Love & Money

Money is a subject that most people are reluctant to talk about for publication; where only first names are used, the names have been changed.

 Joe and Laura have a good marriage, although when it comes to spending money, they often don't see eye to eye.

If Joe wants to buy a new tennis racquet or some other little luxury, he knows the drill: He has to fill out a "purchase order." Then his wife considers his request.

"They actually have a form that she created for larger and luxury purchases–not groceries, not clothing for the kids, but if he wants a new golf club, he shouldn't just go out and buy it," says financial planner Barry Glassman, of Cassaday & Company in McLean. "She fills them out too, for stuff she wants, but she's in finance for a large corporation and is used to filling out purchase orders. He runs his own business and makes quick decisions to buy this, spend that–so $200 or $300 isn't a big deal.

"It causes tension," Glassman admits. "He knows if he really wants something, he has to fill this form out and fight for it."

Then there's Tom, who's not always as up-front with his wife about purchases. Tom loves wine and has a good wine cellar.

"Once his cellar was built up, his wife said, 'Look, your wine cellar is full. Cut it out. I don't want to see any more wine come into this house,' " recalls insurance and investment adviser Scott Greenberg, of Partners Financial Solutions in Vienna. "And he said, 'Okay, you won't see any more wine come into this house.' But he neglected to tell her he had an arrangement with a friend who also had a wine cellar. The wine would be delivered to his friend's house."

Tom's ruse didn't last long.

"How it was discovered: The two couples were going to get together for dinner and the wives were talking, and the wife of the friend said, 'Oh, why don't we bring one of Tom's bottles?' Of course, Tom's wife said, 'Why do you have any of Tom's wine?' "

 

Money is what couples fight about most. They battle over how to manage it, who should manage it, how to spend it. Almost all marital decisions are somehow tied to money–from taking a new job or buying a house to what kind of car to get.

How much a couple earns is not so much the problem–couples fight whether they make $30,000 or $300,000. It's about how money is spent and managed.

Not all couples have money conflicts, but most do at some point. Seven out of ten couples occasionally disagree on financial issues, according to a 1998 survey by Yankelovich Partners, a research firm.

Many partners laugh about and learn to live with their differences. The key is not whether a couple argue about money but how they work things out.

"Disagreeing about money is normal. If you disagree, it doesn't mean you married the wrong person," says Howard Markman, a University of Denver psychology professor and coauthor of Fighting for Your Marriage.

Don't think you and your mate disagree about money? The battles can be subtle. One person may lecture the other about switching off lights. Or maybe a wife slips extra money to the kids–and doesn't want her husband to know. Or a husband doesn't bother to tell his wife exactly how much he spends on lunch.

"The reason people argue about money more than anything else–it's something that comes up virtually every day," says Markman. "Trying to decide where to go to dinner or how much of a tip to leave will trigger the issue."

In truth, fights about money are often not about dollars and cents.

"Money represents love, power, security, control, self-worth, independence," says Olivia Mellan, a local psychotherapist and authority on money conflict. "If money were just money, everyone would make rational decisions about it. But it's not. It's very emotionally loaded."

Ric Edelman, of Edelman Financial Services in Fairfax, agrees. "Nobody ever divorces over money," he says. "Money is a symptom, not a cause. Money is a symbolic and visible form of much deeper problems. It's never about money. It's always something else."

 

Have You Become Your Parent?

She grew up in a blue-collar household, ashamed of having to wear old clothes to school. He grew up with money, never wanting for much of anything. This Washington couple is now worth millions, but that didn't stop them from bickering about the cost of ketchup.

"They would go to the supermarket, and he would throw whatever he wanted in the cart," recalls Scott Greenberg. "She'd go behind him and take it out if she didn't have a coupon or it wasn't the cheapest brand. I remember a story about ketchup: He was getting Heinz 57, and she said, 'I don't have a coupon for Heinz.'

"He made fun of her for clipping coupons," Greenberg says. "That was a sore subject for her, because that's how she grew up."

It's no surprise that our attitudes and habits toward money are shaped by our past–particularly our parents.

Olivia Mellan knows this well. Her father fretted about cash, while her housewife mother was a chronic shopper. Mellan's mom hid shopping bags of new clothes behind a living-room chair, showing them to her husband only if he was in good spirits.

"To my amazement," writes Mellan in her book, Money Harmony: Resolving Money Conflicts in Your Life and Relationships, "when I was growing up, I found myself alternating between my dad's worrying about money and my mom's shopaholism. In fact, I would even symbolically hide the clothes behind the living-

room chair till my husband was in a good mood." >

Many baby-boomer women grew up with fathers who controlled the purse strings–and these women now want to have their own accounts. Some overspenders, after digging into their past, realize that parents lavished them with gifts rather than affection. Money became love.

When two people come together, they're bringing into the relationship notions about money that can be at odds. Often, a person is unaware of his or her own feelings. Then when there's a disagreement, they're sometimes not sure why they're fighting.

"So often it's tied to people's histories," says Georgetown psychotherapist Annette Annechild. "He's saying, 'Just stop shopping. You've got enough clothes.' Meanwhile, she has no idea why she's so obsessed with buying that pair of shoes."

When a couple has money issues, Annechild recommends they write out answers to these questions: What are the first things you knew about money? How were your parents with money? What did money mean in your family? What role did you have with money in your family?

After addressing these questions, Annechild says, "they'll see they've become their father or their mother. Or they've become the opposite."

 

"It's Easier to Talk About Sex"

It's not only our parents that affect our feelings about money. Religion, media, society, and peers all have an influence.

"When I was a freshman in high school, I had a crush on the prettiest girl in school," says Roger Gibson, author of First Comes Love, Then Comes Money: Easy Steps to Avoid the #1 Conflict in Marriage. "I never forgot what I heard her say one day as I walked by her and a group of her friends. She said, 'A great-looking guy in an okay car is just okay, but an average-looking guy in a great car is a babe.' Instantly, I began to equate money with love."

