By: Jessie Bruyn
IF YOU AND YOUR partner are like most couples, chances are, you fight about money. Numerous studies have shown that money is the No. 1 reason why couples argue — and many of the recently divorced say those battles were the main reason why they untied the knot.
While anyone will tell you that talking about money is the first step in resolving problems, talk alone won't do the trick.
In fact, a 2004 study commissioned by SmartMoney magazine and Redbook, another Hearst publication (SmartMoney magazine and SmartMoney.com are jointly published by Dow Jones and Hearst), found that more than 70% of couples talk about money on a weekly basis. So what's the problem? "Most of us don't know how to talk about money," says Mary Claire Allvine, a certified financial planner (CFP) and co-author of "The Family CFO: The Couple's Business Plan for Love and Money."
"People tend to be emotional and reactive about money, not strategic," she says.
When emotions run high, people tend to make fiscal mistakes. Allvine's solution: Approach family finances as if you were running a business. "If you put a business metaphor into the picture, you'd be surprised how much more methodical people are."
And so, to help make your next state-of-the-financial-union meeting run smoothly, we've assembled a collection of the six most common mistakes couples make when handling money issues, along with some advice on how to correct them. Do yourself a favor: Make sure all board members review this before you talk.
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