Marriage and Your Inner Money Manager With Matt Bell

This faith and finance podcast is underwritten in part by Soundmind Investing. For more than 30 years, do it yourself investors have relied on SMI for proven strategies and trustworthy guidance. SMI helps people build wealth so they can provide for their families, prepare for the future and give generously. Learn more at soundmindinvesting.org. Each of us has an inner money manager.

So what happens if yours and your spouse's disagree? Hi, I'm Rob West. Couples who can reconcile differences about handling their finances avoid a lot of conflicts in marriage. Today, Matt Bell tells us how to do that by getting in touch with our inner money manager. And then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Well, it's always a treat to have Matt Bell on the program. Matt's the managing editor at Soundmind Investing and the author of several books on personal finance, including Money and Marriage, a complete guide for engaged and newly married couples. Matt, great to have you back with us.

Great to be with you, Rob. So Matt, you have an article at soundmindinvesting.org titled Marriage and Your Inner Money Manager. Is it safe to say that we don't all have the same inner money manager?

Yeah, that's absolutely right, Rob. Because if you think about it, we all come at marriage from a unique set of experiences and ways of thinking about money. You know, we've been influenced by our parents, the culture we grew up in. And so really, I think one of the most significant differences that we often come into marriage with is a different temperament. And temperament plays a really important role in the ways that we think about and use money. In essence, temperament is our nature.

It's how God has wired us up, which has a lot to do with how we just naturally react to certain situations. And temperament impacts all areas of our lives, but it certainly comes with inherent strengths and weaknesses when it comes to money. So that's why it can be so important for a husband and wife to understand each other's temperament. And it's really important to use those insights to learn how to manage money together as a team.

Yeah, that's exactly right. But speaking from personal experience, that's easier said than done, right? That's absolutely true. Yeah, I mean, it's interesting that the men and women tend to come at money from such different directions. There's a lot of interesting research out there, and these different perspectives on money can lead to conflict.

So here's just a sampling of some of the research I've seen. For one thing, men and women tend to have different spending priorities. When you ask men and women about their indulgences, what they like to splurge on, for example, men are more likely to choose electronic gear, whereas women are more likely to say travel. Men and women come at money from different emotional perspectives.

And this one, I think, is especially interesting. When asked what terms they associate with when it comes to money, men are more likely to say things like confidence. Women are more likely to choose terms like anxiety and even confusion.

Yeah, that's interesting, isn't it? Men and women are interested in different financial topics. Men tend to be more into investing and entrepreneurship, whereas women tend to gravitate toward articles about how to save on this or that. Men tend to be more likely to ask for more money. They tend to negotiate when applying for a job more so than women. And men tend to be more comfortable taking on higher levels of risk with investing, which often doesn't end well. Research shows that men tend to make more investment mistakes than women do. So there's just a lot of really interesting kind of natural ways that men and women tend to differ in their perspectives on money. Yeah, that's so fascinating.

And it really explains a lot of the conflict that arises in marriage. Now, making it even more challenging, though, I've heard that financial opposites attract. Is that actually right, based on the research?

That is right, Rob. There's some interesting research out of Northwestern University and the University of Pennsylvania. And the research they did found that in moments of clear rational thinking, when we're just kind of thinking about what would suit us best in a mate, we tend to think of the type of person who is similar to us in how we think about and use money that seems logical to us. However, when the real world happens and someone we're actually attracted to walks by, we tend to choose a mate that's very different than us when it comes to money. For example, spend thrifts tend to marry tightwads and vice versa. And that can lead to a lot of conflict in marriage.

Interesting. What about our own financial situation? How do men and women differ there?

Yeah, it really varies quite a bit in terms of our men savers and women spenders. And those two opposites do tend to attract to each other. So, you know, it's not like one person is right and one person is absolutely wrong. But it's difficult sometimes to kind of naturally come together.

It takes some time and some work. Fascinating. What about how men and women differ in how they look at their own financial situation?

This one is really interesting, I think. So women tend to believe their situation is worse than it actually is, sometimes overstating how much debt they have. And men, they're just the opposite. They tend to believe their situation is better than it often is, sometimes overstating how much they earn.

Yeah, so interesting. All right, Matt Bell is here today. We're talking money and marriage. We're going to get into the solution.

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Go to faithfi.com and click the word app to get started. Great to have you with us today on faith and finance. Well, we've all heard the statistics conflict around money in marriage is off the charts. So what do we do about it? Well, with us today is our friend Matt Bell. He's managing editor at sound mind investing. You can learn more at soundmindinvesting.org.

