Tommy: On the list of things that married couples fight about, item number one money. Right at the top of the list. Sometimes a lack of a budget, no discipline on spending, spending too much, one is too cheap, an accumulation of too much debt. LoTommy: of issues, and they are very serious. Serious enough to tear apart a relationship. But actually, there is something, there are several things you can do, before you walk down the aisle with you intended spouse. And here to discuss it, money coach Lama Faran who joins me. Good morning.
LF: Good morning Tommy.
Tommy: Now many people, many many many people Lama they have great communication before marriage about things like having children, where they are going to live, their plans for the future. Why don’t couples have the money talk?
LF: Well, it goes back to money really being a taboo subject to start with. So we talk about, we ask our partner what colour you like, where do you like to go on vacation, what food do you like. But we never ask them, how were you brought up with money? How was money used in your house when you were a kid? What did you learn about money? These are all questions that we never even touch. It’s funny cause recently I had a client she wanted to see if they can afford a house, she was getting married. And just on the phone, I asked her so how much does your husband or future husband makes? She’s like, I don’t know. Im like wait a minute, you’re getting married to this guy and you have no clue how much he makes? She’s like, no well, I have my money and he makes his money and our things are going to be separate. I was like okay. This really show you that people just don’t talk about money. It’s something that is touchy, it’s sensitive so we avoid it. It’s as simple as that.
Tommy: Now you brought up something very interesting. Instead of saying, very direct questions, how much money do you make exactly, do you like to spend a lot of money, are you cheap? Insteads of asking questions like that, if you ask about money in the household when they were children you’ll find out a lot about somebody, won’t you?
LF: Exactly. They way we deal with money today is because how we were brought up. So maybe the woman comes from a house where money equaled love, money was used to show love. And maybe the man was brought up in a house where money equaled control. This was how the father controlled people with money. So these two people when you put them into a relationship together, of course there is going to be a clash because they don’t perceive money the same way. And yet they never discussed things like that, and they don’t know what happened in their childhood with money.
Tommy: So how do you bring up the subject?
LF: You just open it. First of all, there’s actually a very good book, that’s all about discovering your partner from a money perspective, it’s called “THe hEart of Money”. The author is called Debra Price, she has the money coaching institute in california, she’s actually my mentor. She has a lot of exercises in there where you can sit down and discover your life story about money and also your partner’s life story. Just to give you an example I actually picked out a small exercise that we can give listeners today. It’s four simple statemenTommy:, that you’re going to fill in the blanks, and you each fill them out and you compare the answers. Okay, so the first one is: I believe money is ___________________. Second one is, when i think about money I feel ___________________. When it comes to money, what I need most is __________. And the last one which is the most important i feel is, when it comes to money and our finances what I need the most from you is __________________.
We never really ask our partners what we need from them financially. So i find doing this kind of exercise for example, you know it takes five minutes. You compare your answers, you’re going to have a discussion around that and you’re going to discover things about your partner.
Tommy: Alright so as you have this discussion, you’ve filled in these questions you start having this discussion, for somebody it means a vacation and having a good time, and having what they want, when they want and being able to keep up with Jones’ next door. And for the other one money means security, so they want to be careful, they want to put money away for the future. Two very different views. How do you reconcile these two views in their marriage? How do you make that compromise?
LF: Well, the thing is the person who wanTommy: to go on vacation. The saver, i’m going to call them the saver and the spender. The saver can sit down and say, okay listen we can go vacation but it might not be in 2014 it’ll be in 2015. You have to give them something to look forward to. Not like oh we can’t afford it period. You have to give them something, yes we’re working towards that. Usually there are three different scenarios: it could be saver – saver, saver – spender or spender- spender. Saver – saver, life is good, they are both saving, they are not fighting. Spender – spender they are both spending, and one of them hopefully is going to wake up and usually, unfortunately they wake up a bit too late. And the saver – soeldner, the way you can deal with it is for the spender to have, I don’t want to call it an allowance, but a discretionary amount that they can spend the way they want, on whatever they want. And the saver really doesn’t have a say in it. But this is after sitting down and figuring out the budget for the household, and once that discretionary amount that’s left, the breathing room, that the spender can take and do whatever they want with it. The same amount can also go to the saver, and they can save it or do whatever they want with it.
