Myth #13: Expensive Gifts = True Love (part 2)

We live in a hyper-consuming culture. It is assumed that we have to join the frantic rush to buy and give expensive gifts. And these days expensive is the norm—a CD costs $17, a good set of roller blades runs $150.

Here’s an alternative approach to holiday gift giving. Write down all the people that you bought gifts for last holiday season. Try to remember what you bought and how much you spent (not an easy task for most people). Take a really hard look at the list.

What could you do this year that would really make a difference to that person? What would really touch them? How much do you really have to spend? Could you spend half as much as you did last year—in a very thoughtful and loving way?

Now look again at your list. What alternatives do you have to buying them expensive gifts? What if you had a dinner party for half the people listed? How about sitting down and writing some of them a personal letter? For the children, how about going a little out of your way to do things with them? Where could you take them that would provide as much, if not more, pleasure as the new toys they typically receive—and end up neglecting a few days later?

Determine up front exactly how much money you will allocate for the holidays, and then stay within this limit. Most of us don’t. We approach holidays without a plan, and end up spending impulsively. Ever bought a gift you knew was too expensive simply because you were out of time? The cost of this approach can be staggering!

Now let’s look at the current fad of extravagant birthday parties for little kids. Profitable companies have sprung up to provide these “essential” services for overly-busy baby boomer parents.

When my daughter Lydia was four, she went to a birthday party where the hosts rented ponies for the kids to ride. They also rented costumes for each child. The boys got cowboy outfits, and the girls were dressed up like floozies in saloon dresses and feather boas. A photographer was hired to take pictures of all the kids. (We then had the opportunity to buy the pictures, of course!) The hosts probably spent $2,000 on this party, and the birthday boy was four years old.

I was in a beauty salon not too long ago. Sitting there, I couldn’t help but notice all these girls about eight or nine years old filling the chairs in the pedicure section, getting their toes embellished. I asked my hairdresser what was going on.

“Oh, it’s the latest thing,” she said. “It’s a birthday party! The host parents buy pedicures and manicures for all the kids who will be attending the party. Then they go out to a fancy restaurant.”

What have we come to? Pedicures and manicures for children?

I am a mom. I know how overpowering the urge is to give great presents and to create great experiences for my kids, especially when my kids see their friends getting these things. But is it necessary? Underneath all these superficial temptations, what Annie and Lydia really want from me is love, affection, and companionship. The other things, the presents, don’t really matter. Often, they’ve forgotten them within a week.

Ask yourself if the gift giving or the extravagant party is accomplishing what you really want. Does it tell the recipients that you love them more? Does it result in them loving you more because you got them something expensive?

Again, I want to emphasize that I am not against gift giving. If you just have to give your sweetie a pearl necklace or the hottest and latest snowboard, then by all means do so. But do so from a conscious and rational point of view. Don’t do it because you feel you must automatically give bigger, more expensive gifts in order to secure and preserve someone’s love—or to demonstrate your love for them.

I have a friend whose father is seventy-nine years old. In the past year he has had several health crises, including a heart attack. His eightieth birthday was approaching. All his kids were trying to decide what to give him for his birthday, and what kind of big party they could arrange to celebrate it.

He sat his kids down and said, “On my birthday, I want to spend time alone with each of you and your children. And from each of you, I want you to write me a letter telling me what you think of me and our relationship.” Their dad had never before expressed such affection. The kids were so touched they could hardly speak.

If you took ten minutes and really told the people in your life how much you love them and what they mean to you, you might find lifelong results far greater than any material gift could bring.

Myth #13: Expensive Gifts = True Love

I know a couple who is drowning in debt. The IRS is after them. Their credit cards are perpetually at their limit. They pay nearly $375 a month in interest, all of it on costly short-term debt. I was helping them come to terms with their spending habits by putting together a Personal Spending Plan when the wife told me, “You have to budget money for the holidays.”

“Okay. What do you need to spend?” I asked her.

“Well, we need presents for the kids and each other.”

“How much will that be?” I asked.

She looked at her husband for a moment and said, “$2,500 to $3,000.”

This was a couple with three college-age kids. The kids were fine, and they didn’t really need anything. In spite of being deeply in debt, this couple felt obligated to buy them expensive gifts. To the wife, it meant spending over $2,500 and charging more on their credit cards to do so.