And while you're there, check out the article we're talking about today that Matt wrote. It's called marriage and your inner money manager. Now, before the break, Matt, you were telling us about all the ways that were different based on the research and that so often opposites attract. So it's not unexpected that we would have conflict in this area of money in marriage, but I'm ready to talk about what we can do about it.

So how can we reconcile these differences? Yeah, well, something that can help a lot is learning more about how God has wired you up and how God has wired up your spouse. So this gets back to temperament, which we touched on briefly earlier. So knowing your temperament and that of your spouse will go a long way toward helping you understand why both of you do what you do with money and pretty much everything else for that matter. But it can help you work together as a team. I think temperament is just a fascinating thing to discover about yourself and about your spouse.

You never quite finish the discovery, but it's just a fascinating set of insights that comes with this effort. So even the simple insight that a person's temperament typically doesn't change, that can be helpful because if you're having some recurring disagreement, maybe it's because you're trying to change something about each other that just really won't ever change. And that isn't horrible news, and it's not like an excuse to say, Oh, well, my temperament is what it is. And so I can just keep on doing this behavior that irritates you.

That's not a great idea. The better perspective is to discover your temperament with the perspective that you can learn how to manage it and how to maximize the strengths, money management wise, that tend to come with each temperament and learn to manage around the weaknesses. Because if we don't do that, Matt, and lean into it, then we end up living separate, even secretive financial lives, right? Yeah, that's absolutely true.

I mean, back to some of the research on this topic. It's pretty eye opening when men and women are asked questions that rarely depict the state of their relationship when it comes to money. So, for example, 20% of married people agree with this statement. I don't discuss how much I make with anyone, including my spouse. That's kind of surprising, isn't it, that somebody wouldn't even know how much their own spouse earns? Nearly two thirds of married people have no idea when their spouse plans to retire. Can you imagine you're seeing your spouse go out the door in the morning with the golf clubs and that's your first hint that they may have retired? Something like 44% of married people say it's okay to keep financial secrets. The typical most common type of secret is debt of some kind, credit card debt and such. Roughly 40% of men and women confess to lying to their spouse about how much they spent on something.

And this one is kind of interesting. While women have a fairly good feel for what financial issues are important to their husbands, husbands, not so much. So, for example, Rob, a relatively small percentage of us men apparently believe that having the right investments is something that's important to our wives. Whereas nearly half of women say that's important to them. And less than half of men think that having money set aside for emergencies is something that their spouse cares about. Whereas, not surprisingly, more than 70% of women say that is, in fact, something that's important to them.

Yeah, that's fascinating, Matt. Alright, so if couples then disagree on their finances, how do they reconcile those differences? Yeah, a lot of it comes down to communication. Communication is just a key to so many important good things in marriage. But it comes down to if you understand each other's temperament, then that starts to provide kind of a roadmap for how to get the most from each other's kind of natural wiring around money management and work around those weaknesses, like I said. So, for example, there's different classification systems out there when it comes to temperament, and they all trace back to Hippocrates, the father of modern medicine, all the way back in 370 BC, he identified four temperaments, the choleric, the sanguine, the phlegmatic, and the melancholy.

And so if we want to start unpacking some of these, you can start to see how helpful it is to understand, again, both how God has wired you up and how God has wired up your spouse. So if we just choose one of those, say the choleric, if you want to start there. So the choleric is the hard charging kind of bottom line type A sort of person. The financial implications is that these folks tend to be really good at crashing through obstacles.

So you want to set a goal of saving up enough money for a certain purchase. They're the person to kind of set that vision and pursue that goal with a lot of vigor. But the problem that the downside, they all come with pros and cons, the downside to the choleric is that they can have a tendency to sort of run ahead of their spouse, sometimes even making decisions about investments or even spending sometimes without the input of their spouse, which is not exactly a great idea. Yeah, folks are already starting to identify themselves as you're talking here, Matt. Let's move on to the sanguine temperament.

What do we need to know there? Yeah, the sanguine is the outgoing, colorful, winsome kind of life of the party sort of person. So when it comes to career choice, very naturally, they tend to gravitate toward people centered jobs. So they tend to gravitate perhaps to sales jobs. However, the other financial implication for them is that they don't tend to love the details. I mean, I heard somebody say one time that he never met a sanguine accountant, and that's probably true. So that combination of a people person sort of job in sales where there might be a variable income that tends to not pair up very well with a lack of interest in budgeting. It can leave their finances kind of messy. So if you're married to a sanguine, the advice is don't try to turn your spouse into the keeper of the budget.

