn't show up on the joint credit card bill.

You want a lasting relationship? Tell the truth. Anything less is disrespectful of you, your partner, and the relationship.

Separate Isn't Equal

Don't think you can solve your money differences by keeping all your money separate, either. That's just code for "I don't trust you."

Here's my strategy for how to merge finances in a relationship. It needs to be a three-part dance of "ours, mine, and yours." First comes "ours":

• Ours is a joint checking account and joint credit card from which all living expenses are paid.

• Ours is a joint savings account in which we build up a stash equal to eight months of living expenses.

• Ours is combined long-term investments for retirement.

Apart Together

From there, move onto "mine" and "yours." These are the separate accounts each of you keeps, and are just as vital as the merged accounts.

I'm a big believer that each person in a couple should always have a savings account in their own name. I'm not suggesting that you hide it from your partner -- anything but. The idea is that once you've merged your finances, you each respect the right and need of the other to have some financial independence, too. I also think it's smart to have a separate checking account so you can each pay for your personal indulgences, be it gadgets or shoes.

Again, the idea here is that once you fully fund all your joint commitments, it's perfectly fine -- and healthy -- to divide what's left over and give your partner the freedom to spend or save that money as he or she wishes. A little separation can keep you together.

Each of you should also maintain one credit card that's solely in your name. Without that, you have no credit record that's yours alone; in the event that you divorce, separate, or are widowed, that's going to leave you in a horrendous financial fix -- you won't be able to qualify for the best rates on loans, and may even be turned down flat. You'll also find that you need to make hefty deposits to open basic utility accounts or get a cell phone in your name, and it can even impact your car insurance rate.

Stay-at-Home-Parent Rules

The calendar may say it's the 21st century, but a lot of couples are still in the Dark Ages over how to handle money when one partner earns an income and the other doesn't.

Notice I didn't write "when one partner works and the other doesn't." Raising kids meets every definition of work. To belittle it because it doesn't create income is -- here's that word again -- disrespectful.

The all-too-common problem is that an odd dynamic builds in which the stay-at-home parent thinks she (or he) has to ask for money, or ask if it's OK to buy something. The "ours, mine, and yours" strategy should keep this from occurring in your family.

If money still remains a divisive issue, I have news for you: It's not the money. Instead, there's likely a serious disconnect between the two of you about the value of having one of you  be a stay-at-home parent. Again, this needs to be honestly discussed. You both need to be open to the idea that what worked a few years ago might not work now. Given the tougher economic times we face today, the financial reality may be that your family needs both of you to earn an income.

Get It in Writing

If you have yet to marry, I strongly recommend a prenuptial agreement. For those of you who are contemplating remarrying, you're absolutely nuts to tie the knot again without carefully documenting the assets you have prior to the marriage.

Moreover, one of the most loving gestures you can ever make to your partner is to ensure that you have all the legal documents in place to make things easier when one of you becomes ill or dies. You both need an advance directive that lays out your medical care wishes if you become unable to speak for yourself. Those of you who are together but not married should also make sure you each have a durable power of attorney for health care, or a health care proxy, set up. This designates who "speaks" for you if you're unable to communicate your health care wishes. Without this in place, unmarried partners can find themselves unable to take care of their loved one.

And don't think a will is all you need. A living revocable trust that has an incapacity clause is hands-down the best way to take care of your family.

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59 Comments

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  • Jeff B - Monday, June 9, 2008, 5:18PM ET  Report Abuse

    • Overall: 3/5

    One checking account is the best method. It's both spouses jobs to monitor the money. It isn't his income and her spending. It is our money, our income. Life is much easier when you don't have to split bills or other payments. How hard is it to trust your spouse with money? If you can't talk about it or give one or the other an "allowance", you need some marriage counseling.

  • Doreen - Monday, June 9, 2008, 3:13PM ET  Report Abuse

    • Overall: 5/5

    It's disappointing to see how sexist some of these male commentators are. I wonder what they think of their own mothers. Was mom just after dad because he was a meal ticket? Was she a hopeless shoe fanatic? The fact is, after divorce a MAN's standard of living rises, while a WOMAN is far more likely to be living in poverty. Married women often give up careers to rais children, then when faced with divorce the man ends up leaving her with kids and he complains about having to contribute anything to the financial support of the kids. Marriage is a bad idea for WOMEN. For men it's a sweet deal -- a cook, housekeeper, maid, admin assistant, nanny, etc that he doesn't have to pay.

