Katie Dunsworth and her husband were financial opposites.
Although the two earned comparable paycheques, Ms. Dunsworth, a self-described shopaholic, was spending all of her salary while her husband was saving half of his. Luckily, the couple worked through their money woes and got their financial house in order before last year's economy collapse hurt one of her two small businesses.
"This year my salary is half of what is was last year," she said. "We talk about money all the time now, checking in on our accounts and trying to focus on the big picture."
But instead of feeling down, Ms. Dunsworth says she is reassured that she and her husband have a common financial plan. "These conversations give me all this resolve to get through this tough time with my husband. In a way, I am happier than I was a year ago."
Money is one of the main reason couples fight. And since times are tough, you would think there are plenty of marriages breaking up.
But recent research suggests that instead of driving them to divorce court, the current economic and market turmoil is drawing some Canadian couples closer together.
In some way, the financial adversity has brought couples together. Investors Group Christine Van Cauwenberghe
A poll conducted by Investors Group found that in the last year, 39 per cent of married and common-law partners have made a better effort to work together when making financial decisions. One in four said they are talking about money more often.
Fears over disappearing jobs, soaring debt levels and plunging investments have forced couples to sit down and discuss their damaged finances, says Christine Van Cauwenberghe, director of tax and estate planning with Investors Group in Winnipeg.
"The money is not flowing as easily as it was. Instead of spending fast and loose, people are talking to each other more about money," she said. "In some way, the financial adversity has brought couples together."
That said, there is still plenty of he-versus-she bickering going on out there about dollars and cents - mostly about spending them. Among those polled, 27 per cent said they argue about money and spending habits while only 9 per cent listed borrowing and debt as the root cause of their money quarrels.
"Interestingly, the major arguments are about the spending of money, not the borrowing of money," Ms. Van Cauwenberghe said. "The unplanned purchases - the ones that the other spouse does not know about - that is what makes people mad."
Although budgeting, saving, spending and investing are not the sexiest topics around, experts agree that couples need to be united on the direction of their family's personal finances. Without direct communication, financial differences, misunderstandings and insecurities can tear a marriage apart.
Kelley Keehn, a financial expert and author based in Edmonton, says that in most unions - like Ms. Dunsworth's - there tends to be a spender and a saver. Generally, one person emerges as the money manager, the one who pays the bills, negotiates the mortgage and steers the investing decisions. Problems arise when the couple are not clear on the other's money personality and are not on the same page about the family finances.
"Maybe one person is spending too much and has no clue that they are. On the other hand, the other person feels as if the financial situation is melting down and that they are doing all of the work," says Ms. Keehn. "When times are bad, that can seem like a big job to take on. For some people, their whole lives have come crashing down."
Once the couple is aligned, they should determine their financial roles and understand who is responsible for what. Having a clear designation should cut down on the arguing.
Join financial author Kelley Keehn in a live discussion on couples fighting over money at noon (ET) on Tuesday, June 23nd. You can get a jump on the queue by submitting your question here.
Ms. Van Cauwenberghe says there are specific financial and tax strategies that can help Canadian couples. For instance, two people can put as much as $10,000 a year into a tax-free savings account that allows them to save for any purchase they choose, without being taxed. If one half of a couple is unemployed, they can direct their remaining income in a way that will divide their pension income in future years. Seniors, meanwhile, can look at pension income splitting to reduce their tax bill.
For younger couples, it all comes down to budgeting. "Most people today are not getting bigger paycheques so the only way to increase the amount they save is to cut down on their spending. Look at the numbers and see where your dollars go on a monthly basis," Ms. Van Cauwenberghe says.
Ms. Keehn, who worked as a financial planner for 12 years, has three tips for couples looking to put their financial house in order:
1) Have a formal monthly money meeting. Plan to have a conversation about the family finances each month. Talk about whether it makes sense to take that Hawaiian vacation this year and deal with any issues, such as one spouse feeling undervalued because they are not working. If the topic is suitable, for example renegotiating the home mortgage, involve the kids. If, however, the couple has deep-rooted and prolonged fights about money, they will likely need to seek professional financial help.
2) Set aside part of the family income for yourself. Although the family finances are a joint venture, make sure you have separate accounts for some amount of personal spending money (it can be small) that you do not have to explain to your partner. This kind of personal slush fund, which can be used for new golf clubs or a day at the spa, will cut down on the fighting over who is spending money on what.
3) Talk about the financial and emotional impacts of investing. Investment styles and risk-tolerance are specific to each individual, but in many cases Ms. Keehn says women tend to be more risk-averse than their male counterparts. Deciding when and if it is a good time to dive back into the stock market can be an emotional subject, one that needs to be addressed. "I see tons of couples, fighting about this, especially right now," she said.
Roma Luciw is a writer and web editor of the Globeinvestor.com personal finance site. Please send any comments and story ideas to firstname.lastname@example.org.