That's probably not going to end well. Just get them to drop their receipts in the vicinity of the budget, and then you be the one to enter the data. Yeah, I love how you're building a bridge from the temperament to how we actually then respond to that and assign different roles and appreciate each other's differences.

Let's go to the phlegmatic. Sure. So this is the person that tends to be kind of a steady, very reliable, dependable, predictable, really good, steady work ethic. They can be counted on to show up and methodically get the job done. However, they can kind of lack motivation to go the extra mile and that might have them kind of underperforming in terms of their work potential, their career potential. They can also be frugal to the point of them being cheap. So if you kind of hesitated the idea of leaving any more than a 15% tip at a restaurant, you may be phlegmatic.

That's helpful to know. All right, there's one more. It's melancholy.

Tell us about that one. Yeah, so this is not necessarily a sad person unless you think of budgeting as a sad activity because melancholy tend to be the type that take most easily to the use of a budget. A melancholy is disciplined, a planner. They tend to have lofty ideals. Now, while their detail orientation can make them really good at keeping records, they can sometimes be a little too detail-oriented, striving for the perfect budget and getting frustrated if it's off to even a penny. They can also be a bit unrealistic, sometimes setting goals that are really beyond the reach of most mortals. Yeah, that's helpful.

All right, bring this home for us, Matt. After a couple identifies their individual temperaments, and by the way, there are a lot of resources to help you go deeper on this, how does that then help them? Yeah, again, I think it's a fascinating area of discovery. I mean, let's all be students of our spouse and of ourselves of how God has wired us up for our whole lives.

I think it's just a fascinating journey of exploration. And when each spouse begins to really understand their own temperament and that of their spouse, it can foster empathy and grace. We can stop kind of blaming them for certain things and start to understand more of where they're coming from. It can help a lot in stopping to be so frequently frustrated by each other's financial tendencies and again, to kind of gain an understanding of where they're coming from and why they're tending to react to certain situations as they are. And that can open up the possibility of learning how to maximize each other's natural money management strengths while navigating around their natural weaknesses.

In essence, it's just a great way for couples to learn to manage money as a team. Wow, this is a game changer, Matt. So thankful for your time today, my friend.

Thanks for stopping by. My pleasure, Rob. That's Matt Bell with Soundmind Investing.

Read this article at soundmindinvesting.org. All right, your calls are next. The number, 800-525-7000. That's 800-525-7000. I'm Rob West and this is Faith and Finance.

We'll be right back. We are grateful for support from Soundmind Investing in the Faith and Finance program. For more than 30 years, they've been helping Christians reach their financial goals with step by step guidance for investors at every stage, from those just getting started to those getting ready for retirement. Through scriptural principles and practical suggestions, SMI offers financial wisdom for living well. More information, including the short video webinar on profit and peace of mind, no matter what's happening in the market, is available at soundmindinvesting.org. As the leading advocate for the Christian financial industry, Kingdom Advisors serves the public by promoting the integration of a biblical worldview across every aspect of the financial services industry. And we serve a growing network of thousands of Christian financial professionals, equipping and empowering them to carry biblical financial wisdom to their clients, peers and community. For more information, visit kingdomadvisors.com. That's kingdomadvisors.com. Welcome back to Faith and Finance.

I'm Rob West. You know, something big happened at the end of the year. Mint, the popular budgeting app and software, shut down. A lot of folks, millions actually, were relying on Mint and Intuit.

The owner decided to go a different direction. And well, if you're looking for a replacement for your spending plan, your tracking, and you want to be a part of the larger FaithFi community, sharing wisdom around your finances, encouraging each other and growing and learning together, the FaithFi app could be a perfect replacement. Just head to your app store and search for FaithFi or go to our website, faithfi.com and click app. We'd love for you to check it out today. All right, we're going to go back to the phones here in our final segment. Let's get to as many questions as we can.

To Chicago. Hi, Jane, go ahead. Hi, Rob. This is Jane, of course. I was calling because I paid into the deferred comp 457 plan and I've been hearing a lot about this digital currency and I'm concerned that it will replace the dollar. I've been retired since 2016, but I haven't made any withdrawals from my current plan. And I was wondering how can I protect my money?

Yeah, I appreciate that, Jane. You know, there's a lot of talk about the digital currency. I think there's a lot of reason to be concerned if that were to ever come to pass just because of the loss of privacy that it would entail and the potential for even social controls like we see in other few other countries.