Money can make people feel safe or free. Some people view money as dirty and feel guilty if they make too much. Others equate money with self-worth.

Money can mean power. In a relationship where a woman earns more than a man, this can be a challenge.

"I think it's very hard in our culture to not be the man who makes more money," Annechild says. "What happens is the man tries to make the woman feel smaller. 'Do you really have to work late tonight? You really don't balance your life as well as I balance mine.' Whoever has more power can be undermined by the person who doesn't. It takes a very strong sense of self-esteem to be with a male or female who makes a disparate amount more."

Money can be about revenge. She's mad that he works late, so she goes shopping.

With so many feelings tangled in with money, it's sometimes hard for people to talk about it without getting emotional or even irrational. But discussing money on a regular basis is a way to avoid arguments.

"The number-one secret to not fighting about it is talking about it," says Gail Liberman, coauthor of Love, Marriage, & Money.

Trouble is, lots of people don't like to talk about money.

"For years it was the last taboo," Mellan says. "It was easier to talk about sex than it was to talk about money."

 

Debt Is the "Marriage Monster"

To the outside world, Rick and Julie look happy and successful. But they've racked up $30,000 of credit-card debt, and they haven't stopped shopping: Rick recently bought a Porsche.

With the help of financial planner Barry Glassman, the couple is trying to scale back. Julie needed to stop charging–she was paying just the minimum due each month on her credit card. Rick wasn't ready to cut up their credit cards; he wanted them for emergencies. So he took a plastic container, filled it with water, dropped in the credit cards, and placed the container in the freezer.

"He decided to freeze them, so if she used the credit cards, he'd know," Glassman explains.

Debt is the money issue couples quarrel about most, says Roger Gibson, especially young couples caught up in our consumer culture.

"I call debt the marriage monster," Gibson says. "When you're in debt, it creates stress, worry, frustration, fear."

Talk to almost any financial planner and you'll hear that too many Washingtonians live beyond their means. To a financial planner, living within your means is paying your bills and setting aside enough savings to take care of future obligations, whether retirement or college for the kids. That means saving anywhere from 10 to 25 percent of income.

Sometimes when there's debt, the couple know it's a problem, but they focus–and argue about–the wrong thing.

Says financial planner Dick Vodra, of Legacy Advisors in McLean: "A lot of times, people will find the symbolic issue–leaving the lights on, throwing the toothpaste tube away when it's not completely empty–because they don't want to deal with the real issues."

For example, Vodra says, a husband may think to himself, "I like that we have a nice house with nice furniture and I like that we eat good food, and yet I want her to be aware of how much we're spending, so I'll annoy her with this little light issue."

Although the stereotype may be that women are spenders and men are savers, Barry Glassman says that's not the case in Washington–men overspend just as much.

"In this area, I think it's equal," he says.

 

Why Spenders Marry Savers

It was three days before his wedding, and Blake thought he and his bride-to-be had settled on flowers and decorations. But as the day drew near the bride asked the florist to install a small grove of ficus trees in the hotel ballroom.

"The groom was saying, 'Everything you've chosen has gone over budget. Is this going to continue after we're married?'" recalls the wedding planner who coordinated the $35,000 nuptials. "She definitely was a spender, and he was a saver."

It may seem like a marriage made in hell, but savers commonly end up married to spenders. Opposites attract.

Even if two people start out as both spenders or savers, they may eventually balance each other.

"My view of couple relationships is that if opposites don't attract–and they usually do–you will turn into opposites," says therapist Olivia Mellan.

If two tightwads marry, one spouse may start scrimping less because someone else is watching the bank. If two spenders marry, one often reacts to the other's excess by becoming more thrifty.

"Before I met my husband, I was the saver in every relationship I was in," says DC financial planner Susan Freed. "But he is more of a saver than I am. By default, I have become the spender. That's liberating for me–I feel free to spend money on gifts, for the house, for myself."

Few people are extremes–shopaholics or misers. It's common, Mellan says, for people to harbor a mix of behaviors. One minute they're squirreling away for retirement, the next month they fear they're not enjoying life and are spending. As your partner seesaws back and forth, you may too, as a counterweight.

"It's very rare that they're both savers or both spenders," says Annechild.

It's a good thing. Two spenders in a family can be disaster; two savers can be boring.

 

Learn to Be More Like Your Spouse

It's often not easy for spenders to save, or savers to spend. But Olivia Mellan thinks it's important to take turns being the spender or the saver in a relationship–to understand a partner's perspective. She suggests a role-playing exercise.

"I worked with one engaged couple: He was such a spender that he was basically buying every tie in Macy's. She was such a hoarder that she had no living-room furniture," Mellan recalls.

Mellan went with the couple to Macy's and had them switch roles, pretending to be the other.

"So we spent 45 minutes at the store looking for a sofa and a VCR. He's saying, 'We can't buy this today; we have to consult our budget.' And she's saying things like 'Oooh, VCRs, let's get one with all the fancy features' and 'Oooh, TVs, let's look while we're in the neighborhood' and 'Oooh, look, makeup's on sale.' At the end of 45 minutes, he literally looked like someone hit him with a thunderbolt. He said, 'Oh my God, I'm an addict.' And she said, 'Oh my God, shopping is a chemical high. No wonder he can't stop himself.' "

Spenders and savers aren't the only opposites who attract, Mellan says. Risk takers–those who gamble on the market–commonly end up with risk avoiders. And money worriers, as Mellan calls them, often pair with money avoiders. Money avoiders don't balance their checkbooks, don't file taxes on time.

"You could see how one type creates the other," Mellan says. "Someone who worries a lot will create a money avoider who wants to get away from all that worry. Or, if you're getting married to an avoider, you might become a money worrier because someone has to worry. It's like there's a role there that needs to be occupied, and someone will just fill it."

