“Threats to Marriage in Hard Times”

“Marriage is more than finding the right person. It is being the right person.” ~ Charles Shedd.

 Money is the leading source of conflict in marriage. Money is connected to our deepest emotional needs for security, power, control, independence, and self-worth. Many of us do not understand this, so when we fight with our spouses about money, we really don’t understand what the battles are about.  While  the present economic downturn has affected us all,  it is stressing many marriages to the breaking point.

 Husbands tend to worry most about losing their jobs. Wives tend to worry most about losing their home and becoming destitute. Both worry about being able to afford good educations for their children and a comfortable retirement. These tensions can result in irritability, anxiety, depression, blaming,  shaming, and anger. The increased stress from financial pressures  very often causes  a couple’s sex life to suffer. When there is tension over money, some couples go to extremes as their anxiety increases. Savers tend to become super-savers, spenders often become super-spenders. These over- reactions push financially stressed-out couples farther apart.

 When an economic downturn  suddenly threatens a marriage, it may be the result of problems that were present all along. When times are good and money is more plentiful, people are more tolerant of each other. If  you don’t like the other person, you can go shopping or buy “big-boy toys.” Being able to spend freely can enable you to ignore or cover-up relationship  issues  and family problems. Some  people spend money to ease emotional pain.  When things go bad economically and money is tight, suddenly people have to TALK to each other. Many financial problems lead to more serious marital problems because there is a fundamental communication problem.

 Much marital tension may arise when couples have different attitudes toward risk taking.  In the late ‘90s, the stock and real estate markets were going up, and the spouse who was a bigger risk taker looked smart as the family’s assets grew. Now, as values are going down, the spouse less inclined to take risks may be pointing the finger of blame, saying, “See, if you had just  listened to me, we wouldn’t be in this shape.” This  certainly  can take a toll on a marriage. Does this sound familiar? It does to many!

 If you feel that your marriage is being threatened or even torn apart by financial pressures, what can you do? What should you do? Here are some modest suggestions:

 

1.       Seek professional help. See a marriage counselor. Most issues of conflict in marriage, especially financial issues, are due to problems in communicating.  If you need a referral to an experienced marriage counselor, contact my office.

2.      Consult a financial advisor or CPA who can help you and your spouse work together on your financial challenges. This can include budgeting,  spending, saving, investing, debt management,  financial conflict resolution,  etc.

3.      Realize that the fees you will pay marriage counselors and  financial advisors will be much less than what you would pay divorce lawyers.

4.      Have regular, respectful money talks with your spouse. Meet with your spouse weekly or monthly to discuss your worries over money, review your options,  brainstorm  about solutions, and work together to develop a plan that reduces both partners’ stress.  If emotions tend to run high, have your meetings in a public place, such as a restaurant.

5.      Do Money Dialogues. This is a powerful exercise where you write down an imaginary dialogue  between yourself and Money. On paper, tell Money about your frustrations with it and how Money makes you feel. Share this with your spouse as you feel comfortable .

6.      Fight for your marriage! Don’t let money and communication problems destroy your marriage. Many of us can remember the days of our marriages when we made a lot less money, had many fewer things, and were much happier with each other. Seek to recapture those feelings. Get to know your spouse again.

7.      Watch what you say. Talk to your children about money and the family’s finances TOGETHER. Don’t seek to cast blame on your spouse.

8.      Let go. Purge your need to control or be in control and watch power struggles in your marriage vanish. Talk to one another. Take the TV out of your bedroom. Make love, not war.

9.      Go places together.  Collect experiences, not possessions.

10.  Wives, understand that money troubles directly affect a man’s self esteem as a provider. Husbands, understand that money troubles directly affect a woman’s sense of security.  Live with each other with understanding.

We live in a country with a fifty per cent divorce rate, and financial pressures caused by the present economic crisis threaten to push this even higher. Don’t be part of this dismal statistic. Remember the words of  pastoral counselor Walter Chantry: “How soon marriage counseling sessions would end if husbands and wives were competing in thoughtful self denial.”

Lending To Family and Friends

“Neither a borrower nor a lender be, for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry (thrift).” William Shakespeare (Hamlet, Act 1, scene 3).