Tommy: Lama Faran is my guest. She is a money coach. If you have any questions for her about money and marriage, or money period even without marriage, send your texTommy: to 514800. I hav an example for you, a dilemma for you Lama. He’s the saver, she is the spender. He realizes that what she is doing, just going through the entire, not only what they earn but going through the line of credit as well, he realizes that they are doomed if they continue this way. But he caves in to her. And, what do you foresee for them in the future?
LF: Divorce. Well, he caves in, if he’s the saver I don’t know if he’s going to cave in, he’s going to want to find a solution. I often say the problem with money is often not a money problem, and that is very very true for couples. If she’s going crazy with the spending, it’s that there are other issues underlying that. And what are these issues? Is she just bored in her life? Is she having an emotional void that she’s trying to fill. Why is she spending? It’s not a question of here is your budget and you can only spend that much for month, it’s why is she going down that road?
Tommy: He’s the saver, and she’s the spender. He puTommy: the money in and she takes it out. But you’re right there are underlying issues. For that, they would use not only a money coach but they would need a psychologist.
LF: Yes, very often couples therapy, and even like there is something called financial infidelity. This happens when for example, the wife goes she purchases stuff and she hides them. There is dishonestly at the end of the day. You know, dishonestly with money, I’m sure there are other areas as well where they are dishonest.
Tommy: It’s an official term. So wife says she’s bought a dress, it was on sale and she doesn’t mention the proce.
LF: Or like she hides it, it’s not only done – let’s say on a regular basis. IT’s a pattern. You buy things, you hide them, you take off the tags before you come home.
Tommy: NOw, what do you recommend to couples when one of them is bringing a heavy debt load into the relationship.
LF: Well, there has to be a discussion before they get into the relationship. This is where financial transparency is really important. When you’re engaged, let’s say and you’re moving in together and you’re going to get married. Just put it all out there. This is what I’m bringing with me as debt. This is what I’m bringing with me as asseTommy:. And this is what I expect you to do. Have a conversation. Do you expect your future partner to help you. Or do you expect to buy a house, and dump it all on the house. Or maybe you’re going to say, you know what, no I put myself into that mess I’m going to take myself out of that mess. Just have the conversation from the beginning to set the expectations on how you plan on dealing with this debt.
Tommy: I’m gathering that most of the people that you see have not had that conversation.
LF: No. Well, I had a client for example, she took on her husband’s debt. She said, you know what we’re going to do this together.
Tommy: Were going to continue the discussion. More of your questions; money coach Lama Faran takes your questions at 514800. LoTommy: of texTommy: coming in for our guesTommy:, Money Coach Lama Faran. This texter is saying, what about saving secretly for your spender partner to not know about said money. I do that. He knows I save but not how much.
LF: It’s dishonest. Really, there is nothing. Why wouldn’t he disclaim it? That’s the reason. I would like to understand why is he secretly saving, and how much?
Tommy: Well, she should reveal the exact amount she puTommy: away?
LF: Why not?
Tommy: Because then he’s going to say, we have all that money save, let’s spend more. This way he doesn’t know how much the total is.
LF: Yeah, I don’t know. Is she saving it for something specific, and she tells him, listen this is going to be our cousin if you go crazy shopping.
Tommy: Dean from NDG says, my wife had two pairs of good shoes when we met, now she has over 700 pairs. Some Im sure that she’s never even worn. I have 3 pairs of shoes. What advice do you have for Dean and his wife?
LF: To put a limit on how many shoes a year that she can buy. Let’s say he gives her a limit of 5 pairs of shoes, and that’s it she’s done.
Tommy: What if she’s earning money?
LF: FOr me, I don’t understand this she’s earning, he’s earning. For me, everything goes into one account. All the expenses of the house go into one account. You can have a bit of discretionary money and he can have a bit of discretionary money.
Tommy: You don’t think spouses should have separate accounTommy:?