Here's the thing, though, it's a long way off. It's going to have to go through Congress, and they can't seem to agree on anything. If it does happen someday, you know, based on what we're seeing and reading, it would not replace our currency, it would only supplement it. So it would offer a digital option. And the idea would be that it would be to keep us competitive here in the United States because of the dollar, a digital dollar would be very attractive around the world. But that the actual legal tender of the physical currency would not go away. But again, there's a lot of reason why I think a lot of lawmakers and including some of the states that have gotten ahead of this, like Florida has said that the central bank digital currency would not conform with their uniform commercial code.

So they're trying to kind of make a statement out in front of this thing. But bottom line is it's a long way off. I think you were smart to put that money into your 457. You got the tax deferred growth along the way.

So I wouldn't do anything different than you're doing right now. In terms of protecting your money, I'd probably, if you've separated from employment, I'd look at rolling that out to an IRA, and leave it invested. That's going to be the very best way for you to offset the effects of inflation and grow this appropriately for your age and risk tolerance. So you're going to want to get more conservative over time. And I'd recommend if you haven't to this point, and I can see why you wouldn't have with a 457, it's kind of hands off. Once you roll it to an IRA, you probably want to interview and ultimately hire a financial advisor to manage this for you.

But I wouldn't make any changes in light of a possible digital currency down the road. Thank you so much. I'll call back at another time, Rob, if I have any questions. Thank you so very much. God bless you. Please do, Jane.

Thank you and Lord bless you as well. To Noblesville, Indiana. Hi, Charles.

How can I help? Thank you, Rob, for taking my call. I have a grandson that I want to get a car for when he gets 18.

And I was wondering, should I put the funds now in a CD or a USI bond? Yeah, that's a good question, Charles. You're a generous grandfather.

I love what you're thinking here. How old is your grandson today? 15. Okay, so we're only talking three years, huh? Three of three years.

Okay. Yeah, I think a CD is your best option. You know, that I bond rate, given that the Federal Reserve is so laser focused on bringing inflation down, that I bond rate is going to continue to fall. Whereas CDs are fairly attractive right now, especially on a three year CD. So as long as you don't think there's a need to have access to the money in less than three years, I'd probably head to bankrate.com and look for who has the best three year CD rates right now and lock that in, get as much as you can on that money for the next 36 months, and then you'll be ready to go.

It's guaranteed as long as you have an FDIC insured bank or credit union, and you'll have the money to be able to gift to your grandson at that point. Thank you, Rob. You know, you've really been a blessing.

Well, thank you. That's very kind, Charles. We appreciate you calling today.

Let's go to Cleveland. Hi, Kathy. How can I help you?

Hi, thanks for taking my call. Back in 2015 when my dad passed away, my mother moved in with me, and that was kind of always the plan in the back of our heads. So she's been with me all that time now, and I'm our primary caregiver as she's aging and her health is really taking a turn. And one thing that we did when she moved in at some point was put my name on her checking and savings account. And then as she lived with me, occasionally we'd buy a CD, you know, or do an I-bond, something like that. But we've never really touched that fund. And it's the money that she got from selling her condo when she moved in with me.

So it's just continued to grow, and we've primarily lived off my income, which we were able to do. And her thought was, you're taking care of me. Once I'm gone, it's yours. But I just wanted to make sure there's no legal issues with that. Yeah. Does she have a will, Kathy? No. She's thinking in her mind, since I put your name on my account, I don't need one.

Yeah. The problem is that you're joint owners, so you're co-owners of this money, which means that you'd be entitled to 50% of it when she passes away. The other 50% would be a part of her estate. And without a will, she would die intestate, which means that the court would decide who gets it. Now, they're going to favor family members. And if you're the only child, is that the case?

No, it's not. She's already given money to my brother, so she made a gift of money to him twice over the past years. In her mind, she thinks she's good. Yeah, but the challenge is it's not going to be up to her, because she'd be gone at that point, and the court would be the one determining who receives that money. And they're going to divide it equally in all likelihoods. So what I would do is she could either gift the whole amount to you, and then if it's over $18,000, which obviously it is, because you have the proceeds of a home sale in here, then she'd have to file a gift tax return with the IRS. There's no taxes due, but she'd have to report it, because it would take away from her lifetime gift exemption of $13 million, which is probably not quite that much, or she could go and get a will.

But apart from that, the portion that she owns, which if you're joint owners, she owns 50% of these accounts, that would be up to the court to decide how it's distributed. Okay, gotcha. All right, that makes sense. Thank you very much. Okay, Kathy, thanks for your call today. We appreciate it. I hope you'll make plans to join us again next time for another edition of Faith & Finance. Faith & Finance is provided by Faithfi and listeners like you. Thank you.