Somewhere in the back of our minds, we all have  a mental list of the types of contacts that we dread receiving.  First and foremost is the call in the middle of the night, informing us that a loved one is sick, injured, or dead. Next is probably the fear of receiving a letter from the IRS. If you are like me, high on your list is the dread of receiving a request from a friend or relative to borrow money.

Let me introduce to you a new term---“social loans”---- loans between people who know each other. The decline in the  economy has seen a corresponding doubling of social loans in the last 18 months. The reasons are obvious: the economy in general, job losses, and the drying up of credit through traditional means. The need is obviously very real, but the cost of lending to family and friends can be very great, in terms of both money lost and relationships damaged. Readers of my earlier columns will remember that I have pointed out many times that money issues are the chief cause of family conflicts. Let’s look at some concerns that lending to family and friends raise, and then some possible solutions.
While we want to help our family and even close friends through hard times, we naturally wonder what loaning them money will do to our relationships. What if they can’t repay? What if they won ‘t repay? What tensions will it cause in the family? Will we dread going to family reunions? If I lend to my relatives, what will my spouse think? Will she or  he resent it? If I lend to Cousin Gomer, will he pester me for more?  Will the money I loan make a difference in my relative’s life, or is it just “throwing good money after bad?” I know that my sister desperately needs money, but I just can’t afford to help her. Should I bail my grandson out of debt again?

First of all, decide if you can afford to make the loan. Can you afford the risk of losing your money if the borrower either can’t or won’t repay? If you can’t afford the risk, don’t make the loan.  Second, decide if it would be best to make  a loan or make a gift. A loan carries with it expectations of repayment, and if those expectations are unmet, then relationships suffer, and suffer, and suffer…………     Third, if you decide that you can make a loan, treat it like a  business transaction in all respects.  Get a promissory note with a reasonable interest rate. Please note that the IRS imposes restrictions on certain interest free loans, so get professional advice. Get security for the loan. Security can be a mortgage, an assignment of wages,  a vehicle title, or  valuable collateral that you can hold, such as stock certificates, jewelry, etc. Fourth, get a third party advisor, such as your CPA or attorney to close the loan and collect payments. This helps to remove the personal aspect from the transaction. Make it plain to the borrowers that in the event of non-payment, they will be dealing with the advisor and not with you. It is human nature to believe that our family and friends won’t be as tough on us as will a disinterested third party. However, from the lender’s perspective, the more businesslike you can make the lending transaction, the more seriously the borrower will take it.

If the borrower can’t or won’t repay, then all is not lost. You may be able to take an income tax deduction for a bad debt. These losses are treated as short term capital losses. They may be used to offset capital gains, and the excess can be used to offset ordinary income  to a maximum of $3,000 per year. Unused losses may be carried over to future years. In order to get a tax deduction for a bad debt, it is essential that you have the proper documentation. At a minimum, this means a signed promissory note and evidence of your attempts to collect on the debt.

What about co-signing a relative’s or friend’s loan with a bank or other commercial lender?  Bad idea! When I was growing up, my father told me time  and time again to never,  ever co-sign or guarantee someone else’s note unless I had both the ability AND the  intention  to repay the debt in full. If you co-sign  a loan, the chances are very high that you will have to make good on it. This is called being surety for a debt, and we find warnings against this practice going back to ancient times. Having to pay someone else’s loan you co-signed is like showing up at a banquet after the meal is over, and being forced to pay the bill.

Social loans to family and friends often create more problems than they solve. While lost money often can be replaced, broken relationships are so difficult to repair.  Some of the truest words ever written about money and relationships are found in Proverbs 22:7, “…the borrower becomes the lender’s slave.” (NASB). Slavery is the most unequal and undesirable of relationships.