LF: You can have separate saving accounTommy:, but everything that is related to the house. Because I’ve seen couples who have been together for 14 years. She has her account, her paycheck goes there, she is responsible for certain bills. And him the same thing. But this didn’t work out after some time because it’s the typical scenario of the left hand not knowing what the right hand is doing. His account would be in overdraft and he’s not able to pay the bills that he’s assigned, but she’s’ okay. And they are not talking.
Tommy: Phil says, my wife and I were well healed. Our incomes went into our accounTommy:, and investmenTommy:. Throughout our marriage we didn’t talk about money, fortunately we didn’t have issues. There should be mandatory premarital courses and mandatory counseling when divorce is brought up.
LF: Definitely. I always suggest for couples to go to workshops together, to hear the same financial message. Maybe these two people were brought up in very healthy households, where money was used in a healthy household and they were okay. But a lot of people come into relationships with a lot of baggage and it all comes up, in times of stress really.
Tommy: How about when one person has a house and will get married, and the future spouse didn’t contribute money to purchase the house.
LF: Again, discussion. You can tell the person that listen this is my house, I came in with it. If we do get divorced, I’m taking all of it. Set expectations from the beginning.
Tommy: Another texter, Bobby says that there is another factor, no matter what the situation both parties have to drop the guilt trip of who spent what where, or you’re never going to solve your problem. Do you agree with that?
LF: Yes for sure. I mean this is why money is a very emotionally charged topic. It’s because it brings with it a lot of anger, blame and finger pointing. And it’s not easy to talk about money and stay cool. Right? It’s very emotionally charged.
Tommy: They say opposites attract, but can a couple make it if they have totally different ways of dealing with money?
LF: They can, through discussion, through communication and through, I mean they have to meet somewhere in the middle. You can’t stay the way you are exactly and expect the other person to change and say, this is who I am, I spend and it’s your problem if you’re feeling insecure. They have to meet somewhere in the middle.
Tommy: One fascinating text after another. Michelle says I hide how much money I have in my off limiTommy: savings account. He knows how much I have in my chequing. My savings are for emergencies and to put a down payment on the house he always talks about wanting. I also help him with his student loans and credit card when he can’t meet his monthly paymenTommy:. Despite his debt he still spends thousands monthly, even though he makes more than me I keep us afloat. They are managing right?
LF: Yeah they are managing but at one point he will have to wake up.
Tommy: Barb doesn’t need to wake up, she’s awake already. She says, married 37 years. Everything goes into one account. We pay all the bills from this account, if there is any money is left over good for us. If we need something we go get it. Everything belongs to both of us.
LF: That’s great. I would be out of business if everyone was like that.
Tommy: If everyone was like Barb you would have no customers. This one, this have been a good customer for you. This text says, my ex husband was saying he was saving for us, so he would ask that i pay all the bills while he put his pay in an account under his name. When it came to divorce the bank account had only a few thousand dollars, because his money was hidden with his parenTommy:. Four years later, he’s diving an Infiniti.
How often does a couple sit down. Every week, every month?
LF: I think every week there has to be a money date. Every week because things come up weekly.
Tommy: WHat is a money date?
LF: A money date is you sit down, you can bring a glass of wine to make the date more interesting. And you talk about money proactively. You say, okay that was our budget did we blow it off. Why did we blow it off? What are we going to do in the next week to get back on track. Another important thing is, let’s say you have a certain amount budgeted for eating out. And you plan, and you look at the week ahead, and you say okay were invited to 3 birthday parties, how are we going to manage that? You look at things in advance to predict instead of putting out the fires afterwards.
Tommy: And what recommendation do you make if both are working, and one is making a lot more money than the other.
LF: It really doesn’t matter. This is a problem that comes up with stay at home mom’s. They feel that they don’t have a say in the financial decisions because they aren’t bringing in any money. Really, it’s irrelevant of what income you bring in. you have an equal say whether you’re making 20 thousand, 50 thousand or 100 thousand.
Tommy: Were going to end with this text here. Once people know the difference between their needs and their wanTommy:, then they will be okay with saving money. Do you agree with that?
LF: Yes, this is the main reason people are in debt to start with. Our needs are infinite.
Tommy: How are your savings doing Lama?
LF: My savings are great.
LF: Thank you so much. A pleasure talking to you. Money Coach Lama Faran.