Personal Finance News Friday 4/27

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Can Money Mismanagement Kill Your Marriage?
By Katherine Lewis | Bankrate.com – Thu, Apr 26, 2012 10:34 AM EDT

Money: The root of good and evil

Money is infamous for becoming a sore point in a relationship -- and with good reason. Money means more to us than just dollars and cents. It can signify security, freedom, love, spontaneity. Investing that money -- for our retirement, children's future or other goals -- turns an already-fraught conversation into a high-stakes set of decisions.

"It's so emotionally loaded, representing power, security, control, self-esteem," says Olivia Mellan, author of "Money Harmony." "You're not just fighting about the money; you're fighting about what the money means."

How do you manage money as a couple without sacrificing your love or your portfolio? Whether you're newlyweds ready to buy a first home or long-married partners who have amassed enough assets to need an investment strategy, the path to a mutually agreeable money management and investment plan incorporates several important elements.

Begin with sharing goals, understanding each other's perspective, swearing off secrets, and preparing yourselves for the inevitable change in course when the markets or your jobs don't go your way, and you need to re-evaluate your strategy.

Get on the same page

To lay the groundwork for a common money management plan, sit down with your partner and look over all your financial statements together. Make sure you agree on the numbers when it comes to your family income, expenses and net worth.

Surprisingly, research suggests that men tend to overestimate their wealth, while women underestimate it, says Jay Zagorsky, an economist at Ohio State University. According to a study on this, "half of all couples provide family income values that differ by more than 10 percent and net worth values that differ by more than 30 percent."

"Before sitting down and doing these specific numbers, have each person sit down and write on a piece of paper his or her best guess," and then compare the paperwork, Zagorsky says. "If people actually talk about it ahead of time, they can head off many arguments."

Be sure to include real estate, significant personal property and financial assets in your discussion. And when you review your household budget, look at the figures for what you actually spend each month -- not what you wish you could spend. These numbers provide the context for your money management and investment decisions.

To read the entire article by Katherine Lewis | Bankrate.com:
http://finance.yahoo.com/news/money-mismanagement-kill-marriage-070046236.html

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