 

"Look, Honey, a New Car!"

Two weeks after Roger Gibson got married, he bought a new Toyota four-by-four truck–forest green, with a king cab–without first telling his wife.

"I pulled into the driveway; I was so excited," he recalls. "I had honked from two blocks away, so not only did my wife come out, but my neighbors did too. She said, 'Are you nuts?'

"The most humiliating thing," says Gibson, who's been happily married eight years now, "is I ended up taking it back. You can imagine, after three days, showing all my friends."

In most marriages today, couples decide together on major purchases. But some old habits die hard.

"The research says," Olivia Mellan explains, "that because women are raised to be democratic and cooperative and men are raised to be competitive and see everything as hierarchical, if a man makes more than his wife, he thinks he should have decision-making power over where most of the money is spent. Whereas if she makes more money, she thinks the decision-making should be more democratic.'"

The same goes for gay couples, according to Mellan. If a homosexual man makes more, he usually wants the decision-making authority in a relationship; in lesbian couples, the woman who makes more thinks decisions should be mutual.

Financial experts recommend that spouses set a comfortable limit–whether $50 or $500–that one can't spend on anything without first consulting the other.

"One of the rules I have is that neither spouse can spend more than $50 without the other's prior acknowledgement," says Ric Edelman. "I didn't say consent, but prior acknowledgement."

Men aren't the only ones bringing home surprises.

"A while back, my wife, Somjai, asked me, 'Is it okay if we buy a new sofa?' " recalls Jamie Simon, a hairstylist and manager of Bubbles's K Street branch. "So I said okay, because I know my wife, and I knew she'd spend about three months looking until she found what she wanted, then after she ordered it, it would take about three months to come in. So I'd have about six months to pay for it. Then about two weeks later, there's this new sofa downstairs. I said, 'Where did this sofa come from? You just asked me a few weeks ago.' And she said, 'Oh, I ordered it six months ago.'

"It's a real joke in my family–when will I notice things my wife has bought for the house," says Simon, laughing. Somjai's latest purchase? A piano.

"The piano was in the house two, three days, in the living room, which we hardly go in, before I noticed it. I walked by, saw this thing, and said, 'Huh. Where did that come from?' "

 

"This Old Thing? I've Had It for Years"

Marcha's closet is hung with Chanel jackets and other designer labels bought at Neiman Marcus. She and her husband practice a sort of "don't ask, don't tell" system: He never questions what her clothes cost, and Marsha, who manages the checkbook, doesn't volunteer the information.

Still, she worried that he might be curious about what she spends, so she got a post-office box–which her husband doesn't know–and has her Neiman's bill mailed there.

While most couples fight openly about spending and saving, some take their battles underground, and hide or lie about purchases.

A Redbook online poll of 451 people found that 44 percent of wives and 31 percent of husbands made a purchase and either hid it or lied about its price.

While men who make major purchases without telling their wives might present them triumphantly, women usually don't feel they can do that.

"Woman are generally more afraid of claiming their power straight," says Olivia Mellan. "Therefore, when they act out their power, they do it in sneaky ways."

One personal shopper at an upscale department store has had customers ask that new clothes be hung in clear plastic bags instead of the store's signature bags. "So it looks like it's coming from the cleaners," she explains. Other shoppers ask that clothes be delivered to their office.

Therapist Annechild had one patient who stowed new clothes in the trunk of her car, bringing them into the house slowly. If her husband asked, "Is that new?" she could say, with all honesty, "This? I've had this for a while."

Then there was the mother-of-the-bride who didn't want her husband to know exactly how much their daughter's wedding was costing them. So she asked the wedding planner to draw up two budgets. One, the real estimate, was for $80,000. The other, the one shown to her husband, said $60,000. The second proposal omitted expenses like valet parking, guest favors, calligraphy, table linens, and waiters. It also shaved a bit off the cost of the gown.

Annette Annechild says that secret shopping can be trouble.

"It's definitely a sign that there's lack of trust," she says. "And it also signals to me that that person is in a child-parent relationship. The minute you're hiding stuff, that's a young way of coping with something. No one should have so much power in a relationship that you hide things."

What's worse, says Annechild, is when hiding purchases becomes a family activity.

"I have families where the mother colludes with the daughter to hide clothes in the trunk. She'll say, 'Daddy won't understand we paid $30. Say we paid only $10.' The daughter becomes like the mother."

 

"Let Me Pay You in Half Cash, Half Check"

Another scheme of secret shoppers is the half-cash, half-check buy.

One woman who wanted a golden retriever–her husband wasn't wild about getting a dog–talked her husband into it, assuring him the puppy would cost just $300. But the dog really cost $600. She wrote the breeder a check for $300 and paid the rest in cash. She had been withdrawing extra money from the ATM for weeks, in amounts small enough to not be detected.

"When I paid the woman, I said to her, 'Don't tell my husband,' and she said, 'Don't worry. I clip all the tags off my clothes before bringing them home,' " says the dog owner.

Women do it at hair salons. Men do it at sporting-goods shops.

"This guy came in recently, bought a new set of golf clubs, and paid $600 cash, $600 check," says the owner of a local store. "His wife would probably kill him for buying a $1,200 set."

"This is not all that common, fortunately," says Howard Markman. "Lying, cheating, and deceiving about money is not a great thing to do."

If the deceit is discovered, Markman says, it can do as much harm as an affair.

 

"You Have What?"–When Spouses Hide Money

Some partners hide entire assets or financial dealings from the other. "There have been several very significant, high-net-worth divorces in this town where the issue between spouses was finding assets that had been, let us say, relocated by either husband or wife to offshore trusts," says DC lawyer Charles Lee Eisen.

Few spouses can carry on that level of deception.

DC lawyer Glenn Lewis had a case in which the couple had a modest business; the wife believed they earned about $20,000 a year. But, Lewis says, "the husband was an immigrant and returned to Europe several times a year to visit family. It was discovered he was pulling a huge amount of money out of the business and parking it in Europe.

