What is it About Money?

Different Perspectives = Conflict
I’m sure it isn’t news to you that money is one of the most common sources of disagreement among spouses. It causes more fights than sex or household chores, and conflict over money predicts divorce better than other topics of dispute. Couples who disagree about finances at least once a week are over 30 percent more likely to divorce than couples who disagree about finances a few times a month. Yet turning down the financial heat between men and women is not easy because we come at money from such different perspectives. Consider the following:

Men and women have different spending priorities. When asked about their indulgences, men are much more likely to say electronics (54 percent versus 23 percent of women); women are more likely to say travel (43 percent versus 33 percent of men).

Men and women view money through different emotional filters. When asked which terms best describe their feelings about money, men are more likely to choose confidence (58 percent versus 44 percent of women). Women are more likely to pick anxiety (33 percent versus 18 percent of men), apprehension (26 percent versus 15 percent of men), and confusion (14 percent versus 8 percent of men).

Men and women are interested in different financial topics. Men are more into investing (83 percent versus 70 percent of women) and entrepreneurship (54 percent versus 36 percent of women). Women prefer savings (79 percent versus 69 percent of men), frugality (67 percent versus 53 percent of men), and shopping (20 percent versus 10 percent of men).

Men tend to be more aggressive with money. When applying for a job, for example, men are four times as likely as women to ask for more money than what is offered to them initially. Men are typically more comfortable taking on higher levels of risk. According to one survey, 66 percent of husbands labeled themselves the couple’s bigger risk taker with money versus 31 percent of wives.

More women (47 percent) than men (30 percent) feel they lack knowledge about investing, and fewer women say they enjoy investing (55 percent versus 69 percent of men). Given the previous findings about investing, it’s noteworthy that men make more investment mistakes than women, and they make them more often. For example, men are more likely than women to allocate too much of their portfolio to one investment (32 percent versus 23 percent of women), buy a hot investment without doing any research (24 percent versus 13 percent of women), and trade securities too often (12 percent versus 5 percent of women). There’s even evidence that women hedge fund managers outperform their male counterparts, with one ten-year study showing average annualized returns of 9 percent for hedge funds managed by women versus 5.8 percent for those managed by men.

Men and women differ in how they depict their current financial situation.

Lastly, men and women differ in their charitable giving, with women somewhat more likely than men to donate time and money. Women tend to believe their situation to be worse than it actually is, sometimes overstating how much they have in debt. Men are just the opposite, tending to believe their situation to be better than it actually is, often overstating how much they earn.

Financial Opposites Attract
As if these general differences in perspective don’t make it difficult enough to manage money as husband and wife, researchers from Northwestern University and the Wharton School of Business at the University of Pennsylvania found that we tend to magnify the difficulty by choosing mates who are especially different than we are when it comes to spending money. The research, published in a paper titled “Fatal (Fiscal) Attraction,” examined the mate selections of tightwads and spendthrifts. Tightwads were defined as people who find spending money to be painful yet regret not spending more. Spendthrifts were defined as people who feel little pain when they spend yet regret spending so much.

The researchers found that in moments of clear, rational thinking — before someone we’re attracted to walks by — we are aware of the type of person who would be best for us: someone whose attitudes toward money are similar to ours. However, when it comes time to make a decision, we set aside rational thinking. Tightwads tend to marry spendthrifts, and vice versa. The more we dislike our own financial tendency, the more likely we are to marry our financial opposite.

At first glance, that makes sense and may even seem beneficial, or at least harmless. It can be fun to hang out with our financial opposite while dating. A guy who can’t bring himself to spend much may enjoy receiving nice gifts from a woman with a loose hold on her purse strings. However, the researchers say that from “I do” forward, life with a mate who approaches spending and saving differently than we do often leads to more financial conflict and less marital satisfaction.

By the way, despite the stereotype, it isn’t always the woman who’s the spender. In about one-third of couples, the husband freely admits he’s the one who parts with cash too easily.

But money does not have to be a source of conflict in your marriage, even if these stats strike fear in your heart because you realize you’re about to marry — or already have married — your financial opposite.

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Category:Marriage Help
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Topics: Conflict, Financial Management
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