New Jersey bankruptcy Article

New York Times
By Carl Richards, May 14, 2012

Years ago, my wife and I had dinner with another couple, whom I’ll call Bob and Sue. During the meal, we discussed money, the market and our goals and dreams for our families. Then we started talking about retirement, and that’s when Bob got a big surprise.

Sue mentioned that traveling more was her primary goal for retirement. As Sue talked about her travel plans, I looked at Bob and could see he was shocked. Bob then admitted that he’d never heard Sue say anything about travel. “I didn’t know it was a goal,” said Bob.

What made this so surprising is that Bob and Sue had been together for over a decade in a solid relationship. Clearly, even the most engaged couples or partners don’t automatically cover all the bases when it comes to the big stuff, which means we need to make a concerted effort to do better.

More than once, I’ve been in client meetings where it’s clear that couples are having their first discussion on big decisions — kids’ education, saving, even retirement. Without fail, either one or both individuals is surprised, if not shocked, by their partner’s opinion on a topic. So from what I’ve seen, it seems obvious that the more conversations you have about money before you have to make major financial decisions, the happier you’ll be in your relationship.

I think it’s safe to say the rules apply to whatever relationship you’re in, whether it be personal or professional. Having the conversation before the decision gets made can make a huge difference in not only your happiness, but also the long-term success of your relationship.

Here are a few things I’ve found that can make a difference:

1. Set a spending threshold

Often our biggest arguments come from surprises. For instance, one of the easiest ways to start an argument is for one spouse to make a big purchase without telling the other. I’ve found it helpful to set a predetermined limit. You choose what it is. Depending on your budget it may be as little as $50 or as much as $500. The point is that you discuss it with your partner.

2. Talk about education.

It may seem odd, but one of the most common disagreements I see between couples revolves around their children’s education. One parent may say, “I supported myself and paid for my school. It’s better for our kids if they do that, too.” The other wants to pay for the best school the kids can attend, no matter the price. The point isn’t that one is right and the other is wrong. Since it’s a topic that can raise strong feelings, it needs to be discussed, preferably before the first child is a senior in high school and sending out applications.

3. Decide where to live

Some people really want to own a house, others don’t mind renting. Couples need to have this discussion because it can be an emotional decision. There needs to be an honest conversation about expectations on both sides and what’s right for you as a couple and family. I also can’t emphasize it enough: Don’t view your home as an investment. Buy a house for reasons that aren’t connected to selling it again in a year. Otherwise you may head down a road that causes frustration in the future.

4. Talk about vacations

Because big dollars can be involved, you need to talk through your vacation expectations. You need to be honest with each other about a budget that makes sense for travel and put it in the context of your other financial obligations. The last thing you want to do is go on vacation and then come home only to be shocked by the credit card statement.

5. Review your retirement expectations

The way we think of retirement is changing, and you need to discuss it with your spouse. You may be in the camp that says, “I’m working for 40 years and then I’m done.” However, I’m seeing more people say they want to work long enough to then be able to do something that’s less stressful but more fulfilling. Talk it through and be clear about what’s important to you.

At this point, you may be wondering how to get started. Here’s a few ideas:

Each month set aside a specific time and place to talk. Doing so can help you avoid tricky conversations when they’re least expected or when you may already be irritated by something else. By setting aside time, you can prepare and know what to expect. There may still be disagreements, but because you’re talking about money regularly, it’s less likely to get blown out of proportion.

Also, have a “no shame, no blame” rule. Many discussions around money can end in heated arguments. Take the heat out by giving both individuals permission to have these discussions without shame or blame. The point is that you’re talking through the problems. Then, take responsibility for your actions. While there shouldn’t be any shame, with every discussion you should commit to learn from your mistakes and move forward.

Write the decisions down so you can track your progress. A benefit of monthly meetings is that you can assess how you’re doing, but it requires keeping track of what you’ve agreed to do. Write things down and revisit them during your meeting. Have you made progress? If not, what needs to happen? The list can be a great way to manage your monthly conversations. Don’t be afraid to use it and hold each other accountable.

Finally, automate your decisions. If you decide it’s important to save $200 for education every month, give this decision a head start. Work with the institution that’s holding your savings to make the payment automatic. It will give you one more thing to check off the list and save you from having to remake the decision monthly.

Talking about money with our spouse or business partner doesn’t have to be a scary or stressful affair. In fact, I think we can dial down the stress significantly when we have a better understanding of what matters to the other person in our relationships. It also doesn’t hurt that we get the added benefit of greater financial success in our lives by talking through these big financial decisions before they become critical.