A Useful Tool for Navigating Money Disagreements

By Andy Baxley, CFP, CIMA, Sr. Financial Planner

You’ve probably heard that money-related issues are one of the leading causes of marital strain in the United States. Perhaps you’ve even experienced some of this strain yourself. If you have, you know just how emotionally fraught these conflicts can be.

Whether we like it or not, money plays a critical role in the wellbeing and safety of the people we care about. Life becomes incredibly stressful when financial resources run thin because we worry that unacceptable sacrifices will need to be made. Can we afford to continue living in a safe neighborhood with quality schools? Will we have to delay retirement? Will we be able to keep our promise to pay for college?

With stakes as high as these, it’s no wonder that money-related conflicts are commonplace.

I have yet to work with a couple who didn’t experience at least some conflict around money. What I have noticed, however, is that some couples emerge from these conflicts with their bond and trust intact, while others argue in such a way that creates deep and lasting scars on the relationship.

What sets the two sets of couples apart?

I don’t pretend to know the full answer to this question, but I have come to believe that healthy and productive money conflicts—the type we should all be aiming for—are generally the result of both partners making a concerted effort to understand and empathize with the other’s thinking.

One of the best tools I know of for achieving this understanding comes from Brad Klontz, a pioneer in the burgeoning field of financial psychology. Brad created the Klontz Money Script Inventory (KSMI-R), which you can take for free here, to help identify the Money Scripts running through our heads, often beneath the level of consciousness, that have an outsized impact on our financial decision making.

The KSMI-R Money Scripts

The KSMI-R seeks to identify the extent to which you identify with four scripts— money avoidance, money worship, money vigilance, and money status. Before I describe each of the scripts, it’s important to note that none of them necessarily represent correct or incorrect ways of thinking about money. Each script has both productive and counterproductive elements. It’s best to think of the scripts as lenses through which we view money-related issues.

The money avoidant among us generally believe that money is evil, that rich people are greedy and undeserving, and that there is a certain virtue in living one’s life without obsessing over money. You can be sure that your money-avoidant spouse did not marry you for your income or net worth, but their disinterest in financial matters may come across as irresponsible or even reckless.

On the other side of the coin, people who exhibit money worship believe that money is essential to happiness and wellbeing. They put money on a pedestal and expect it to be a solution to many of their problems. Your money-worship spouse is likely to be a hard worker, but they may also experience discontent when the money they earn doesn’t lead to the boost in happiness they were expecting.

Your money vigilant spouse likely checks their investment accounts every day, if not multiple times a day. He or she is constantly on alert to ensure that money isn’t wasted and that a general sense of financial security is maintained at all times. Money vigilance has been shown to lead to positive financial outcomes, but this often comes at the expense of heightened anxiety.

People who identify with the money status script see a direct link between their self-worth and their net worth. They often feel the need to spend money on outward displays of wealth—the big house, the fancy car, the designer clothes— to make sure others recognize their success. Your money status-focused spouse may be fixated more on what the Joneses are up to than you’d like him to be, but chances are he’s also working hard to do what is necessary to keep up.

A Personal Example of the Money Scripts in Action

Financial planners are no strangers to money-related conflict. Not only do we help our clients work through it, we also experience plenty of it ourselves!

My wife, Yi, is one of the most money vigilant people I know. She was raised here in Chicago by her Chinese immigrant grandparents after her mom died tragically in a car accident when Yi was three. Though Yeye and Nainai (grandpa and grandma in Mandarin) worked tirelessly to provide everything she needed to thrive, they lived below the poverty line throughout her childhood. Yi’s grandfather, a marvelous violinist, taught her to play at a young age so the two of them could perform for shoppers on Michigan Ave., bringing home whatever income they could to support the family. Her grandma, meanwhile, helped care for neighborhood kids whose parents had to be away during the day.

Money vigilance was not a preference for my wife’s family. It was a survival tactic. They saved every extra penny because they knew those pennies might one day be all that stood between them and homelessness.

I am grateful for Yi’s money vigilance, and while I do share this trait with her to some extent, I am also prone to exhibit signs of money status from time to time. When I do, conflict is generally not far behind.

An example of this occurred earlier this year, when I began to build a case for us to upgrade our 2009 Mazda hatchback to something newer and bigger. I had some legitimate points, to be sure. We were expecting our first child, and why, I argued, would we forgo purchasing a larger, safer car when we could easily afford to do so?

Yi wasn’t having it. Her argument, equally legitimate, was that our Mazda only had 70,000 miles on it and thus had years of reliability ahead of it. Her money vigilance simply wouldn’t allow her to make what she saw as an unnecessary and frivolous purchase.

It took some reflecting, but I eventually realized that my reasons for wanting a new car extended far beyond safety and size. Not only did I grow up in a family where nice, new cars were the norm, I’d also recently watched as a number of friends upgraded their vehicles. I couldn’t help but wonder, what would people think if they saw me driving around in a 2009 Mazda? Would they assume we weren’t professionally successful? Would my clients wonder about my abilities as a financial planner?

I expect these concerns were only in my head, lurking beneath the surface of my consciousness most of the time. Still, if I was honest with myself, I had to admit that these worries were a factor. It took awhile for me to realize it, but I was exhibiting signs of the money status script.

Once Yi and I realized the ways in which our respective money scripts were impacting the many arguments we had about the car, it became easier to think clearly about the decision. We made an effort to understand not only the logic behind each other’s arguments, but the more complicated emotional components as well. In the end, we had a series of conversations that brought us closer together, a welcome respite from the arguments that had been driving a wedge between us.

In case you’re wondering, we did end up getting a car- a 2017 Honda CR-V. It may not turn heads, but it’s very safe and I expect it will be just right for our growing family. Even better, Yi and I both love it.

If you find yourself in a money-related conflict and want another voice in the conversation, contact your TPC Financial Advisor. We help you think through money decisions to create a plan that honors each of your scripts regarding money.

Andy Baxley cfpAndy Baxley, CFP®, CIMA®, is a Financial Planner in the Chicago office of The Planning Center, a fee-only financial planning and wealth management firm. Email him at andy@theplanningcenter.com.