For her, the holidays were a time to show her love by giving expensive gifts. When I asked whether they would consider scaling back or eliminating the expensive gift giving, they said it was out of the question. Their need to spend a lot on gifts was automatic, one that was repeated each year during the holiday season. They’d never even considered an alternative approach to the holidays.

Where do we get the idea that we have to show affection with expensive gifts? As though Aunt Mary is only going to love us if we buy her that $150 bread maker for her birthday!

Whenever I put together a Personal Spending Plan for a client, I break his or her expenses into three categories. Committed expenses are expenses that have to be paid, such as a home mortgage, utilities, taxes, or car payments. Discretionary expenses are those expenditures in which we have some measure of choice, such as groceries or new clothing. Very Discretionary expenses are for little luxuries, things that are not truly necessary. Often, expensive gifts fall into this last category.

Now, I’m not talking about the small stuff here. An occasional gift of candy and flowers for your sweetheart isn’t going to break the bank, and I’m not promoting an end to giving presents. I’m no Scrooge. What I am advocating is the application of reasonable restraint in gift giving—which has reached runaway proportions in many of today’s families.

Just look under the Christmas tree of most families in America and you’ll see what I’m talking about. Stacks of presents are bulging out from beneath the tree—or two or three gifts for every night of Hanukkah. This is not cheap stuff we’re talking about! It can add up to thousands in a season of unbridled gift acquisition for a family, and tens of thousands over a period of years.

One client comes from a large family, and he could no longer keep up with all of the gift-giving demands in his life. He realized he was giving presents because of an automatic compulsion—just because it was the “thing to do.” He realized that he was giving presents not from the joy of giving, but because he felt obligated to do so. So he decided to find a way to show his love for his family other than buying them presents. He explained to his family that he wanted to stop giving and receiving gifts, and why.

Since going cold turkey and stopping the gift giving, he has not experienced any loss of love from his family. In fact, he feels as loved as ever, and he enjoys the holidays more. The fact that he receives fewer presents from his family than he used to is fine with him. He would rather utilize the time he previously spent hunting for and buying gifts to visit with his family. He saves hundreds of dollars every year. And without saying so, he believes his family members are secretly glad to have one less person on their lists they feel they have to buy for.

Maybe the best gift we can give those we love is our time. After all, how much time do we spend dreaming up an appropriate gift, driving to the store, parking, shopping for it, buying it, wrapping it, and then giving it? What if we gave half that much time to someone by taking a walk in the park with them, or having lunch together?

Myth #12: My Spouse Has It Handled (part 2)

Having a monthly discussion about financial matters is another way to mitigate or eliminate this problem prior to separation or death. The financially-oriented partner can say, “Okay, here are the bills I am paying. Here is what is left to pay by the 31st. Here is what we have saved for retirement this month. After paying the bills, we have this much left to live on for the balance of the month.” He or she might ask the less financially-oriented partner for ideas or suggestions on how to handle their money.

If you are the less financially-oriented financial partner, you might need to tell your spouse that you want to know how the money is handled and where the records are kept. You may need to ask for the information to be explained in a way that you can understand. In some cases, this will be challenging, because you may not like to talk about money. That’s why you may have deferred to your spouse in money matters to begin with. But there can be a cost to this reliance later in life.

Money should not be the forbidden subject or the weak link in your relationship. But it will end up being that way if there is a great disparity in roles, combined with a lack of communication. The disparity in financial roles may not change, but the communication certainly can.

If the passive financial partner is included in money decisions, he will no longer feel like an uninvolved spectator and have to play the role of the dependent child when it comes to financial decisions. He can gain an understanding of the strain it puts on family finances when he constantly asks for money to buy something. The passive financial partner might become inspired to make a real contribution, and share in the financial responsibility.

The key to a successful marriage is communication—especially regarding money. That means having regular discussions about family finances, being willing to ask questions and raise concerns, and offering assistance to the other partner in understanding or actually managing the finances.

Also, remember that another person may need to see information presented in a slightly different way than you. Brad and Leslie exemplified this point. He was extremely detail-oriented. He had spreadsheets and line items from here to eternity to show her in their money discussions. They frequently ended up frustrated with each other and eventually stopped sharing financial information. She just “left it up to him.”

