Money is the greatest conflict issue in relationships.

“Couples told one survey that they fight more about money than in-laws, sex, work, children or lack of time together..

Money is a very emotional subject. It’s connected to your self-esteem and feelings of value as a person, and to feelings that go back to childhood— rivalry, tension, sadness, excitement, embarrassment. It’s also linked to your family relationships, especially for women.

Do we love it? Surprisingly, most people have negative feelings about money.

Market research on the emotions associated with money found the top answers were worry, anxiety, concern, depression, stress, anger, failure and helplessness—and this was true across all income levels.

Answers like pleasure, freedom and enjoyment came well down the list, in both Australian and American studies.

And we tend to be secretive about money. Many people feel that it measures the importance and success of their whole lives, and so find it harder to talk about than sex or religion. We’re trained from childhood that money is private. We don’t like being compared.

If we don’t have enough, we might feel shame. If we have too much, we might suffer from others’ jealousy or being “used” and asked for help.

Most of us don’t know what our friends or parents earn, and 16 per cent of wives and 32 per cent of husbands don’t know their partner’s income, according to a British study.

No wonder money can be such a hot issue in marriages.

What can be done?
Understand your own money baggage

What can be done?
Understand your own money baggage

What affects your feelings about saving and spending?
In her brilliant book The Secret Life of Money, Valerie Wilson suggests the following:

Childhood training.

Your parents’ and siblings’ words and actions, and also their attitudes that you picked up without them ever being spoken. For example, “I saw Dad work himself into an early grave making us rich, and I over-reacted the other way. I guess I became a lazy party boy.”

Your predisposition

Saver or spender. One British study found that the habit of saving—or not saving—was formed by the age of eight. Believe it or not, there is a pleasure in saving and some people enjoy it best.

For example, Albert grew up in a large family in a poor suburb and was taught to “work hard, be happy living simply and save for a better future”. When he eventually became a barrister with a high income and impressive investment portfolio, he still lived very simply and saved most of what he earned, because “you never know when you’ll need it”. For him the pleasure was not spending the money, but having it—saving made him feel secure, powerful and self-controlled.

He also thought the best thing he could give to his family was this security, and the ability to save and invest well, rather than “all the Ritchie Rich toys” that would “spoil” them. Yet his wife Penny felt he was crazy. Her family had been comfortably well-off, “the middle of the middle”, and she felt no desire to become very wealthy through hard saving and investment. She enjoyed spending money and felt it was unreasonable to keep saying “maybe later” to themselves and their children when they could afford comforts now.

The best way to be happy was to have toys and experiences that Albert had missed out on as a boy. She wanted good holidays, including a trip to Disneyland, to “give the children a broader idea of life”.

Albert made his son earn his first bike by mowing the lawn for six months. He felt this would “teach him the value of a dollar”. His son learned that the bike cost somebody hours of hard labour.

Whose approach do you agree with most?

Whose approach do you agree with most?

If you save too much, you might remind yourself that the whole point of saving is to spend in the future. Delayed gratification is fine, but if you take it too far it’s no gratification at all. If you spend too much, you might remind yourself that saving and investing will give you more to spend in the future.

Your personality.

Are you generally an optimist or pessimist? A British study found people will save if they regard the future as predictable and improving. If they have a gloomy view of the future, they tend to live for now and spend all they can. Are you a risk-taker or not? Competitive or not? These will affect your decisions.

Your self-esteem.

For example, “I’m useless with money. I can’t ever see myself being anything but broke”; “Spending makes me feel loved.”; “I have trouble spending on myself because I didn’t work to deserve it.” These prophecies tend to be self-fulfilling. You will act on what you believe about yourself unless you make a conscious effort to change.

Social expectations.

For example, someone in your profession should drive a better car.

External pressures.

Advertising, media.

Your parents’ socio-economic class.

One researcher found that upper- and middle-income parents say, “We can’t afford it” (even when they can), as a way of controlling their children’s materialism and complacency.

Lower-income parents try not to say it even though it’s true, hoping to shield their children from the money worries and discouragement they feel.

You could examine your own baggage by asking yourself questions:

What emotions do you usually feel about money?

About your own financial performance? What does that tell you?

How high is your financial



What were the top five principles your parents told you about

Either in their words or attitudes.) Are these sensible and still useful, or do you want to rethink them as an adult?

For example, people in upper-income brackets often mention that their childhood training had to do with working hard, saving, investing and being responsible.

Does this make sense? Can it be taken too far?

When you think logically about it, should you tilt your balance one way or the other?

Make your choices

The first step is to understand your feelings and their causes, but this should not give you an excuse to stay with unwise patterns. The next step is to take responsibility for yourself—to learn, think and choose the life you want in cooperation with your partner.

For example, Keith had worked his way up from poverty and now valued himself and others by what they earned and owned.

His son Nigel saw Keith as career-obsessed and an unbalanced person, and valued his mother’s kind character and relationship skills more than his father’s Porsche.

He dropped out of university and spent a few years as a penniless musician.

Later, he decided that was just a rebellion against his father and he is now making his own choices. He has an above-average income, but time and energy for his wife and children. His wife helped him find his own values and they are in control of their life together, rather than letting the past control them.

How do you want to act and feel about money?

