Love, Relationships and Finance: Human Emotions vs. Human Money pt. 3

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You say our investment styles should be in sync. Why?

People have different tolerance levels for risk. Some are very conservative when it comes to in vesting. They want steady growth and a consistent income over the years. Others are willing to accept potential short-term losses on investments that promise greater returns in the long run. Still others are willing to invest in something that carries significant risk if there’s potential for a very large gain. But far too many people haven’t discussed how much risk they and their partners are willing to take with their shared wealth.

What if my future partner’s attitude toward money is very different from mine? Do you believe that people can change their financial attitudes and habits simply by talking about them?

Yes, we do. For one thing, if you can state clearly and frankly what you find admirable, on the one hand, or problematic and troubling, on the other, about the way your loved one deals with money, then your point of view is known to both of you. Second. once you start talking honestly about money, you will be better able to understand the basis of each other’s attitudes and behavior. This will help you both to compromise on issues of money management. For instance, if you know that a partner who seems to be unreasonably reluctant to spend money is probably simply afraid of losing what he or she has—believing that there isn’t enough wealth in the world to go around -- you may be more patient in your approach to him or her. If you’re aware that a fast-spending partner is attempting to use money to compensate for a lack of self-esteem, you and your partner can work together to resolve this deeper issue. The goal in every case is to gradually build a financial relationship that satisfies both of you. Remember, though, that worthwhile changes often come slowly. Promise each other you will keep your conversation about money going.

My fiancé always ends up getting upset when we talk about money. Why?

The way people talk about money—their expressions, their tones of voice, their timing—can be as revealing as what is actually said. Remember, for most people, talking about money is an intimate and unfamiliar act. If your fiancé gets angry when talking about money, that in itself is a very important key to his feelings about money and may be, at least partly, a result of the way he was raised.

How does a person’s family background affect his or her feelings about money?

How people have been raised has a huge effect on how they view and manage money. The odds that you and your fiancé come from identical financial family backgrounds are pretty slim. We’re not talking about how much money your family or your partner’s family had when you were growing up; we’re talking about how the subject of money was handled. Was money a source of anxiety, embarrassment, or conflict? Was it discussed openly? In urgent whispers? Not at all? Did one parent over spend, while the other watched every penny? Did the family pretend it had more money than it did? Do you or does your partner feel embarrassed about your economic background? Any number of childhood experiences can create fear, shame, or anger about money, any of which can inhibit open discussion and wise management. Our advice, once again: Keep talking, calmly and compassionately, until you get all this stuff out in the open. Get to know the person you’re going to marry in a financial way, and you will know him or her better than you ever imagined. The same, of course, applies to you.

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Sunday, May 4, 2008 9:30