Money & relationships for web

Prof. LawrenceBus. 12

Money and Relationships

Money and relationships4 models for sharing a financial life Class exercise: financial and emotional consequences of the 4 models 5 rules of good communicationClass exercise: Practicing good communication skills

Most common causes of divorce:

•Poor communication•Money problems•Lack of commitment to the

marriage•Dramatic change in priorities• Infidelity

Source: American Academy of Matrimonial Lawyers

Jessica and Sam

Practical problem for a young couple just starting out:

How to share income and expenses?

Let’s meet the couple…Jessica: Sam:

• Is working towards her nursing degree at SJSU.

• Works part time as a medical assistant at a local hospital.

• Owns a car, which she uses to commute to school and work.

• Enjoys eating out and going to movies.

• Aspires to have a fabulous honeymoon.

• Completed his degree in civil engineering at SJSU last year.

• Recently got his first full-time job working for the City of San Jose.

• Commutes to work by light rail.

• Enjoys playing poker. • Is a sharp dresser.• Uses Jessica’s car when

they go out together.

Jessica’s monthly budget:

Take-home pay:

$ 2,000

Personal expenses:

$ 500 tuition and fees 100 books and school supplies 200 car payment

50 cell phone 150 clothing, toiletries Total: $1,000

Sam’s monthly budget:

Take-home pay:

$ 3,000

Personal expenses:

50 transit pass 100 poker club

50 cell phone 500 clothing, toiletries Total: $ 700

Joint monthly expenses:

$ 1,000 condo rental & fees 500 groceries and supplies 200 utilities - PG&E, Comcast 300 entertainment (movies, eating out, clubs)

Total: $ 2,000

In addition, Jessica and Sam have decided they want to save money to pay for their honeymoon. They would like to save $500 a month, if possible.

4 models for sharing a financial life:Model 1: EQUAL AND INDEPENDENT

At the end of one year…• How much money will be in

Jessica’s personal account?• How much money will be in

Sam’s personal account?• How much money will be in

the joint account?• How do you think they will

each feel about their financial situation?

• How do you think they will feel about each other?

• What kinds of conflicts might arise?

4 models for sharing a financial life:Model 2: PROPORTIONAL CONTRIBUTIONS








4 models for sharing a financial life:Model 3: SHARE EVERYTHING








4 models for sharing a financial life:Model 4: SHARE EVERYTHING WITH A PERSONAL ALLOWANCE








What are the pros and cons of these 4 models? Which do you think would be most appropriate for Jessica and Sam? Are different models appropriate for different kinds of people, or people at different life stages? Can you think of any other possible models?

Five basic rules for communicating effectively about money in a relationship:

Rule 1: Make an appointment.

BAD WAY:Jessica: [as soon as Sam gets home

from work] Your poker spending is completely out of control!

Sam: For heaven’s sake, Jes, the boss just yelled at me, and now you!

Rule 1: Make an appointment.GOOD WAY:Jessica: I’d like to talk with you

about your poker playing. Is now a good time?

Sam: No, I just got home from work, and I’m stressed out. How about tomorrow morning?

Rule 2: Start with an “I” statement.

BAD WAY:Jessica: You’re spending way, way

too much at the poker club. It’s a ridiculous waste of money.

Sam: No, I’m not! $100 a month isn’t that much, considering what I’m making now. And, you spend more than that on your fancy car!

Rule 2: Start with an “I” statement.

GOOD WAY:Jessica: I’m concerned that you are

spending $100 a month at the poker club.

Sam: I didn’t know you felt that way. Why are you concerned?

Rule 3: State your interest (not position).

BAD WAY:Jessica: I want you to stop playing

poker. Sam: It’s my money, and I’m going

to spend it the way I want to.

Rule 3: State your interest (not position).

GOOD WAY:Jessica: I really want a fabulous

honeymoon, and I’m worried that we aren’t saving enough.

Sam: I didn’t know you felt that way. You don’t think we’re saving enough for our honeymoon?

Rule 4: Use facts, not opinions.BAD WAY:Sam: I’m sure we’re saving

enough. I heard there are some cheap charter flights to Hawaii, and my friend stayed at a great hotel in Maui for just $95 a night.

Jessica: We couldn’t possibly get those kinds of deals during the peak tourist season.

Rule 4: Use facts, not opinions. GOOD WAY:Sam: How much do you think it

would cost for the kind of honeymoon we want?

Jessica: Let’s go online and do some research on air fares and hotel packages around the time of the wedding.

Rule 5: Invent “win-win” solutions.

BAD WAY:Sam: I’m doing a hard job, and

poker is one way I can blow off some steam and have a little fun. Besides, I’m becoming a pretty good player, you know.

Jessica: Our honeymoon is much more important than your poker game.

Rule 5: Invent “win win” solutions.”

GOOD WAY:Jessica: I hear you saying that you

enjoy poker and like to blow off a little steam with your friends. What if we hosted a party at the condo once a month for a friendly poker game? We could provide beer and snacks.

Sam: That’s a good idea. We could even play for chips, instead of real money. If we saved an extra $100 a month, we might even be able to afford to stay at the Westin.

Conflict (especially about money!) is inevitable in relationships……the point is to resolve conflict constructively

and to use it to build, rather than weaken, the relationship.

Class exercise: Practice the 5 rules, using the handout provided. Class report-back.

Money & relationships for web

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