  • bajoverga - Monday, June 9, 2008, 9:29AM ET  Report Abuse

    • Overall: 1/5

    no kidding! spill the beans why dont ya!

  • Yahoo! Finance User - Monday, June 9, 2008, 8:49AM ET  Report Abuse

    • Overall: 4/5

    To "Yahoo finance user" posted 3:57AM. Thanks man. You have revealed lot of your personal information. Can you also give us your account number and name of the bank in which you have these savings... Life will be really really sweet with that information

  • Yahoo! Finance User - Monday, June 9, 2008, 3:57AM ET  Report Abuse

    • Overall: 5/5

    I MUST BE IN HEAVEN....according to many of the posts here. I currently make $40K(medical secretary) and my wife makes $91K(R.N.). Those are our base wages, no overtime included. I actually like the fact that my wife makes more than me and while she is more of a spender than me but not by much, she earns it. Our 9th anniversary is in a few days and we have 3 children 6,4, and 2. In less than a month after getting married we got joint checking and savings and also had separate Money Market Savings accounts, which we got rid of after about 3yrs because separate accounts were ridiculous for our situation. Four months after the wedding, we bought our home and still live there, although we had a new house built 2yrs ago to replace the 1980 mobile we had on our 5 acres. We have paid our CC bills in full every month since we have been married and have never had a late/missed payment. We OWN our van, truck, and car and our only debt is our mortgage. While I put the $20,000 down on our home, out of the $30,000 that I had saved, her income makes the mortgage payment and then some. We have never had an argument about ANYTHING since we have been married, including finances. Disbelieve all you want but we are that compatible. Sooo many people get married without knowing much about their partner but we opened-up to each other about everything in the year before I proposed to her and then we married six months later. If you need a pre-nup, why even bother? It should be called a "I don't trust you-nup". We have about $210,000 in our 401k's, $25,000 in an online bank and $10,000 in our regular bank. She is 35 and I am 40 and Life Is Sweet!!

  • Yahoo! Finance User - Sunday, June 8, 2008, 3:16AM ET  Report Abuse

    • Overall: 1/5

    Well, you are a very good financial adviser; however, family is a different matter and must be flexible. Each family has its own problem. There is no such thing "one size fits all" when talking about family matter.

  • JUINA L - Saturday, June 7, 2008, 5:36PM ET  Report Abuse

    • Overall: 4/5

    I TOTALLY AGREE WITH THE FACT THAT IT IS VERY IMPORTANT TO ADDRESS THE ISSUE ABOUT EACH OTHERS FINANCES EARLY IN THE RELATIONSHIP AND NOT WAIT TILL LATER ON WHEN THINGS GET WORSE. BY THEN, IT WILL BE EXTREMELY DIFFICULT TO DIG YOURSELF OUT OF THAT HOLE JUST BECAUSE IT WASN'T ADDRESSED IN THE BEGINNING. TRUST ME, I KNOW FROM EXPERIENCE.

  • Sloth Machine - Saturday, June 7, 2008, 2:58PM ET  Report Abuse

    • Overall: 3/5

    Suze is right on about the prenup: DO NOT GET MARRIED WITHOUT ONE. No sex, no matter HOW HOT, is worth HALF of everything you own or ever will earn or own. You really gotta be touched to get married at all...

  • Thomas - Friday, June 6, 2008, 4:46PM ET  Report Abuse

    • Overall: 2/5

    Ahhhh, if you are married her/his credit card debt is ours. I am the bread winner getting ready to move in with the spender. She stated she wanted her own accounts, many credit cards, bank accounts [little money] etc. Me I know how much I owe and how much I have. The seperate accounts will kill the relationship due to me a MAN thinking a credit card debt is equal to a affair....do it once it will happen again.

  • Yahoo! Finance User - Thursday, June 5, 2008, 10:43PM ET  Report Abuse

    • Overall: 3/5

    Are you kidding me? OUR money would be spent in an instant and guess who would have to come up with bill money - me! My guy spends way more than he makes. The only thing that has slowed him down is that we now have seperate charge cards and I refuse to pay his bills so his charges are racking up. Sometimes you need tough love.

  • Ashley - Thursday, June 5, 2008, 4:36PM ET  Report Abuse

    • Overall: 5/5

    Hi, my name is ashley and i just want to say that was an excellent story also true. As i speak me and my fiance are going through money matters and it kinda split us up ,but we both agreed to change alot of things you mentioned. I really admire your story so i'll print it so he can read it. May God bless u and your husband.