In fact, Leslie did want to know. However, she had a different orientation regarding money. She just needed to know the bottom line. All she really was interested in was how much was left at the end of the month for discretionary spending?

Both partners need to know—as best as is possible—the key points of the joint financial game plan and structure. A good place to start is a joint monthly review of finances—and then an annual review that deals with goals and the long-term financial plan for you as a family.

Both spouses should know where the financial records are. Both should know the location of the safety deposit box, what is in it, and where the keys are kept; both should know what credit cards are being used and how to cancel them, if need be. (This is also true for you if you are single. A relative or trusted friend should know where your financial records are kept and what needs to be taken care of on your behalf.)

I know one couple who trades off the task of paying bills each month. They also trade off filing the tax return each year. This way, both partners are in a position to feel informed and empowered concerning the family finances. It also gives each a break, as the burden is not always left to one person.

Take a look at how money is handled in your relationship. Are you primarily responsible for money decisions and record keeping, or is your spouse? Is there a wide disparity in responsibility and understanding regarding your personal finances? Don’t just accept this disparity as “the way it is.” Explore ways that the disparity can be lessened. Find more meaningful ways to include each other in financial matters. In short, communicate more with each other about finances. Make sure each partner is comfortable about what to do financially should he or she be left alone unexpectedly. Consider involving an outside financial planner to step in to activate some prearranged structures to help in a transition.

It is an act of love to make sure you and your partner have a clear understanding about money. Remember to keep the lines of communication open.

Myth #12: My Spouse Has It Handled

In most relationships there is a partner who controls the financial matters. This person pays the bills, keeps the financial records, and may even oversee the family investments.

In many cases this situation is both natural and productive. The more analytical or detail-oriented person normally should be in charge of cash flow and record keeping. Some people have a knack for these things.

The less financially-oriented partner can certainly be a man, but more often than not it’s a woman. Some women have ideas with respect to money that are false and worth dispelling:

  • I’ll marry Prince Charming and live happily ever after.
  • Women are not capable of understanding financial issues.
  • I’m not good at math, so finances are too complicated for me.
  • He makes the most money, so it’s none of my business.

However, since 95% of women will at some point in their lives be responsible for their finances, either by divorce or death, they need to communicate with their partners.

Problems often arise when couples fail to communicate. The person who pays the bills and who is responsible for cash flow in the household may begin to feel like the yoke of financial responsibility is always on his shoulders. If a problem arises, if money gets short, or if some necessity can’t be afforded, then this partner feels he has to solve the problem alone. He doesn’t normally look to his spouse as someone who can help. He often sees his mate as inept when it comes to managing money, so he bears the burden all by himself.

The financially-oriented partner can also get hooked into a parent-child relationship with his spouse. The person who pays the bills all the time knows what the family can and cannot afford. The other partner doesn’t understand the financial situation and so continues to ask for things. Can we go on this vacation? Can we buy this new couch? Can we go out to dinner? The financially-oriented spouse is frequently cast in the role of having to say no. He can end up feeling like the “bad guy,” the parent. The other person may feel like a child being deprived.

Most often, these roles are not discussed openly. The respective partners just fall into their roles and life goes on. This may or may not work, given the particular relationship. However, the lack of open communication can have serious consequences for the financially-passive partner if she suddenly finds herself alone—as in the case of death or divorce. She is left with all the financial responsibilities, and not a clue as to how to handle them. This partner may not know what insurance policies are in effect, or how to provide direction to an investment advisor, or what bills need to be paid. It is difficult enough to deal with the loss of a loved one. The last thing a widowed or divorced person needs is to have to figure out all the finances, too.

One solution is to have an outside person ready to step in and help the financially naive partner. Some of my clients have arranged for me to step in and assist if such a situation occurs. Cheryl and Tim are one such couple. Tim knows everything about the finances and has kept all the records over the years. Financial decision making does not come naturally to Cheryl, and she knows nothing about their money situation. Tim provides all the family income, while Cheryl is the homemaker and has raised the children. The couple is in their fifties, and Tim has already had one heart attack. They have agreed that if he dies, they want me to step in and assist Cheryl in understanding what to do— and to set up financial structures she can operate within.

