Money, Emotion and the Monetary Blueprint

Habits and beliefs begin forming in childhood and evolve as one progresses through life. Parents shape their children in so many ways and it certainly makes sense that their financial relationships and behaviors make an impression. Perhaps a client's parents fought about money or used it as a way to control others. Or, they may have been extremely generous to the point of financial irresponsibility. In some households, one parent may have paid the bills and the other managed the investments, or one of them handled all of this alone. Maybe there was open communication about money; maybe one parent was kept completely in the dark (perhaps by choice).

As adults, we can see at least a glimmer of our parents' financial attitudes peeking through, and if one devotes a little time to self-reflection, it is clear that our parents have contributed immensely to our monetary blueprints. As an example, several years ago, as we were sorting through the financial details of one client's case and the monetary traditions of her marriage, our client burst into tears and cried, “Oh my goodness, I have turned into my mother. I swore I would never be like her.” And in some respects she was right ' though she had several advanced degrees (including an MBA) and was good with numbers (just like her Mom), her husband handled all of the finances (just like her Dad). She was uninformed and uninvolved.

Culture and religion undoubtedly play a role in the family financial dynamics of many couples. The Chinese culture promotes saving; Christianity advocates tithing; Islam views money as a means to a higher value, not a goal for personal accumulation or an end in itself. Recently, a Latino client had a sizable deficit in his spending plan. He was sending money to both parents and would not reduce or eliminate this line item on his budget. In his mind, this was non-negotiable. Curtailing the spending on himself and children was the acceptable option, based on the practices of his culture.

Often in lawsuits, and particularly in divorce, there is another emotional consideration that rarely has anything to do with money directly: the notion of justice. People want to be treated fairly. One party sees him- or herself as the victim, and strives for acknowledgement in the form of compensation for being wronged or mistreated. They seek moral righteousness and want what they view as rightfully theirs. They have no interest in compromise. On the other side of that coin is the party who feels an obligation stemming from guilt or shame due to some sort of “offense.” These people tend to be overly generous. Both asking for too much and giving away too much can have non-financial roots that even the parties might not realize.

Money has a constant presence throughout life. As we transition through various stages of it, unique personality traits, gender-related expectations and our personal journeys shape us even further. This explains why siblings can have different money attitudes, behavior and spending habits though they were raised in the same household. Even research studies with twins have had similar findings: Childhood upbringing is an important element, but over time, the further accumulated life experiences of the individual have an effect as well.

Money Profiles

It is no wonder that money often causes the most conflicts in a marriage and divorce. Two people enter into marriage with distinct backgrounds, habits and expectations. Some successfully blend and balance financial protocols while incorporating practices and beliefs from each individual; some struggle with this.

Have you ever had a client spend excessively, stockpile too much, or evade money matters altogether? According to Olivia Mellan and Sherry Christie, in their book, “Money Harmony: A Road Map for Individuals and Couples,” there are five main money profiles:

1. Amasser ' This person is likely to be overly concerned with keeping large amounts of money at his disposal to spend, save and invest; he is interested in, and gains satisfaction from, accumulating and retaining funds. Money measures achievement, self-worth and accomplishment.
2. Avoider ' This person is prone to feeling overwhelmed, anxious or incompetent in dealing with the complexities and details of his financial life. These feelings often cause him to avoid paying bills, investing, budgeting and keeping financial records; he relies on others to take care of him rather than seeking financial independence.
3. Hoarder ' This person enjoys saving and is reluctant to spend, for a variety of reasons. It is difficult for him to spend money on luxury items or immediate pleasures for himself and for his loved ones. He is concerned about future security, becoming dependent or losing personal freedom, and he fears that the money will run out.
4. Money Monk ' This person is motivated to give, even at the risk of his own personal financial security. He believes that accumulation of money can corrupt a person's values; money should therefore be spent on social justice and can be used to promote meaningful causes and convictions. This selfless generosity can create dependent relationships with others, and disempowerment.
5. Spender ' This person spends to bring immediate pleasure, love and/or acceptance; this tendency can extend to the indulgence of others, as well. This type of person is motivated by the desire to be admired and to be valued in the world. He sees money as a way to achieve status, image and recognition regardless of whether he can afford to spend. This person finds saving, as well as prioritizing spending goals, difficult, and values status over financial security. Money helps him feel loved, accepted and approved of.

Listen Closely

Once the money profile is recognized, it is the interconnection and complexity of relationships, emotions and beliefs associated with money that next need to be understood. In reality, money is a symbol of relationships, and the way a person deals with money is very often the same way that that he or she deals with relationships. As members of the divorce “team,” we should have sharp listening skills, to hear what clients are “really” saying in order to better guide them and help them feel safe, understood, and perhaps even empowered.

Most people do not see money as an issue in and of itself; it is so interwoven with other issues. So pay attention and listen for clues:

• If someone thinks others are going to cheat him financially, he will be afraid of being abused or manipulated.
• The stingy clients are often fearful about love/intimacy.
• How about a client worried about running out of money? Chances are, she is afraid of being left alone or abandoned.
• When clients are feeling broken or wounded inside, you may hear them say that they are “broke.”
• Some clients feel they will never be able to buy things they want; they are probably feeling deprived, often of love more than things.
• If a client needs to be rescued financially, realize that he may be feeling needy, alone and unloved.

Conclusion

I am not suggesting that we in the legal and financial sectors rush out to get psychology degrees. However, by becoming more aware of and better understanding money relationships and emotional states, we as professionals can provide enhanced guidance; in turn, clients may be more empowered and perhaps make healthier financial choices for their futures. If we can help our clients become more aware of why they act the way they do, they might find an improved alliance with money; their financial negotiations might become better directed; and they might ultimately head down a path leading to a more amicable and respectful separation or divorce.

Or, here is another fantasy I have: As a prerequisite to marriage or co-habitation, every couple has to take a course with exercises to get in touch with and share what money means to them. Imagine how this might transform our intimate partnerships!

Now that you have been enlightened, let's take it one step further. We are professionals, but we are only human, right? Is it possible each of our own monetary blueprints and personal biases are tainting our perceptions, judgments and actions as they relate to our clients' situations? Something to ponder …

Ivy H Menchel is a Certified Financial Planner' practitioner and a Certified Divorce Financial Analyst'. In addition to running a financial planning practice, Ms. Menchel is the President of Family Wealth Planning Partners based in New York. Currently, she is on the Board of Directors of the Association of Divorce Financial Planners.