Financial Anxiety

“Be anxious for nothing,…” are familiar words from the New Testament book of Philippians. Although many of us believe that we should indeed live that way, we are asking ourselves how this is possible. How can we help being anxious when everyone’s speech is peppered with words like “financial crisis, economy, bail-out, default,  stimulus, recession,  nationalization, socialism, etc. ?  Wherever we go, people are talking about the economy. In our homes, at work, at church, at the dentist’s office, at the grocery store, it is THE topic of conversation.  Almost everybody is seriously worried. The specific term for this feeling of worry is anxiety. My copy of Chaplin’s Dictionary of Psychology defines anxiety as the “…feeling of mingled dread and apprehension about the future without specific cause for the fear.” Fear is different from anxiety. Fear is something vivid from which to escape. Anxiety is the perception of danger looming but with uncertainty about the nature or direction of the risk.

Anxiety is about ambiguity and uncertainty. We are all wondering: How will this financial mess affect me and my family? Will I lose my job? Will the value of my home and investments recover? Can I afford to retire? How will I pay for my children’s education? Will my taxes go up? What makes us anxious is the great unknown.

Certainly, I am not attempting to minimize the seriousness of our nation’s economic problems, nor am I advocating a “head in the sand” type mentality. What I do suggest is that we refuse to be controlled by financial anxiety. Let’s look at what we can do to deal with these issues. First of all, stop looking for a catastrophe. Many people have a tendency to assume the worse and make bad things catastrophic.   Don’t fall victim to “the sky is falling” type of news. Don’t confuse general economic conditions with your personal situation. Get a clear picture of your personal finances. Assess your financial strengths and weaknesses. Do recognize that television news is repetitive. When we are continually surrounded by negative thinking, our ability to reason and solve problems becomes diminished. This fuels anxiety. Do remember that “bad news sells newspapers, “ and that television commentators, radio talk show hosts, and the print media become popular and thus successful by being sensational and confrontational. Do avoid negative, alarmist people, for they drain you of positive energy. Also, avoid the “all or none” mentality when considering financial matters. Don’t make a bad situation worse. Recognize that a downturn in the economy, even a serious downturn, is not the same as a total collapse.  A recession is not the same as a depression.

Second, approach your personal financial situation logically. When you encounter financial information that makes you feel anxious, ask yourself these questions:
What does this information represent to ME: (1.) a minor inconvenience, (2.) a major inconvenience, or (3.) a genuine catastrophe? In reviewing these things, keep in mind that we often make an error in thinking that just because something is possible, it is also probable.  A wise man once said: “My life has been a series of terrible misfortunes, most of which never happened!”

Third, be proactive! Prepare an action plan for your finances. Remember when we were in school and had fire drills? Consider your action plan as a “financial fire-drill.”  Begin by defining the problem. Next, figure out the desired outcome. Finally, develop action steps to deal with the problem and move toward the desired outcome. At this point, you may wish to get the assistance of an experienced financial advisor. Following the impersonal, generic advice of a radio or television talk show host or reading  popular financial self-help books  are no substitute for sitting down with a concerned counselor or advisor who takes the time to get to know you and your family.

Fourth, if you feel yourself becoming overwhelmed with financial anxiety, practice what I call “worry management.”  Ask yourself these three questions: (1.) What can I control today?  If you can control it, then do it. For example, you decide you can immediately reduce your spending by limiting dining out, stopping recreational shopping, and paying cash instead of using credit cards. (2.) What can I control later on?  For example, you prepare a financial contingency plan to deal with significant financial emergencies. You establish a home equity credit line, determine the requirement for emergency borrowing from your 401(k) plan at work, and get the coin collection you inherited appraised. (3.) What can I never control?  Do not; repeat: DO NOT worry about those things! For example, the great majority of us have absolutely no control about what happens in Washington. Realistically, all we can do is express our opinions to our senators and representatives in Congress, and vote. Instead of worrying about things over which you have no control, spend your time and energy on things that you can influence.

Fifth and finally, focus on positive things. Make detailed lists of the good things you can identify about your financial situation. Realize that having less is not the same as having nothing. This reminds me of a proverb that my mother repeated over and over when I was small:  “I wept because I had no shoes, until I saw a man who had no feet.”

Recognize that just because some people are having trouble does not mean that you will have trouble. Consider keeping a  Gratitude Journal in which you daily write of the positive material and non-material things for which you can give thanks. Count your blessings; they are so much greater than most of us realize!