Even if you can’t see yourself in this position anytime soon, it is advisable to prepare ahead. Set up a third party to step in and help in case the less financially skilled partner finds himself or herself alone and in need of help.

Myth #11: It’s My Spouse’s Fault! (part 3)

The second step is to recognize what type of money person your partner is, so you’ll know who you are dealing with. If you are an Avoider and your partner is a Saver, you probably will have noticed a savings account that is getting bigger and bigger and bigger. So you say, “Honey, what is your problem? We have plenty of savings! Why do we need so much?” And she says, “I don’t care. We need more.” Your next thought may be something like, “This conversation is hopeless. Her response will always be the same.”

But if you recognize and legitimize her needs, then the situation will be far more manageable, and your relationship just might improve accordingly.

The Saver needs to recognize that the Avoider is never going to eagerly sit down and balance the checkbook. The Avoider is never going to take a look at how much is being spent here versus there without prompting. He is not going to be very reliable in terms of paying the monthly bills. The Saver should recognize the Avoider’s value in doing other things in their relationship, and discard the expectation that he will ever be a whiz in financial management. Recognition and acceptance of each other will remove entire layers of conflict over money.

Some combinations are more troublesome than others. Take, for instance, an Avoider and a Worrier. The Avoider is going to avoid and the Worrier will worry about everything no matter what, and probably nothing productive will get done. This is a couple that needs help. They need a bookkeeper or an accountant or a financial planner to help handle their money affairs. Two Avoiders may also need the help of someone—otherwise big trouble may lie ahead.

I was talking recently to an executive from the East Coast, an Avoider. She said, “I never balance my checkbook and never will. At the office people give me balance sheets and I say, ‘What the heck are these? What is this stuff? What’s the bottom line?’ I tell my accountant to pay my bills. He tells me I don’t have enough money to pay the bills. I tell him to find it!”

“What would you do with somebody like me?” She asked.

“I would tell you to do exactly what you are doing,” I responded. “Let someone else handle it.”

She said, “You mean I never have to balance my checkbook?”

“Never,” I said, “Don’t even touch it.”

“Oh, I like you!” she says.

So don’t try and change yourself either. If you are a Spender, you will remain a Spender. You can, however, get more conscious about it and set up a structure that will give you some measure of control over your spending.

Ray and Jene were a couple who came to me for a financial consultation. He was an attorney and she was a dental hygienist. They made plenty of money as a couple, but they were always fighting over who spent what. He made most of the money and claimed she spent most of it.

After talking to them, it became apparent that Ray and Jene both were Spenders. They both spent money on whatever they wanted.

As a team, these two people were spending more money than they were making. When they recognized their habits and developed a structure together, they agreed to try to stick to it. Within a few months, they had stopped spending more than their income.

It’s not the other person’s fault. The other person is who they are. You might wish for your partner to change over time, to see things your way. But I wouldn’t plan on it.

Recognize how both you and your partner relate to money automatically. Then figure out what kind of structure you might create to support your needs and your partner’s needs at the same time. If she needs to spend every month to feel right in the world, agree on an amount. If you are an Avoider, agree to talk once a month about money. If you are both Worriers, go see a financial advisor and have them help you set up a long-term financial plan.

No matter what type of “money person” you are, you can find a structure that works for both of you and your partner. And when you set up such a structure, blaming your significant other for your financial problems will become a distant memory.

Myth #11: It’s My Spouse’s Fault! (part 2)

I know a couple who was in constant conflict over money. He was a manager in a large shipping company and earned a good salary, but it was never enough for his wife. She had savings accounts and investment accounts, as well as college accounts, set up for each of their four kids. They owed little debt and their mortgage was nearly paid off.

The husband felt like he was in chains—never able to freely spend money. When he wanted to buy something, a great commotion always ensued. She told him it should go into savings. When he did spend money, he did so fearing his wife’s inevitable reaction.

When they came to see me, she immediately began blaming him for being a compulsive Spender. She did not trust him to oversee the money, because she was convinced it would be squandered away. He blamed her for being obsessive about saving. She was too tight with their money and made their lives miserable; he could never have any fun and felt like he was in jail.

