Friday, 1 February 2019
Writer Jane Austen summed up what a big deal money is in relationships when she wrote, "It is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife."
Things haven't changed that much since 1813, when Pride and Prejudice was published. Money hovers silently in the background of every human relationship — not only marriages. Even when the relationship is parent and child, coworkers or best friends, money is perpetually along for the ride.
In fact, money can become a relationship stumbling block, especially as people's situations change over the years. Let's look at how money can affect some of the major relationships in your life — and how to avoid letting financials get in the way of love, friendship and collegiality.
Money becomes a conflict point between parents and kids before the kids even know what money is. Just picture the last time you saw a toddler crying in a toy store because he couldn't have all the choo- choo trains. That dispute is really about money.
As kids get older, money affects the parent/child relationship in more nuanced ways. Some parents try to avoid conflict over money by avoiding the topic with their kids. Affluent parents might be tempted to avoid letting the children know how much they have, for fear they will grow up feeling they don't need to work hard. On the other end of the spectrum, parents who are struggling to pay the bills may hide their financial reality from their kids, hoping to spare them some worry.
In both cases, honesty is the best way to keep small issues from snowballing. John Christianson, founder of the wealth advisory firm Highland, advised in the Harvard Business Review that wealthy parents should be transparent with the next generation so that the kids can grow up prepared to take on stewardship of the family fortune.
If you're struggling, chances are the kids have already sensed this. Research shows that even young children learn from their parents' financial behaviors. Explaining what's going on — with an age-appropriate level of detail — can calm fears. And if kids don't know that money is tight, they won't understand why privileges such as an expensive sports team or extra holiday gifts get cut, and they might think the parents are just being stingy.
Have you ever accidentally seen a coworker's paycheck and found out you're getting paid less than they are for a similar role? It's not a great feeling to say the least. And while your coworker certainly didn't negotiate a better pay rate to hurt you, it can lead to feelings of resentment amongst colleagues.
Traditionally, employers discourage employees from disclosing their pay to coworkers. But there is a movement among some companies toward transparency, either making pay scale public or sharing compensation formulas with the whole staff. Business professor David Burkus studied companies trying this approach in his book, Under New Management, and found that transparency led to improved collaboration and other benefits.
Even if your company isn't one of the transparent ones, it's ok to share pay information among coworkers as long as you approach the topic with mutual benefit in mind. For example, tipping off a coworker who's about to get promoted to your level what pay he could expect is helpful. Fishing for details about a coworker's raise and then whispering about it behind her back isn't.
When you first make friends with someone, chances are your financial situations are similar. But what happens when situations change as the years go on, and one friend becomes wealthier while the others circumstances become constrained?
In this scenario, money is worse than a third wheel. It can put you in all kinds of awkward situations. It can be hard to find an appropriate place to get together if one friend loves Michelin-starred restaurants and the other can only afford fast food. How is a cash-strapped friend supposed to reciprocate if the wealthier friend gives her what feels like an extravagant holiday gift? Or what if friends who make less money automatically assume that the one who earns more will always pick up the check?
In order to keep such friendships alive, experts advise that you learn how to take on awkward situations straightforwardly, but with tact. Be prepared with a non-snarky answer for when a lower-earning friend wonders at how you can afford that new car. Or if a higher-earning friend invites you on an expensive get-away, simply explain that it's not in your budget this year, and suggest a more affordable way to catch up.
How big a deal is money in a marriage? Studies typically find financial problems or disagreements over money are one of the top reasons that couples split. One study published in the journal Couple and Family Psychology found that financial problems are a factor in more than a third of divorces. And a national survey found this sobering fact: Couples who argue about money more than about other topics are more likely to break up.
How to keep the silent partner in the relationship — money — from ruining the whole thing? Get started on the right foot by discussing money openly before you get married, deciding how you will handle joint expenses and determining how much financial independence each of you will have. As the years go on, keep talking — and, more importantly, listening. You'll gradually get to know your partner's financial personality and figure out how to stay on the same page.
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