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credit & debt

5 Sources of Financial Friction for Couples

Follow these techniques to identify money conflicts and ease tensions.

What your spouse or significant other spends (or doesn’t spend) on you this Valentine’s Day could determine the future of your relationship in ways you didn’t anticipate.

A study by researchers at the University of Michigan, the University of Pennsylvania and Northwestern University found that when it comes to money, opposites do sometimes attract. In particular, spendthrifts tend to marry tightwads. It seems that spendthrifts don’t necessarily like their tendency to overspend, so they try to compensate for it when choosing a mate. Same thing with tightwads, who aren’t pleased with their penchant for pinching pennies.

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But instead of happy-ever-after endings, such odd-couple matchups just lead to fights about money. So if your beau buys you a bouquet of posies when what you really wanted was a diamond bauble, watch out. There could be trouble ahead.

Spending habits aren’t the only source of financial friction in a marriage. The most effective way to ease tensions is to identify conflicts as soon as possible and meet each other halfway (see 4 Critical Money Questions to Ask Before You Get Married). But you also need some practical money-management techniques to help defuse these five financial flashpoints:

Marching to different drummers. Don’t assume that your spouse has the same goals you do. You may want to save for a house while he has his eye on a new car. Get your dreams out in the open and be ready to compromise. He may have to settle for a less-expensive car, and you may have to resign yourself to renting an apartment for a few more years.

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Spending too much -- or too little. In addition to writing down your goals, run the numbers to see whether you’re on track to achieve them. Once you see where you stand in terms of dollars and cents, the spendthrift may be convinced that you need to beef up your saving, or the tightwad may feel more comfortable about spending more. Another solution: Each of you gets a slush fund to spend as you wish, with no questions or recriminations. Or you could agree that on purchases above a certain amount -- say, $500 -- you’ll consult with each other before buying impulsively.

Passing the buck. Even with two spendthrifts, one spouse generally ends up keeping the books -- a situation that can make the bookkeeper frustrated about being stuck with a thankless task, or the other spouse resentful about being out of the loop. Sometimes the solution is as simple as taking turns managing the checking account, or having regular conversations so both of you know what’s going on. If all else fails, you can always hire a bookkeeper.

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Taking risk -- or not. One of you treasures the security of bank CDs and the other wants to take a flier on gold. Both of you can feel satisfied if you realize that investing 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 leery about moving beyond the safety of a bank, start with a total-stock-market mutual fund that spreads your risk among thousands of companies. If each of you has an IRA or retirement plan, you can decide how to invest your own money in it.

Joint or separate accounts? There’s no right or wrong answer, just the one that both of you can agree on. Nowadays, many couples seem to start out by maintaining accounts of their own and pooling money for household expenses. But if your marriage develops into a strong relationship, you may feel more comfortable about combining your resources (see Should You Use Separate or Joint Accounts?).

In fact, if you can play to your respective strengths and compensate for one another’s weaknesses, even an odd-couple marriage can turn into a smash hit.

This column is adapted from Janet Bodnar’s book, Money Smart Women.

Follow Janet’s updates at Twitter.com/JanetBodnar.

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