"This is not as frequent as it used to be, because people are educated and less trusting," Lewis says. "The concept of a completely dependent spouse who doesn't know how to sign a check and balance a checkbook is an antiquity now, but it does exist, especially in long marriages."

More frequently, the lies are smaller. That doesn't mean they're less hurtful.

"When I was in the Army Reserves" recalls Jim, "there was a colonel who for years insisted that his check be held for him rather than mailed because he had told his wife it was all volunteer." When Jim became the new paymaster, he wasn't given those orders, and he mailed the colonel's monthly stipend home–where it was opened by his wife. >

Ric Edelman, who writes books on finance and hosts TV and radio shows, was contacted by a woman who had found out that her husband of three years owed $80,000 to the IRS. "And I wrote back to her, 'If you didn't know this, there's a lot of other things you don't know,' " he says.

Sometimes when a money secret is revealed, there's a happy ending.

It was the night before they were to be wed, and the bride had a confession to make to her groom. "She had been a secretary for a major computer company and had gotten stock options. She was a millionaire in her twenties," recalls financial planner Mary Malgoire, president of the Family Firm in Bethesda. "She married a mechanic and didn't tell him until the night before they were getting married of her financial good fortune. I thought that was very interesting–a statement of 'marry me for love, not money.' "

 

Money in the Cookie Jar

Several years back, Scott Greenberg and his wife, Cindy, were itching to get away–really away. Cindy was finishing her medical residency, Scott's insurance-brokerage business was doing well, and they were planning to start a family. They dreamed about a three-week vacation in Australia. "It was a last hurrah," Scott says.

But the trip would cost $8,000, an amount Scott didn't feel they could afford.

"I'm thinking, it's not something we should do at this time. Then my wife presented this check for $20,000. I said, 'Where the hell did this come from?' "

Years before, the couple had opened a mutual fund. Cindy, who did the banking and paid the bills, socked whatever money was left each month into the fund. Scott never looked at the statements.

Cindy's rainy-day fund was meant for both her and her husband to use, but not all spouses are as willing to share.

In the Redbook poll mentioned earlier, 34 percent of women and 35 percent of men admitted to having a cash stash their spouse doesn't know about. The largest percentage of women salted away less than $500; men hid more, up to $5,000.

Heidi Evans, a reporter for the New York Daily News and author of How to Hide Money From Your Husband . . . And Other Time-Honored Ways to Build a Nest Egg, thinks the numbers are even higher. "I would say eight out of ten women I interviewed at random had a little something hidden away," Evans says.

In Yiddish it's called a knipple–Jewish women used to take a little money, twist it in a piece of fabric, and tie it into their slips or underwear.

One of Evans's favorite stories involves a rich woman in Manhattan whose husband, Evans says, was a "control freak." He allowed his wife to have a credit card–and he was happy to pay for whatever she charged–but he wouldn't give her cash.

"So she'd go shopping in the finest stores in Manhattan, and then for her friends she'd hold private sales–she'd sell the merchandise for half price, just to get cash," Evans says. "I thought that was pretty inventive.

"A lot of women say they feel guilty," Evans adds. "I say it's better to feel a little guilty than trapped or dependent on a bad marriage or a bad job."

Separate accounts can solve some of the problems of hidden shopping and secret stashes, but the question of separate versus joint money can be a confusing, sometimes contentious issue for couples.

 

Women Have Come a Long Way

Gloria and her husband lived frugally. They never took vacations, rarely went out to eat, and made do with old things. Gloria pinched every penny that her husband brought home from his blue-collar job. She never knew exactly how much money they had. Her husband controlled it all.

Then Gloria's husband died, and she discovered she had $1 million, much of it in investments.

"She felt free for the first time in her life," says financial planner Peg Downey, a partner in the Silver Spring firm Money Plans. "She got rid of her old house, she got rid of her old junk, she bought new furniture. She didn't buy anything extravagant, but she was really deprived until then. I remember the one luxury this woman bought was an expensive bathrobe. It was $100. She always wanted a silk bathrobe.

"It's incredible the stories I hear about older women; their husbands die and all of a sudden there's all this money," Downey says.

It wasn't long ago that most women were kept in the dark about family finances. Husbands made and managed the money.

"Women generally grow up with the message that they won't be very good at this stuff and, if they're lucky, a man will take care of it for them," says Olivia Mellan.

Until recently, married women had trouble getting their own credit cards and mortgage or business loans; such things were automatically put in a husband's name.

When Susan got married in the late '70s, she had a handful of credit cards in her own name, including one from Lord & Taylor. She called the department store to add her husband to her account.

"And when his card came, they had changed everything to his name," says Susan, now 45. "I couldn't believe it. The thing was, my husband was in graduate school. I was the principal breadwinner."

Greater numbers of working women would change things. So would higher rates of divorce. Women who had no money or credit of their own felt trapped in bad marriages or helpless if their husbands left them.

Their daughters and granddaughters would not make the same mistake. Now most married women–from baby boomers on down–insist on some separate money. And they take an active role in deciding how to invest and spend it.

Younger women, particularly, are not intimidated by money matters.

"I don't see much of a difference between men and women in their late twenties, the Gen-X group, when it comes to money," says Susan Freed.

Ironically, it's women's empowerment that may have led to more money quarrels.

"Men used to handle all the finances, and they didn't get into many fights because women didn't know very much about what was going on," says Downey.

 

He Wants a Joint Account, She Wants Separate Money

In most marriages, the bulk of money is communal. A nationwide "Marriage and Money" survey conducted in December 1998 by Prudential Securities found that only 37 percent of women and 30 percent of men felt that couples should have separate checking accounts.

As for credit cards, though, 58 percent of women and 50 percent of men want their own.

What's common, says Ric Edelman, is for a couple to have mostly joint assets but for the wife to have her own checking account or credit card.