Understand your partner’s money baggage

What did they answer above? How can you help each other? Discuss this together—and remember to be gentle on this sensitive topic.

Recognise that “money is power”

Whoever makes the money decisions in a marriage has a large amount of power. Actually, managing the money is not the same as controlling it—in some traditional families, the woman may handle the cash but the man makes the decisions. (In extreme cases, a partner may use money to wield power harshly, for example, depriving a woman of the petrol money to go out until she obeys. That is called financial abuse.)

There are five main ways couples organise their financial affairs:

1. He’s the manager.

2. She’s the manager.

3. An allowance system.

(For example, he works. She gets a weekly amount for household expenses and how she manages it is her business.)

4. Shared management.

He manages some areas (for example, cars, investments), she manages others (for example, the mortgage, holidays) from a shared bank account.

5. Independent management

Separate bank accounts, separate ownership of assets.

No system is right or wrong, as long as it works in practice and feels right for both partners. If one partner feels they are not trusted, respected, cared for or consulted, it’s time to negotiate changes. The key principle is to use power for love, not selfishness.

Yet often it seems the system is not clear. One Australian study asked people which partner controls the money in their house and came up with these confused figures:

• The man, according to 38% of men and 26% of women
• The woman, according to 13% of women and 19% of men
• Both equally, according to 56% of women and 43% of men

Huh? What’s the real story? Are some people in denial or just ashamed to admit what’s really happening? Sounds like men and women need to talk to each other! Another interesting statistic: 16% of people have a bank account that is kept secret from their spouse. What do you think of that? Why?

Educate yourself

Educate yourself

How much do you know about basic money management and investment? Most people know very little (even many who work in finance). Many people feel too poor and hopeless to bother, or too rich and busy to need to learn the basics. That may be why only 8 per cent of people will ever achieve financial security, according to Noel Whittaker. His book Making Money Made Simple is a brilliant introduction to the basics of money. The principles apply whether you’re a merchant banker or on welfare. They’re common sense—but not very common. Here are some:

  • 1. Winners don’t spend all they earn:
    One problem with spending all you earn is that you will have to borrow for emergencies—and that costs you interest. Another problem is that you will never improve your future income through investments. It’s not just poorer people who make this mistake. Many “high-fliers” feel they don’t need to invest because they are earning well today. But if you save $50 per week starting today, how much will you have in 25 years? A whopping $1.4 million! Winning psychology breaks huge goals up into small, achievable steps—and then feels good about them along the way. And it’s never too late to start. You will benefit. 
  • 2. Winners avoid debt like the plague
    They rarely buy now and pay later. This means they avoid paying crippling interest. For example, Bill has $3000 and spends it on electronic gadgets, then buys a $10,000 car with a loan, borrowing at 12% interest. Over five years, the car actually costs $14,200. At the end of that time, it is worth $5000 and he has nothing in the bank.Meanwhile, Liz has $3000 and buys a $3000 car. She saves what Bill spent on repayments and after five years has $14,200 plus her car, now worth $1500. This sets her up to invest in her first flat and a life of wise investment. No wonder the old proverb says, “The borrower is slave to the lender.”1 Of course, borrowing is sensible if:

  • • It will increase your income more than it costs (for example, equipment)
    • You can save by buying now (for example post-Christmas clothing sales)
    • The price is going up faster than you can save
    • Owning it will save time and money (for example, a work car)
    • It’s cheaper to replace than repair, but even then it’s still a risk.
  • 3. Winners don’t borrow for things that lose value
    For example, cars and electronic equipment. It may be quite sensible to borrow if that’s the only way you can get things that increase in value (for example, houses) or productive assets (for example, work tools, education). But borrowing for luxuries is financial suicide. It means you will have less money tomorrow.
  • 4. Winners know the importance of time and rate
    Whittaker shows that if you invest $10,000 at 15% when you’re 20 years old, it will be worth an unbelievable $5.3 million when you turn 65. Someone who invests the same sum at age 50 will have it worth $81,370. The point is that you should start saving as early as you can. Time is money. And money takes time. As Solomon said, “The person who does the right thing will prosper, but the person who wants a get-rich-quick scheme will quickly fail.

And we’d add three more:

  • 5. Give
    Find a cause or charity you believe in, and be generous regularly, starting even when you’re young and poor. It will improve your gratitude and may stop your children being selfish. (Choose a reputable, audited charity and demand accountability.) Most people spend big dollars on security, but if we invested similar amounts in poor children, there may be fewer break-ins and fewer wars.
  • 6. Money is not the meaning of life
    Surprisingly, studies show that when people are freed from worrying about basics like food, shelter and health, they find other things to worry about—themselves and their relationships. Solomon, king of Israel some 3000 years ago, was so rich that Bill Gates only recently exceeded his wealth. Yet he wrote, “Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income.”
  • 7. Don’t value yourself materialistically
    Can you assess the worth of a person by their brand names? If so, that would leave Gandhi, Mother Teresa and Nelson Mandela looking worth- less. The important things in life are not things—they’re people, ideals and relationships. Even if many of us are not formally religious, perhaps we need a reminder that “a person’s life is not made up of the amount of things they own”, as Jesus Christ said nearly 2000 years ago.