  • Yahoo! Finance User - Thursday, June 5, 2008, 3:34PM ET  Report Abuse

    • Overall: 2/5

    As a married (13 yrs) professional woman, I encourage all couples to keep their money separate! It doesn't matter how much money my husband makes (a successful salesman), he spends it all. He has little discipline to save. It got us into a heap of financial trouble in the early days when I was naive enough to TRUST him with OUR MONEY. As we worked out of it (no bankruptcy - just 7 years of awful), I made sure things are separate. Yes, I have a couple of accounts he knows about and several savings/investment/college funds for kids accounts he doesn't. While he's much better than he used to be, we will probably be living off the retirement I've saved for us when we have a meeting of the minds.

  • LM - Thursday, June 5, 2008, 12:17PM ET  Report Abuse

    • Overall: 3/5

    In an ideal world, it would great to have a mate whom I can completely financially trust. As much as I enjoy your seminars about money Suze, the joint accounting only works when each person IS financially responsible. However, since I pay my mortgage that I am legally responsible for myself, I want to be sure that the money is going to be there because unfortunately, some partners are not financially responsible. There are not too many people in this world I would trust with my modest income. I can count only two people in this world that I would because I know from experience that money in a joint account to some people, is like an unsupervisored child with a cookie jar full of treats. It's not fun to pay bills, but I take pride in paying mine down/off as much as I can each month. Having separate accounts (because of awareness) is responsible and smart when the person doing so is paying the bills. I have just about nothing left over once the bills are paid, but at least no creditors are heckling me and I can sleep at night. To some it may be a control thing, but to me it's knowing that my supply is available and I don't have to deal with any drama when it comes time to pay.

  • Yahoo! Finance User - Thursday, June 5, 2008, 11:57AM ET  Report Abuse

    • Overall: 3/5

    Wow. A lot of the comments on here are very sexist, no wonder those guys ended up divorced. Maybe if they spent more time chasing an intelligent, educated and responsible woman than a skirt or bra size, they'd be a little happier. But of course, all women are irresponsible shopaholics, so it couldn't have anything to do with them. Sheesh folks, bad money managers exist in both sexes. Working part-time, I make 35% of what my very successful husband does and guess who manages our finances, savings accounts, retirement investments, real estate holdings, etc. I somehow manage to find time to do all that while spending all day Bed, Bath and Beyond. Grow up guys.

  • Ice - Thursday, June 5, 2008, 11:29AM ET  Report Abuse

    • Overall: 2/5

    Secret to a successful marriage? Separate checking accounts.

  • WCS - Thursday, June 5, 2008, 8:32AM ET  Report Abuse

    • Overall: 5/5

    30 years of together and we still can't do it. My spouse thinks every thing will be alright. Keep up the effort.

  • Yahoo! Finance User - Wednesday, June 4, 2008, 10:19PM ET  Report Abuse

    • Overall: 1/5

    Is Suze trying to be the Yahoo finance mom? Maybe next week Suzie can write about how lending money to friends/family is a bad idea. Save this crap for Judge Judy.

  • Ted L - Wednesday, June 4, 2008, 9:15PM ET  Report Abuse

    • Overall: 1/5

    This article neglects to touch on how to not spend all the money that the primary money maker (husband) brings home. If women could check their spending habits, take a course on investing or actually make money and become useful in a working environment other than smiling and taking notes then this would be a fantastic article. The only good advice is the prenup. I had one with my last marriage and it was smooth sailing come divorce. Unfortunately I didn't recoup all the money that was spent on hideous purses.

  • Yahoo! Finance User - Wednesday, June 4, 2008, 8:56PM ET  Report Abuse

    • Overall: 4/5

    Sensible advice that makes me realize how it would be a mistake for me to marry any man because I wouldn't trust him with my stash, even if he were a trophy husband. The issue is trust, on a grand scale.

  • Yahoo! Finance User - Wednesday, June 4, 2008, 3:06PM ET  Report Abuse

    • Overall: 4/5

    I'm with you Suze. Money matters in a relationship. And so many friends of mine, the wives have no sense of managing money. It doesn't mean they don't care about money. They also complain about the soaring cost of gas and grocery and less money left to do the things they suppose to do (like to put money into the kid's college fund), but they don't want to excise self-control on spending. And they have no interest to learn the money concept. I am a woman. And I am so glad to read an article like this to teach woman how to manage money. From my own experience, the guy next to you will pay more respect to you and listen to you more if you are good at managing money. So it is definitely good for a relationship.