That's how Edelman and his wife, Jean, do it. "We have a joint checking account, and she has hers, just like her mom taught her," he laughs.

Edelman doesn't have his own bank account or a separate credit card–many men don't bother. Few men, after all, have been in a situation where someone questioned their right to spend money.

"Often it's the man who wants to put all the money together in a relationship," says Olivia Mellan. "He'll say to her, 'Why do you want separate money; are you trying to file for divorce and you don't trust me?' And she'll say, 'Why do you want to merge the money? You must want to control me.' But I believe that both want something very positive.

"Men normally have a hard time merging; they tend to withdraw at the first sign of intimacy," Mellan explains. "Women tend to overmerge and lose themselves in relationships. So I think for a man to want to merge money is a loving expression of wanting to have more togetherness, in an area where he's capable of merging. And for her to want separate money is a sign of healthy autonomy."

"It doesn't mean I don't think we're going to grow old together or retire together," says one Bethesda woman who insists on her own accounts. "It just feels more secure having something of my own."

Financial advisers stress that there is no right or wrong way for a couple to structure their finances.

"Each couple needs to establish a system that works for them," Edelman says.

 

Who Pays the Phone Bill?

Valerie and her husband have totally separate money, and always have, during their 30 years of marriage. Every month, he pays the mortgage; she's responsible for groceries. He pays for electricity; she handles telephone and water bills. He springs for dinners out; they take turns on theater tickets.

He's helped support three children from a previous marriage; she's responsible for a greater share of the expenses for their son and daughter. "Other things, he'll pay one time, I'll pay the next," Valerie explains. "It's not rigid. We might split a big purchase, half and half."

Sound complicated? It can be. Financial planners don't mind a couple's having some separate money, but most recommend against totally separate money for married couples.

"I haven't found a lot of people who've done it well–that 'You pay the mortgage, I pay the groceries,' " says Rockville financial planner Larry E. Paul, president of PLR Financial Partners. "I think it's a recipe for creating points of argument."

Financial planner Dick Vodra also isn't a fan of divvying up expenses.

"That's where you get in a lot of fights," he says. "And sometimes you get a situation where the husband pays for boring stuff, like groceries, and the wife pays for fun stuff, like vacations. I don't like that. Or the wife goes to work to put the kids through college, as opposed to going to work because the family just needs an extra $25,000 of income."

Valerie admits that the arrangement has led to some strife. One of the biggest debates she and her husband had was whether to send their daughter to public or private school. Valerie thought the public school was unsafe after her daughter was warned never to go alone to the school's bathroom. But Valerie's husband didn't want to pay for private schooling. So Valerie did–all $10,000 of the tuition, out of her money.

Another time, Valerie suggested the family go on a ski vacation. Her husband doesn't like to ski, but she does, and she wanted their children to learn. She took the kids and paid for it. Her husband stayed home.

Valerie's husband earned more than she did, but an inheritance she received before her marriage gives her financial freedom.

"We've always had separate accounts," she says. "Looking back, I don't think that was such a good idea. I don't think you budget as well. When we first got married, he might say, 'We don't need new windows for the house,' but I'd say, 'Well, I'll go ahead and buy them.'

"Having said that, I don't think I could have had a joint account. I couldn't have someone telling me I couldn't spend money. I like the independence."

Autonomy is the advantage of separate assets. The arrangement works for many couples, especially those who marry later in life and those who've been married before and have assets to protect for children.

"I have one couple, both professionals who had come out of bitter divorces," says Scott Greenberg. "He had gotten a divorce over sex, and she had gotten a divorce over money because her first husband was a spendthrift. So he said to me, 'We have a contract about how often we have sexual relations. And we also keep all our money separate.' People think it's strange they divide everything down to the dime, including groceries, utility bills, even vacations. If they go on vacation, they split the hotel bill, they split restaurant checks. He pays for his airfare, she pays for her airfare.

"I have to tell you," Greenberg says, "it works for them."

Experts do agree that it's not necessarily divided accounts that cause strain; it's how spouses refer to and use that money. If each partner contributes toward shared goals, the system works.

"I think it's great that people have separate checking accounts, so they have a sense of independence," says Annette Annechild. "But the idea that money is separate is really hard on a relationship. The couple needs a joint goal financially, something both people make a plan about."

Divided assets can be a problem when one spouse earns significantly more but the couple is splitting bills evenly.

Dick Vodra remembers one client, an executive, who at the time earned $90,000. Her husband, a federal employee, made $45,000. "She made twice as much as he did, but they were splitting the bills 50-50. When they bought the house, they split it 50-50. He was always broke," Vodra explains.

Experts generally recommend contributing to bills in proportion to income.

It's good to have money in separate names for estate-planning purposes. Any individual can leave up to $675,000 tax-free to heirs; if a husband and wife each has an account with $675,000, that's $1.35 million in untaxed inheritance.

"Often, for estate planning, we'll retitle assets that were joint," says Susan Freed.

Separate assets also are a good idea for unmarried couples: Shared money means too many entanglements if the relationship sours. If an unmarried couple does pool money, financial advisers recommend that everything be in writing–and that you draw up a will.

"For unmarried couples, document everything–how much you contributed to AOL stock, whether one loaned money to the other, whether money went toward the mortgage," says Dick Vodra. "The problem is there's a nice legal procedure when a married relationship breaks up, but there's not a nice legal procedure when an unmarried relationship breaks up."

 

Joint Accounts: A Matter of Trust

Annette Annechild believes that merging money makes a statement about commitment and trust.

"I don't think people should get married unless they trust each other with the money," she says. "You can give your body to someone, your soul to someone, but not your money?"

Well, sometimes trust is an issue.

"I've been asked, 'If this is in a joint name, can she take it all out?' 'What stops my husband from taking this all out?' That question comes up very, very frequently. They've heard stories," Barry Glassman says. "What do you think that says?"