“Wait a minute,” I said. “Cheryl, you need to save, that’s a fact. Nothing is going to change that. Every month, you need to see your savings increase. Norm, you need to have money every month that is your own to spend. An amount that is agreed upon and is guaranteed—and you are accountable to no one about it.”

I asked them if such a structure were set up to give both of them what they needed, would they give it a try?

They agreed—and it worked. They laugh about it now. Rather than existing in a constant state of irritation or resentment, or avoiding each other for fear of confrontation, he is now learning to say, “Oh, that’s what she needs in order to feel safe. She has to save.” And she realizes, “That’s what he needs to do in order to feel a sense of autonomy and enjoyment. He needs to spend.”

They now operate under an agreed-upon plan that specifies how much savings will be set aside each month and how much he gets to spend on his own. He gets his own bank account for this use. In fact, the amount he gets to spend each month increases as certain savings thresholds are met.

If you are in a relationship and the financial situation is frustrating, it’s not the other person’s fault. It’s not the Spenders’ fault that they need to spend. You have your way of looking at money, and they have their way. What couples need is an agreed-upon plan and structure to accommodate both partners’ automatic behaviors, their own idiosyncrasies. And you need to accept the fact that you cannot change each other.

One time, a man asked me, “How do I make my wife responsible? She spends too much. I am worried about it. How can I get her to see what it does to our finances?”

I told him he couldn’t make her do anything. I told him to quit trying to change her because it wasn’t going to work.

He came back vehemently. He was livid. “She has to change! She has to grow up. How can you call yourself an expert in financial planning and condone such irresponsibility? She must change.” I run into this all the time. Marital problems occur around money when we try to change the other person instead of setting up a structure that will meet the needs of both partners. This man’s wife is obviously a Spender and she needs a structure to allow her to spend while not putting them in the poorhouse. But this fact is not what he wanted to hear.

The first step is to determine and recognize what type of money person you are.

Myth #11: It’s My Spouse’s Fault!

Most of us interact with money automatically. We have a certain style, defined by our “type,” that colors the way we relate to money. I’ve found that there are four types:

THE SAVER: No matter what, Savers have to save money, and they can never save enough. They might agree to save a certain amount, but once they accomplish their goal, they will constantly raise the bar saying, “But I really need to save more.” They have to be saving all the time, no matter how much they have already saved.

THE SPENDER: Spenders need to spend in order to keep from feeling too confined. If they aren’t spending, they aren’t happy. The amount doesn’t have to be a lot. It can be $5 here and $10 there. They need to have the security of taking money out of their purse or their wallet whenever they want and buying something. They never go too long without telling you of their need to buy something new—whether for the house, the children, or some hobby. And to them, it’s completely justified; they just can’t get along without it.

THE WORRIER: No matter what, these people are always worried that there isn’t enough money. If they have enough, they’re afraid it will go away. They are anxious that a disaster is going to happen. They’re concerned that they or their spouse will lose their jobs. They wake up in the middle of the night worried about money.

THE AVOIDER: The last thing these people want to do is to deal with or talk about money. They would rather clean out the freezer than balance their checkbook. They pay their bills late. They wait until the midnight deadline to mail their taxes, or they file an extension. They might be in trouble with collection agencies, even though they have money in their checking account. They will go to great lengths to avoid dealing with it.

When it comes to money, our type—the automatic behaviors we are prone to do without thinking—runs the show. A Saver doesn’t wake up and say, “I’m going to save.” A Saver just saves. A Spender’s default behavior is simply to spend.

When couples begin to evaluate their money situation and express frustration at the state of things, one thing often comes to the surface. They believe that their financial problems are the fault of their spouse or partner.

“If he just wouldn’t spend so much.”

“I can’t get her to talk about money.”

“She can’t say no to the kids. We’re always buying new things for them.”

“Everything we make he puts into savings and always tells me we don’t have enough.”

“He spends all this money on basketball games and his racing boats!”

“I’m worried about her losing her job. There is so much pressure on me to provide.”

The saying “opposites attract” often applies to finances: rarely do you find that those in a relationship approach money in the same way. A Saver may find herself in a relationship with an Avoider. A Worrier married to a Spender will have plenty of grist for the mill. No wonder each thinks it’s the other person’s fault when things get out of balance.