  • H. C. - Wednesday, June 4, 2008, 1:02PM ET  Report Abuse

    • Overall: 5/5

    I am the first one to admit that I have no back bone and afraid to deal with confrontation. I am in an up side down relationship. The individual who lived with me, who I cooked and share the same bed with, contribute only $800 per month, which include food, utilities, plus a workshop he had it build at my back yard, he feel he is paying too much. After reading this article, I know I need to confront this person, to step up the plate or hid the road Jack. Thank you for opening my eyes!

  • Yahoo! Finance User - Wednesday, June 4, 2008, 7:12AM ET  Report Abuse

    • Overall: 5/5

    Great article and right on target. Having just dissolved my marriage after 21 years because of different money personalities and issues, my biggest regret is that my husband and I didn't talk in great detail about how we would handle money before we got married.

  • Yahoo! Finance User - Tuesday, June 3, 2008, 9:29PM ET  Report Abuse

    • Overall: 5/5

    A very serious subject that is at the root of man marital problems! Probably one of the best Yahoo Finance articles I have read with the most useful information!

  • looneytarian - Tuesday, June 3, 2008, 7:35PM ET  Report Abuse

    • Overall: 4/5

    One of Suze's better ones. Most of the onestar posters are the same ones who log on every week just to trash her because Trunk is no longer around. The 3 account idea worked well for my first wife (who died young) and I. We had a joint account for house and utilities and we each had a separate personal account. The other had access to those personal accounts but we never went into the other's account without permission and then only in case of immediate need. We always paid back anything we took out of the other account, too. While this article is not a guarantee that you will never divorce, it will certainly improve the chances of a lasting marriage.

  • Yahoo! Finance User - Tuesday, June 3, 2008, 6:38PM ET  Report Abuse

    • Overall: 4/5

    Suzie, how about a "post-nuptial" agreement? Who says you can't do it after the fact? Saves a lot in leagal fees, in case of divorce.

  • Yahoo! Finance User - Tuesday, June 3, 2008, 4:45PM ET  Report Abuse

    • Overall: 5/5

    My significatant other and i do not plan to marry or co-habitat because of money issues - his hidden debt. Your advise is solid.

  • Yahoo! Finance User - Tuesday, June 3, 2008, 4:28PM ET  Report Abuse

    • Overall: 5/5

    "I practiced everything you preach and then some and still ended up divoced! Perhaps we both need some "EXPERT" ADVICE! By the way my finances slowly but surely improve!" There is something very funny to me about this statement... like you think that Suze is saying "follow this advice and have the perfect marriage!" Doing things "right" with money or anything else does not mean that there can't be other issues that will doom a relationship.

  • Yahoo! Finance User - Tuesday, June 3, 2008, 4:03PM ET  Report Abuse

    • Overall: 2/5

    All the complicated issues and risks of marriage these days. Why not consider staying single? It has worked great for this lifelong old bachelor. Better yet, I put together a nest egg sufficient to allow early retirement. No worry about a divorce destroying my plans. No kids to put through college. No negotiating on every money issue, or on where I want to live or the size of the house or the kind of car or the setting of the thermostat. No debts. No forced visits with nasty in-laws. Life is great. Most of my married friends are still working, stressed out, and unhappy. Think about it before you make a mistake that can ruin your life. Remember that statistics are against a happy marriage, most likely you will get divorced even if you think it could never happen to you.

  • Da Big Guy - Tuesday, June 3, 2008, 2:31PM ET  Report Abuse

    • Overall: 2/5

    I practiced everything you preach and then some and still ended up divoced! Perhaps we both need some "EXPERT" ADVICE! By the way my finances slowly but surely improve!

  • Cindy - Tuesday, June 3, 2008, 1:59PM ET  Report Abuse

    • Overall: 3/5

    I don't buy into the idea that a joint bank account equals trust. Online banking has changed the concept of the "checkbook" anyway. Set up separate online accounts at the same bank. Both spouses know the user names and passwords for both accounts. Create a spreadsheet of all your bills, and split them up in a way that you both consider fair. Each person pays the bills from his or her account. Each person can transfer money to the other, but can't dip into the other person's account and take it. This works very well for us and I recommend it for people who marry after spending many years single.

Showing comments 6-35 of 59<< PreviousNext >>
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