What's key in a joint arrangement, besides trust, is that both spouses know what's going on with the money.

Kevin learned that the hard way. Because he worked full-time, his wife took care of the bills. Several years after they were married, she took the kids to visit her mother for a week and stopped the mail, even though Kevin stayed at home.

"Which I thought was peculiar," he says. "Then I'd come home and there'd be messages on the answering machine from X, Y, Z credit-card companies saying, 'Where's our payment?' "

Turned out his wife was behind on the bills. When Kevin tried to get gas one day, the station confiscated his credit card.

"I tried to take over the bills," he says, "but it became such a ballistic environment. She denied anything was wrong. It wasn't until the night I moved out of the house that she admitted she had stopped the mail because she didn't want me to see the bills."

Kevin and his wife divorced. "I still don't know what happened to the money," he says.

 

Who Balances the Checkbook?

Ric Edelman work with one couple, both in their late sixties and both with high-wage jobs, who have an unorthodox way of managing money.

"She handles all the bill paying, all the checkbook activity, all the household expenses, and she makes all the investment decisions and major purchase decisions," Edelman says. "Her husband is largely uninvolved in financial affairs. She once described to me how she makes her decisions. She goes home, she tells her husband what she's doing, he gets mad and won't talk to her for three days, and they've been doing that for 42 years."

Another drawback of joint accounts–besides having to answer to a spouse for purchases–is the matter of responsibility. Who pays bills? Who balances the checkbook? Who makes decisions on investments? Who decides on a budget?

"In a perfect world, both members of the marriage will be equally involved in all the decisions, and they will never disagree. That's not realistic," Edelman says. "If I'm a financial adviser and my wife is a musician, which one of us do you think should be more heavily involved in financial decisions? Culture, knowledge, and training play a role in who has a dominant say."

Some spouses don't have the time or the temperament; they simply can't be bothered with money. Experts believe that it's less important who handles the checkbook–if one spouse prefers doing it or if both take turns, fine. What's important, besides both spouses knowing what's going on, is that one partner doesn't feel unfairly burdened.

"Some people divvy up tasks; some modify things as pressures increase and decrease on each partner," says psychology professor Howard Markman. "The key is seeing eye to eye, not the system they use."

 

"My Husband Has No Clue"

In 56 percent of all households women pay the bills, writes Esther M. Berger in MoneySmart Divorce.

That's because women are at home more often, raising children. That makes the wife, or whoever the stay-at-home spouse is, better aware of a family's everyday expenses.

"My husband has no clue how much piano lessons and summer camp cost," says Joan, a mother of two.

"If one spouse is predominantly raising the children, that spouse is better aware of the financial aspects of clothing, doctor visits, veterinary bills, and other details of maintaining the household that the primary wage earner is unaware of," says Ric Edelman.

"What I see sometimes," says financial planner Susan Freed, "the man, who usually is still the main breadwinner, gives the wife a certain amount to run the household. But it's not enough." The man, Freed says, doesn't understand where the money is going. Meanwhile, "the man is the one spending the money–on vacations, new suits, a nice stereo. The person who is the primary wage earner feels that a budgeting problem may lie with the stay-at-home spouse, when in reality it lies with him."

Lawyer Glenn Lewis sees it, too. He's had cases where the husband is taking business clients to the Palm every day or traveling first-class for business, and he's mad at the wife for having lunch at TGI Friday's.

Edelman recalls one couple in which the husband liquidated $85,000 out of their account to join a country club. "His wife knew about it, she didn't object," Edelman says. "But, going to dinner one night, my wife and I and this couple, she lamented the fact that she was so busy cleaning the house that she didn't have a lot of time. So the following week, I called him and said, 'You're going to liquidate $25,000 so you can pay for your wife to have a maid. You can pay 85 grand for a country-club membership, and your wife is cleaning toilets?' "

 

Are Men Better With Money?

During the early years of Carrie's marriage, she knew nothing about finance. "My husband told me if we could afford a house and what we could afford. He bought our first three cars," Carol says.

One day, while sitting in an investment counselor's office, Carol had an epiphany.

"My husband and this man were going back and forth, and I suddenly realized they didn't know what they were talking about."

Carol joined a women's investment club and became more savvy about money. Now she participates in financial decisions.

It's fairly typical, in older couples especially, that while the wife handles the checkbook, the husband takes the lead on major financial decisions.

When partners come into Ric Edelman's office, he says, "the husband tends to become dominant on the financial planning, on the big-picture decisions–When do you want to retire? How much income do you want at that time?"

What's interesting, says Edelman, is that 80 percent of the time, it's the wife who calls to set up the appointment.

"I think the reason for that is the same reason that we all know that men won't ask for directions when they're lost," he says.

"Most men are raised to believe they'd be very good at this–even though, like sex, no one teaches them the first thing about it," says Olivia Mellan.

That's not exactly the man's fault.

"People in America are usually financially illiterate. Money is the one thing that is not taught," says financial planner Larry Paul. "The unwritten, unspoken contract in this country is go to college, get a job, and we'll check in with you in 30, 40 years and see how you're ready for retirement. Good luck."

 

Are Men Better Investors?

Husbands, more often than not, decide on a couple's investments. "My wife pays the bills, and I handle our investments," says hairstylist Jamie Simon. "I'll ask her, 'How much can I play with?' She has no idea what I'm investing in, although she sees statements every month."

That's very common, financial advisers say, although younger women are more involved in stocks. And more working women have 401(k)s of their own to invest.

"The stereotype is that the man is the investor and the wife tags along," says Dick Vodra. "I'd say that's true two thirds of the time. Where it gets interesting is when they're both involved. I frequently recommend separate portfolios. You give him money to work with; you give her money to work with."

One reason men like to handle investments is that men like higher risk.

