Money. It's on every top-five list of reasons that couples argue. It may not be the root of all evil, but it's certainly at the root of many human conflicts. There's a reason for that, says Joe John Duran, founding partner of United Capital and author of The Money Code. It's because money means completely different things to different people. So when we talk--or argue--about money, we're using the same words but not necessarily speaking the same language.
"Money only does three things," he explains. "It protects you from pain, it helps you enjoy life, and it helps you take care of the ones you love." For each of us, he says, one of these uses of money is more important than the others. This dominant view of money guides all of our money-related decisions whether we're aware of it or not, from whether to accept a job offer to where to go on vacation, as well as how to invest. It can also lead to deep misunderstanding and conflicts with our loved ones if their dominant view of money is different from ours. And we can put an end to some of those conflicts, or at least address them more fruitfully, if we understand how our dominant view of money differs from those of our partners or other loved ones.
Duran has developed a test that can help you figure out what your dominant mindset is about money--and what mindset your loved ones have as well. Here's a closer look at each of these mindsets:
1. Are you a protector?
If your biggest emotion around money is fear, and you think of money as a way to shelter you from things going wrong, then your dominant mode around money is to be a protector, Duran says. For protectors, he writes, "A quest for security and peace of mind is what typically drives them. Unfortunately, regardless of the amount of success they attain, they rarely ever feel secure or satisfied."
Protectors generally live within their means, are prepared for unexpected expenses, and are careful decision makers, he explains. Sometimes too careful--they're likely to miss opportunities and be too slow to make decisions, Duran says. As investors, he adds, "by the time they feel confident about an investment it's already made the most gains. They also frequently sell off prematurely."
If you're a protector, Duran says, you can help yourself by understanding that you are likely to envision the worst possible outcome in every scenario. So it will help to have a rational way to determine if your fears are reasonable or not. "It's important that you don't delay making decisions," he says. "While planning for bad outcomes has its benefits, you must remember that every minute spent protecting is time not spent enjoying." And, he notes, success in anything always requires some risk.
If your spouse or partner is a protector, begin by acknowledging that his or her carefulness has probably served you well and kept you out of trouble over the years. If you're proposing an investment or large purchase, let your partner know that you've thought through all the things that could go wrong and explain what you can do to mitigate those risks. Most likely there are also risks in not making the investment you have in mind or spending too long to make a decision. It will probably help if you discuss those as well.
2. Are you a pleasure seeker?
"A desire to enjoy what their time and money can provide is what drives those with a happiness money mind," Duran says. "Although their primary quest is to experience satisfaction, they regularly feel that they never have enough money or time."
Pleasure seekers are good at getting the most joy out of their financial resources, he adds. They're good at making even big financial decisions quickly and they don't waste time worrying excessively over bad things that might happen in the future. On the other hand, they may give in too easily to instant gratification, and may be too casual about the risks they take. They can wind up taking on too much debt and/or living beyond their means.
If this is you, Duran says you can help yourself by keeping in mind that your pleasure-seeker perspective may make you overly optimistic about the future and your ability to pay for the things you want right now. Take the time to conduct an objective analysis before making big purchases and make sure not to act on impulse.
If your spouse or partner is a pleasure seeker, remember to acknowledge his or her ability to live life to the fullest and revel in the present moment--qualities that probably make your partner a lot of fun to be with. Remind them that it's important to plan for a secure future and that you appreciate the importance of the sacrifices they're making today toward future benefits. Make sure they understand those benefits. And make sure they know there will still be plenty of fun in your life together.
3. Are you a giver?
Givers, "are driven by a desire to take care of the people or causes they love," Duran says. "No matter the amount they have saved, their income level, or the opportunities presented to them, they find that there is always more they can give to those they care about most."
Givers are generous, attentive to other people's needs and empathetic, Duran explains. They always consider how the decisions they make will affect other people. Givers often feel that they don't have enough money or time to share with others--or for themselves either, he says. "They routinely sacrifice their own needs in order to fulfill their commitments to others and rely too much on others' perspectives when making decisions."
If this is you, it's important to remember that other people can and should take responsibility for their own needs and circumstances, Duran says. "Have a way to honestly assess your needs and then be able to clearly articulate them." It's important to recognize the personal sacrifice you make when you give so much to others, and make sure you're making financial decisions that are right for you and that your desire to please other people is not interfering with your own judgment.
If your spouse or partner is a giver, it's important to empathize with their desire to help others, but gently remind them that they must take care of themselves as well. Watch out that you don't unintentionally impose your decision or viewpoint or the giver because that may be very easy to do. Instead, make sure to find out what they're really thinking about this financial decision and what their desires are. "Unfortunately, they sometimes neglect to express their own opinions or meet their own needs," Duran says.
How to stop fighting over money.
Understanding these three money minds and which one dominates your thinking is the key to better financial decisions, Duran says. "By understanding how your money mind biases your thinking, you can prevent poor choices and make more balanced, objective decisions that result in the best possible outcomes."
And when it comes to discussing money with your partner or spouse, he says, "you can avoid the recurring battles you've had--arguments that arise when each of you relies on your own subjective perspective."