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Fiscal Attraction - By Chris Gearing

Thursday, July 30, 2009

Fiscal Attraction: Why Opposites Attract on Money

July 30, 2009

Dr. Sylvia Gearing, TXA 21 News

Frustrated by your partner’s spending habits? Well, those habits may be why you married your partner in the first place according to new research from the Wharton School of Finance and Northwestern University.

Money is a hot issue because it represents options, power, and status. Eighty four percent of American couples routinely argue about money. However, the contrast between what we say and what we do with money is stunning. For example, most singles say they are looking for someone who has similar spending habits. However they are often drawn to people with opposite financial philosophies. Tightwads seek more liberal spenders and visa versa. We are attracted to people who have opposing, but more desirable strategies with money because we may think we need to be more balanced. Unfortunately, partnering with someone who does not agree with you on money is risky and can lead to relationship disaster. The fact that opposites attract, especially on finances, explains why money is the top gridlocked issue in marriage.

  • Women Love Financial Independence: Money is highly symbolic for women. It represents our autonomy, our self-respect and our separate identity from the relationship. We will negotiate but we will not be dictated to. In one third of American households, women out earn men and we are seeing a huge shift in financial partnerships. Men are having to share decision-making.
  • Men Love Money: In a study of over forty countries, people from more affluent countries attach more importance to money and men are often more preoccupied with finances than are women. They love to accumulate it, they love to talk about it and they love to dictate how it is spent. Being a high wage earner increases the man’s social status and may even lead to more desirable partners.

Couples are terrible about communicating about money since it is so loaded with conflict. Here is where couples run into trouble with money:

  • More Similar Than You Realize: Your values and long term goals about money may be much more similar than your spending strategies. For example, a CNN Money poll found that only a quarter of men believes that their wives value investments. The reality is that fifty percent of women value putting money in investments (the same percentages as men).
  • Spouses Typecast One Another: We tend to divide financial tasks along gender lines. Men still do most of the big picture planning while women govern the everyday spending. Misunderstandings flourish with such separate roles.
  • Men Love to Discuss Money: The top topics in male conversations are about business and money. Half of men love to discuss it in social settings while only a fifth of women share that point of view. Such patterns lead to some boring conversations for women!
  • New Order of Female Independence: Leadership leads to financial decision-making and more women are getting promoted every day. Forty percent of women who are the primary breadwinner take the lead in investing. This is twice the frequency of families in which women earn less than the man.

Relax by knowing that money is difficult for just about everyone. However the following tips are essential:

  • Total Transparency: Do not sneak or hide money in a marriage. Financial infidelity is emotional devastating for a relationship.
  • Negotiate and Initiate a Shared Financial Strategy: Couples generally agree about long-term goals. The leading cause of dissention in relationships is disagreement about financial priorities.
  • Do It Together: In the new economy, most of us have fewer assets, less time and more debt. Work together as a team and compromise on finances while remaining dedicated to both partners achieving a “win.” Unresolved, chronically gridlocked issues are relationship poison.

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