FAMILY FINANCES


Secrets to Marital and Money Bliss

2. Passing the buck. Whether by design or default, one spouse generally ends up as the keeper of the books -- a situation that can make the bookkeeper bitter at being stuck with a thankless task, or make the other spouse resentful about being out of the loop. Sometimes the solution is as simple as taking turns managing the checkbook, or having regular conversations so that both of you are clear about what's going on and resentments don't fester.

Role reversal, in which each spouse does something characteristic of the other, is another way to resolve financial differences. For example, a hoarder might indulge in a spur-of-the-moment purchase, or a spender might slip some money into an envelope and put it aside. Then you can compare notes and reward yourselves (not necessarily with money).

And if all else fails, you can always hire a bookkeeper.

3. Taking risk -- or not. One of you treasures the safety of a bank certificate of deposit, while the other wants to take a flier on biotech stocks. Often it's men who are the risk-takers -- sometimes to a fault -- perhaps because they feel more confident in their ability to earn back any losses.

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You can come to terms with different tolerances for risk if each of you realizes it doesn't have to be all or nothing. To control an impulsive investor, set a limit on how much he or she can risk -- say 10% of your assets. If you're reluctant to move beyond the safety of a bank, take it one step at a time by investing in an index mutual fund -- such as Vanguard's Total Market Index fund, which spreads the risk by investing in the entire stock market.

If you still can't reach an amicable agreement, you might seek investment advice from a neutral third party, such as a financial planner, who can act as a buffer to absorb some of the worry -- and any blame.

4. Merging your assets. To pool or not to pool? There's no single right answer to that question, as long as at least one of you is responsible for paying the bills and you're both comfortable with the system you've chosen.

For the sake of convenience, expect to meet each other halfway. It's easier to pay household bills from a joint account, for example, to which you both contribute based on your income. Nowadays, with the tendency of both spouses to be employed when they marry and to continue working, it's understandable if you each want to have a savings or checking account of your own as well, so you can spend money with no questions asked.

Women shouldn't fall into the pattern of taking over management of day-to-day concerns while their husbands make the big decisions about saving for college or investing for retirement, for example. He doesn't necessarily know anything more about these subjects than she does. And each person should be privy to the big picture in order to be an equal financial partner in the relationship.

Saving marriages

Now let's return to the three financially dysfunctional couples I introduced earlier. Can their marriages be saved -- or should they even take place? Yes, if the couples are willing to follow the advice I've outlined.

For Don and Louise, who chafe at each other's spending habits, the solution is separate "slush funds" with an agreed-upon amount of money that each of them can spend with no questions asked. But they should have a single account for household expenses, and they should consult with each other about major household purchases above a certain amount.

Carlos and Maria, whose relationship was strained because Carlos, the breadwinner, criticizes Maria for being unable to stay within the allowance he gives her, could benefit from role reversal. He should become more familiar with the bills she's struggling to pay. She might consider a part-time job that would help the family finances and raise her standing in their relationship.

Peter and Gabrielle need to talk more about their goals to make sure they're in the open, and in sync. Gabrielle assumed that Peter would want her to re-create the meals, and the environment, of his home country. If that's not important to him, she'd be better off spending time and money on other things that have a higher priority with both of them.

In each relationship, communication and mutual respect would go a long way toward making a successful marriage.

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