20 Aug Changing perceptions about financial conflict

One of the areas of discussion that are fraught with anxiety and distress with many couples is talking about finances. I know myself, talking about financial matters is the one area I seem to find difficult to talk about my wife. I also know that talking about finance for many couples I see is a struggle and can be a real bone of contention.

In a recently published article from researchers at Brigham Young University and Kansas State University 1Britt, Sonya L., E. Jeffrey Hill, Ashley LeBaron, Derek R. Lawson, and Roy A. Bean. 2017. “Tightwads and Spenders: Predicting Financial Conflict in Couple Relationships.” Journal of Financial Planning (5): 36–42., they found that there weren’t any fundamental personality characteristics in the couples they were studying, or even the circumstances the couples were in that were causing couples to argue about financial matters, but instead, it was the perception of how much the other spouse was spending that caused the arguments.

Ashley LeBaron, BYU graduate student and study co-author said,

the fact that spouses' perceptions of each other's spending behaviours were so predictive of financial conflict suggests that when it comes to the impact of finances on relationships, perceptions may be just as important, if not more important, than reality.

What was interesting was how couples saw what their spouses were spending, which caused the conflict, rather than looking at the facts about what they were spending. More interestingly, there was a split in how each spouse perceived the other’s spending.

The study found that for husbands, having a wife who they saw as a spender was the highest contributor to financial conflict. While for the wives, having a husband who viewed them as a spender was a significant contributor to financial conflict. This was seen in couples with high incomes and low incomes as well as with couples who spent a lot and those who did not spend much at all. The views were entirely relative to perception.

Professor Jeffrey Hill, whom LeBaron worked with at BYU family life, along with Professor Sonya Britt-Lutter from Kansas State, an expert in the area of finances and marriage, also contributed to the study.

Sonya Britt-Lutter suggested that “couples need to communicate about finances, especially early in marriage. Couples shouldn’t think that financial problems will magically go away when circumstances change. The study showed that circumstances weren’t the issue here, perception was, and perception doesn’t always change when circumstances do.”

Of those who participated in the study, 90 percent of women and 85 percent of men reported that they experienced some kind of financial worries.

Income levels do not matter

The researchers suggest that no matter what the perceptions or realities are exactly, if finances are causing problems in a relationship, they should get help.

“The good news is that couples can benefit from clinical help,” Professor Hill Jeffery said, “whether that be a financial planner or a marriage and family therapist.”

Avoiding financial conflict

While the perception of financial matters maybe one of the causes couples encounter conflict, one approach to solving this conflict is to talk about what’s distressing about the financial circumstances you are both in.

I’ve also found in my practice, couples who argue about finances seem to have a few points in common:

• Lacking transparency about their levels of finance.  This might be for a good reason, so would need to be explored in more detail. There are many reasons why keeping levels of finance a secret from your partner. But if it’s having a negative impact on you as a couple, then maybe it’s time to look at it the reasons for the lack of transparency.
• Limited or no budget for living costs. Each partner may have a different idea about how to budget for living costs. From one couple I met, they used to have a fixed idea about what living costs should be, and the person with the primary source of income would allocate an amount for the living costs to a joint account. The critical problem for them was that they didn’t sit down together and talk about the actual costs.  They used to argue over the lack of money for the expenses they needed for food, bills and children’s activities and clothing.  They just needed to see the facts about the costs and the reality of the outgoings rather than the perception of the spending.
• Lack of planning or discussion about financial decisions. If talking about money is difficult, then planning about financial decisions are going to be challenging. Another couple I met had different ideas about what they wanted to do with their money.  One partner had some fantastic ideas about what they wanted to do to fulfil their dreams.  The problem was each had their own hopes about what they wanted to achieve, such as planning to save for a dream holiday or the convertible car they wanted to travel around Europe in.  The difficulty came when they found they had not talked about what each other’s dreams were about and how realistic they could fulfil these dreams together.
• Not always having someone independent to talk to about financial advice.  Having impartial guidance can help with setting out what the reality is in your current and future financial situation.  Talking to someone independent can also help create a safe environment to talk about a subject that each partner perceives as different from the other, especially, as we have seen, when it comes to spending and planning a stable financial future.
• Avoiding talking about money as it’s too stressful or causes an argument. This makes sense.  Why would you put yourself through something that is painful and stressful?  You would want to avoid it.  So making talking about any difficult subject, you may need to take a different approach and a different mindset when it comes to talking about a challenging subject. Talking about finances, however, might be the tip of the iceberg of other difficult subjects you might be avoiding, so it’s worth thinking about how and why you might find approaching these subjects challenging in the first place.  

Some key tips on avoiding financial conflict

1. Seek financial advice. If you find it difficult to talk to each other about your finances, then speak to a financial adviser as many of the independent financial advisors in the UK offer free advice. There is also the Citizens Advice Bureau or the Money Advice Service how can help you talk through your financial situation. Finding someone who can help you talk about your financial situation together and go through the facts about your budgeting, planning and saving in a calm and support way, will help improve your relationship. They will also be able to help you both see how your perceptions of your partner’s spending might be affecting both of you.
   
   
2. Talk about your financial situation when you are both calm. The more you are stressed, the more likely you are to make poor decisions and the more likely you are of having an argument. Lowering your stress-levels when communicating about finances can help you make better decisions as well as more rewarding financial goals. Talking through any difficult topic should be discussed when you are calm. If you find yourself becoming distressed take a deep breath, mentally count to five while inhaling and back down from five while exhaling. Deep breathing will immediately reduce any physiological stress. If you feel you can’t calm yourself, schedule another time to discuss finances when you are less stressed.
3. When making or planning financial decisions, do this together. To reduce the perception that one spouse is spending more than another, so you can create a more balanced view of spending, talk through any financial decisions together. Don’t forget to include your partner when making any financial decisions, especially if you are talking to a financial advisor. You should be able to talk through these decisions with your partner.  It’s not just down to whoever earns the larger salary. It should be a joint discussion and decision. You are a couple in this partnership, a team after all!
4. Plan financial discussions regularly. Plan weekly, bi-weekly or monthly meetings where you can discuss your situation as a couple. While you can talk about your finances as one of the topics, you should also look at creating a balanced strategy by looking at, what LeBaron discussed in his research, as the concept of a ledger of merits. The ledger is to help balance out your perception of merits in the relationship and the contributions each partner makes. While there may be a high financial contribution by one partner, which is of merit to the relationship, there are other merits such as household chores that equally balance the financial contribution as a whole to the relationship.  To create the ledger of merit, create two columns on a piece of paper, one for you and one for your partner. Then list the merits of the relationship and the contributions made by each of you. It’s not about levels of money; it’s about what roles you might play in your relationship. For example, your partner might describe their main income source, managing household finances, household shopping, maintaining the house, reading to the children. While you might add household things like chores, such as cooking, cleaning, doing laundry, buying groceries, household shopping, and caring for the children. You can then see how each contribution is balanced out and hopefully change perceptions of the various contributions each of you makes. You can then discuss a budget for each area on the ledger and how much needs to be contributed to each week or each month.

Whatever you decide to do, just be genuine and honest about your fears about finances, and if you need help discussing your situation, do seek help. It does help.

1. Britt, Sonya L., E. Jeffrey Hill, Ashley LeBaron, Derek R. Lawson, and Roy A. Bean. 2017. “Tightwads and Spenders: Predicting Financial Conflict in Couple Relationships.” Journal of Financial Planning (5): 36–42

Photo by Alejandro Escamilla