"Women are more risk-averse than men because they all have 'bag-lady' nightmares," Mellan says. "They all fear they'll be out on the street with nothing, partly because of their history of dependence on men. Women tend to fear that if they make a mistake with their money, they won't be able to make it back. Men feel like if they lose it, they can always make it back."

A DC stockbroker recalls one client who came in every month like clockwork, before account statements were printed, to sell off any stocks trading at a loss.

"The reason was that even though his overall account was doing well," says the broker, when the wife looked at the statement, "she zeroed in on the losers and made his life miserable."

While men are more confident than women about investing, men aren't necessarily any better at it.

A study at the University of California at Davis found that women do better than men as investors–largely because men buy and sell more frequently. The study found that men trade stocks 45 percent more often than women and earn annual returns that are 1.4 percent less.

"Another difference," Mellan says, "is that if men make money in the stock market, they credit their own cleverness. If they lose money, they blame the incompetence of their advisers. If women make money in the stock market, they credit the cleverness of their advisers. If they lose money, they blame themselves."

 

"I Hereby Bequeath You . . ."

If money is power in a relationship, then what happens when the money equation changes? >

One partner gets a fat raise. Or one spouse stops working, to raise children or go back to school. As the power shifts in the relationship, it can cause strain.

Nothing leads to quite as much chaos as inheritance.

Dick Vodra worked with one couple, both in their sixties and married 40 years. The wife, flush with a $500,000 inheritance, felt secure with their retirement nest egg. But the husband wasn't ready for a life of golf and early-bird specials.

The husband had had his own manufacturing business, but it failed. All their money had gone into that business. He wanted to use his wife's inheritance to start another.

"He viewed it as 'My life isn't over; I want to try new things.' And she's sort of going, 'I've got to sit in the bunker and not die poor.' The wife was afraid the husband would fail a second time. She said no," Vodra says. "And they split up."

"Inheritance," says Ric Edelman, "is probably the single biggest opportunity for family strife."

For one area couple happily married ten years, inheritance is a sticky issue. The couple lives in a house that the husband inherited, and he's left it in his name only.

"All these years it hurts her feelings," says Annette Annechild. "Everything else is joint, but not that. What that does to a relationship is difficult because somewhere underneath it all he may still be thinking it might not work out."

It's not necessarily a problem if a spouse who receives an inheritance keeps it in his or her name.

"We normally recommend that inherited monies remain separately titled," says Susan Freed. "If the relationship doesn't last, that money is protected. But when we're doing retirement planning, we assume that the money is for both to use."

That's the key, say experts. It's all about shared visions. If the spouse with the inheritance contributes to family goals–whether retirement, or college, or a second home–the couple does fine.

"We have seen instances where one of the married couples receives a large inheritance, and that goes into a segregated account, in that person's name only, and he or she uses that money for their pleasure," Edelman says.

"True colors can sometimes be revealed when one person receives a lump sum, whether an inheritance, insurance settlement, lottery winnings, or legal judgment."

 

We're Both Rich–I Want a Divorce

The overnight wealth being created in Washington's high-tech community–and the roller-coaster ride of stock options–also can strain relationships.

Financial adviser Barry Glassman relates this tale: A man went to work for America Online in March 1998 and received 10,000 stock options with an option purchase price of $7.76, adjusted for a stock split. A year later, he got another 10,000 options, with an option purchase price of $48.06.

By April 1999, when AOL stock shot to $87.75, the man and his wife had amassed–on paper–$1.2 million. They sold their townhouse and bought a $500,000 house in Fairfax County. She bought a $38,000 Lexus.

Four months later, AOL stock dropped to $38.46. The options were worth $307,000.

"The fancy car, you can't turn it in," Glassman says. "The expensive home can cause huge financial and psychological troubles."

Divorce lawyer Glenn Lewis has seen stock options prompt a couple to rethink their relationship.

"The board grants him 100,000 more stock options, which will be given to him within a year," Lewis says. "He hasn't talked to his wife about a separation, but he comes in to me and says, 'Here's the deal. In a year I'm getting $20 million in stock. I am willing to divide the $8-million pie we already have, but I don't want my wife getting the $20 million.' It does force people to take a good look at a marriage if they're having problems."

Gaining instant stock wealth is akin to winning the lottery–it's not years of systematic saving that built that wealth, not decades of growing a business. There wasn't a lot of striving toward a goal. The first instinct is to throw out the budget and buy a lot of nice things. Everything, including the relationship, gets reevaluated.

It's happening not just in high tech.

"I have cases where someone's been in the Senate or Cabinet for 10, 20 years, and suddenly a lobbying or investment-banking firm offers him a job," Lewis says. "He'll make $20 million in the next ten years, but the wife who's been trying to make ends meet loses out because he rides off into the sunset with his secretary. That happens a lot.

"The other thing you see," Lewis says, "in big law firms–someone becomes a partner in seven, ten years. The spouse hangs in there waiting for the guy to get the brass ring, where his income might go from $200,000 to $800,000. When that happens, he checks out."

"My theory is," says financial planner Dick Vodra, "you make an unwritten contract when you get married, and the contract is sort of, 'I'm marrying you to get these needs met; you're marrying me to get these needs met.' You get $10 million, and all of a sudden all the rules are different.

"It's all about expectations and what the money means. You come up with an understanding of what the money means, and all of a sudden you change the money by a factor of ten. You have to renegotiate the contract. But couples don't realize what the problem is, so all of a sudden he's a 'tyrant' and she's a 'bitch.' "

The conflicts caused by overnight wealth–most money arguments, in fact–can be resolved, says Howard Markman.

"The thing successful couples seem to have is a vision for the future. It's like having a road map and not getting caught at every intersection," Markman says. "Once you have a long-term vision, the day-to-day disagreements about money fade away." 

One couple fought about the price of ketchup. The couple was rich, but the wife bought only the cheapest brands.

Debt is called the "marriage monster" because it's the number-one issue couples quarrel about.

