by Grace Worley, CFP(r), MBA

First comes love, then comes marriage, then comes the financial battleground in many households. It is the rare couple that is in perfect accord about their financial lives. Even then it can be only a synchronization of spending that is leading to joint bankruptcy. How does a married woman manage her money in harmony with her mate and achieve the right financial objectives?

Each partner should determine his or her "money" personality. Kathleen Gurney, Ph.D. and CEO of the Financial Psychology Corp., has extensively studied the idea that each of us has a money personality. She profiles nine financial personality types in her book, Your Money Personality: What It Is and How You Can Profit From It.

Some people are very controlling about their money; others use it as a way to express self-esteem. For a married woman to successfully manage her financial self, Gurney says, she must recognize that "there is an inseparable link between our unconscious feelings about money and the way in which we earn, spend, save and invest it." And this is true about her husband too. Some money personalities naturally complement each other, while others spark conflict.

By identifying how you and your spouse express yourselves in money management, you can better determine how to work together more successfully. The person who wants to control the money can find some latitude for the partner who needs a certain amount of financial independence. The investor who likes risk must accommodate the more risk-adverse spouse's desire for secure investments.

For example, a household portfolio will accomplish balance where the aggressive spouse houses the more volatile investments in her retirement account, while her husband's accounts are invested more conservatively. The key is to recognize that each of us is different in our perceptions about money. In a nonjudgmental way, a couple needs to orchestrate a money management plan that accommodates both views.

Productive money management in a marriage requires ongoing constructive communication. These are times when the couple discusses financial issues and goals and monitors progress as well as the current household financial situation. Establishing a regular time for this activity is best. Some couples pay the bills together once or twice a month. It's a good time to take financial inventory. Others use a professional financial planner to provide structure to their money management disciplines and a routine for communication about goals and issues. These communications need to be collaborative and without recrimination.

Each couple should discuss what they want to achieve financially now and for the future. What are each person's expectations about household income, expenditures and lifestyle choices, money management roles and responsibilities and time frames for achieving financial goals? Write these down for future reference and modification as needed.

Share the money management responsibilities. In every household, decisions must be made and implemented in a wide variety of financial areas. These include the maintenance of the banking relationships and accounts; buying insurance; managing credit; saving for a house, college or retirement; investments; taxes and estate planning. In some situations, it works best for one spouse to take the lead in these matters. In other marriages, one spouse assumes primary responsibility for part of this list, while the other oversees the balance. One approach is to trade responsibility for the checkbook or bill-paying duties on an annual basis. This gives each spouse an instructive bird's-eye view of the household's inflows and outflows.

Although coordinating financial management efforts is central to successful money management in a marriage, it is important that each spouse retains some personal money to spend as he or she wishes. This can be achieved through an allowance or a personal checking account. If a woman likes to periodically hit the mall for a day of shopping for nonessentials, she can do so with her own funds.

If one or both of you is eligible for bonuses at work, you could agree to divide that "found money" into thirds, putting one-third toward joint financial goals and one-third to each spouse to spend as he or she wants. By having personal money to spend, each spouse can readily express his or her financial self without compromising joint goals and without receiving judgment from the other spouse. This recognizes the individual within the context of the marriage.

Sometimes a couple cannot build a working money management system by themselves. Natural communication blocks or widely disparate views on goals require an objective third party to help along the process. This can be a financial planner. Many couples limit their financial planning and money management reviews to their periodic meetings with a planner. A professional advisor provides a structure and a qualified reference for designing and maintaining a financial plan. An experienced advisor also can diffuse a conflict between the spouses when there is a difference of opinion, leading the couple to a workable resolution.

If one of the spouses has a truly dysfunctional money management problem, a family counselor should be considered. Some of these serious problems can be indiscriminate spending resulting in unmanageable household debts, or an obsessive need to control all family money and financial decisions, excluding the other spouse. When one spouse is the primary or only breadwinner, it is not uncommon for the other spouse to feel inferior and apologetic in managing the family funds. This results in hurt feelings and resentment. A counselor can help the couple and the individual spouse work through these and other psychological barriers to successful money management.

Savvy money management is the result of a thoughtfully constructed process of setting household goals, determining responsibilities and roles and working the system as a team. Such a financial plan is part of the foundation for marital success and personal satisfaction.

A Checklist for Money Management

Coming up with an appropriate financial plan requires open communication and cooperation between both partners in a marriage. Steps to take include:

- Figure out your own money personality

- Communicate regularly with your spouse

- Set joint goals and systems to achieve them

- Share the responsibility

- Have some "his" and "her" money

- Use an advisor for balance

Worley is a certified financial planner(tm) and investment advisor who has provided fee-based services in Central Indiana for 20 years.

Article appears as published in the IW July 2004 issue.