Women tend to hate risky investing because they have nightmares about ending up a "bag lady," and living on the streets, if they lose their money.

 

Hunting and Gathering

Men are hunters, women are gatherers–and that includes when they shop. This is an idea right out of one of Olivia Mellan's favorite stage shows, Rob Becker's Defending the Caveman.

"A man needs a shirt–he goes hunting for the shirt, kills the shirt, wears the shirt until it dies," says DC psychotherapist Mellan. "And women gather–they gather this for next Easter, this for their sister-in-law, this for themselves."

 

Men Versus Women

It's no secret that men usually prefer to spend money on cars and stereos while women are drawn to clothing and home fashions. Blame it on how boys and girls are raised. But there may be another reason men like electronic gizmos and can't fathom why a woman pays $80 for a haircut.

"Men would rather spend money on something that can be resold," explains Georgetown psychotherapist Annette Annechild. "Men feel that if they buy a car, they'll make money on the car. If they buy a house, they'll write off the interest. It makes more sense, because men are more linear. When women spend money on clothes and makeup and hair, men view it as a complete waste, because it's not coming back."

 

Why Call a Plumber?

When James takes his family on vacation, they always travel first-class. But when his wife suggested they replace the rickety fence–a $4,000 job–he refused.

"Men hate spending money on other men doing something manly on their house," says Annechild. "Women don't care; they just want it done. I have clients whose houses are falling down around them, and the men are saying, 'I could build those bookcases. I could do that roof.' "

It's not always about money, says Mellan. "Men don't like to ask for help," she says.

 

Go Ask Mom

"The difference between men and women," says one 50-year-old mother of two, is "if the kids come to me for money, I'll just hand it to them and say, 'Is $10 enough?' But men hate opening their wallets. They want to know, 'What's it for? Why do you need that?' And they want the change."

The way to a man's wallet, says this wife, is to hit up Dad for something he understands.

"If they go to him for a new tennis racquet, new running shoes–fine, he'll give it to them because he loves sports. I think the way to get men to spend money is to focus on something they're interested in, whereas women think more about what the other person wants."

 

Travel Bug

The couple loved travel, but they had different ideas of comfort.

A millionaire who owned his own business, he liked to travel on the cheap. On a trip to Europe to pick up a new $70,000 Mercedes, he insisted he and his wife stay at a hostel. He parked the Mercedes a mile from the hostel, and they walked with their bags.

That was the last straw for her.

So the wife made this deal: If her husband paid for the plane tickets, she'd pay for everything else, including restaurant meals and hotel rooms.

And they traveled happily ever after.

What Do You Mean, Stick to a Budget?

Few money discussions bring out more emotions than the notion of budgeting.

"My wife was in tears when I came up with a budget," says Steve. "Nothing changed about our spending. I just thought it would be easier to track."

DC psychotherapist Olivia Mellan doesn't even breathe the word "budget" to overspenders; she calls it a "spending plan."

Budgeting is just like exercise: You know you should do it, but it can be difficult if not painful.

Naturally, McLean financial planner Barry Glassman sees budget battles all the time.

"A client of mine, he works for a tech company, and his options are worth tens of millions of dollars. His wife is upset they pay $79.50 a month for cable. She thinks that's ridiculous."

When another well-off couple sat down to come up with a budget, she didn't want to eat out more often; she didn't care to join the country club. What she did want, her husband couldn't believe.

"Her biggest thing was she needs $6 a day for coffee. He thinks that's ridiculous," says Glassman. "She goes in and orders her half-caf, skim latte, or whatever once or twice a day. It's a line item in her budget."

Who Pays on Dates?

Karen, 40, has a great job and earns more than $100,000 a year. She's single but has a boyfriend, and they split the cost of everything.

"I agree with the idea of a relationship being equal. But part of me feels that some of the courtship is lost," she admits. "I'm pretty old-fashioned. I like when men open the door and when they pay for dinner."

In the old days, it was simple: Guys paid for dates. Now there's more question of who reaches for the check. Some singles think whoever does the asking does the paying; others take turns treating.

Is there a limit to equality?

"We went out the other night, and he was going to the bar to get a Diet Coke, so I asked him to get two," Karen says. "And he turned to me and said, 'You know, it's not an open bar.' "

What a Surprise

What do you give the man everything?

"There's a couple," says Virginia financial planner Barry Glassman, "where he buys whatever he wants. Come the holiday season, come birthday time, come anniversary, she can't find something to buy him. So she has him gift-wrap something he already owns to give to him. So come Hanukkah, she gives him this gift, and he unwraps a sweater, and of course there's no price tag because he's owned it for two years."

Till Death Do You Part

Money fights can really heat up during divorce proceedings. How to divide a house? A business? Stock options?

When one Maryland couple sat down in a mediator's office to hammer out a settlement, the husband wanted half of his wife's family inheritance. There was only one problem with asking for that money.

"They're still alive," the woman says. "He tried to make a claim that he should get half of what my mother and father are going to leave me."

Healing Power of Money

Financial feuds can divide couples, but money can also bring people back together.

"One couple we had, they were splitting up. But they didn't want to pay the capital-gains tax on the sale of their house, so they remarried," says DC financial adviser Susan Freed. "The good news is they stayed married."

 

Isn't It Romantic?

Financial adviser Ric Edelman was appearing on a News Channel 8 TV program when a viewer called in with a question.

"The guy said, 'I want to get married to a woman. We're both 57. However, I have a very bad credit record. I'm in debt; I don't own a home. She, on the other hand, has a good credit record, she's got money, she owns a house. Shall we get married?' " Edelman recalls.

"And I said no. The reason I said no is that under law, you absorb your spouse's finances. She may not be able to buy another house with him as a husband. And worse, if he requires long-term care, Medicare will demand that she use her money to pay for his care.

"This is something most people don't realize who marry late in life. They should live together; they should not marry. It's sad that our tax laws are that way."