To Have and Withhold

The economic crisis has forced women to confront their “wifestyles” (hiding the cost of the Louboutins from him isn’t easy anymore) and take charge of their financial destinies. Perhaps that’s a good thing.

By Jill Brooke

It’s not only the indiscreet message left on a Blackberry that can be evidence of bad behavior. The credit card bill is, too. Which is why, on a recent day at the sleek Mt. Kisco offices of dermatologist Dr. David Bank, a well-dressed woman with Botox pin pricks reached into her bag and whipped out a fistful of cash instead of her trusty Amex card.

“This way my husband doesn’t know what I spent,” she whispered conspiratorially. In fact, as Bank revealed, many women have admitted to hoarding cash in order to pay for their beauty treatments. After all, they reason, hair and skin maintenance should be considered a necessity, not a luxury.

“Men may cheat with women but women are more likely to cheat with money,” observes Bonnie Eaker Weil, the author of Financial Infidelity (Hudson Street Press, 2008) as well as one of the nation’s experts on marital infidelity. “Our research shows that 82 percent of married partners hide purchases from their partner and 40 percent lie about what they spend.”

“Only 40 percent?” scoffs Stacy Geisinger, the creator of Westchester’s StacyKnows.com, a regional blog featuring tips on everything from sample sales to recipes for kale chips. “I think it’s much higher. I know women who will say a pair of shoes cost $200 when they really were $600.”

Over at Neiman Marcus, a saleswoman who didn’t want to be named in print says women have always been strategic about spending. “Customers would tell me that they didn’t want to spend over $900 because if it was more than three digits on the Amex bill, their husbands would then notice and ask questions,” she said.

This is especially true now. Because of the financial tsunami that has swept away salaries, excess cash, and consumer confidence, couples are paying more attention to monthly statements and expenditures. Suddenly women who weren’t used to being accountable now, as Desi once told Lucy, “have a lot of ‘splaining to do.” An emotional minefield, this is uncharted,risky territory for many marriages. According to Weil’s research, 47 percent of couples did not talk about how they spend money before marriage and of the ones that did, 51 percent called the discussions “stressful.”

Women often find it easier to fudge the finances than argue about them. That’s often because women traditionally have been the CEOs of the home while their husbands are out being the chief breadwinners. As a result, women are in charge of day-to-day expenditures and are in a better position to skim a bit. Or as Geisinger jokes, “What’s his is mine and what mine is mine.” This may be helpful in getting the occasional beauty treatment or Tory Burch tunic without a lot of awkward questions to answer, but it’s not ideal for long-term security. In this typical arrangement, the woman takes care of the household costs and the man—if there is extra income after household expenses—then determines the investments.

Since so many Westchester couples are PORC (“people of reduced circumstances”), discussions about spending are far more frequent—as well as heated—which can fray marriages. In fact, a new study by Jeffrey Dew at Utah State University calculated the risk. If you argue about money more than once a week, the study found, you are over “30 percent more likely to get a divorce than couples who disagree a few times a month.” This is hardly surprising news. We intuitively knew that money troubles breed marital strife. But if you can’t avoid talking about money (and these days, very few of us can afford not to have regular conversations on that subject), how do you do it constructively? What does partnership and financial responsibility look like in the age of pink slips and free-falling home values?

In flusher times, money could mask deep fissures in a relationship. A comfortable “wifestyle” kept many women in marriages who might otherwise be tempted to leave, and provided a Band-aid that hid emotional wounds. Now that the economy has ripped it off, many couples are forced to confront these deficiencies and contemplate either divorce or new dialogue for healing.

After interviewing financial planners, investment advisors, and divorce attorneys, we got a close-up view of some of the most common financial conflicts. First, it seems that savers typically marry spenders. As psychotherapist, “money coach,” and co-author of Overcoming Overspending: A Winning Plan for Spenders and Their Partners (Walker & Company, 1995) Olivia Mellan says, these relationships become “a balancing dance of opposites” and the longer a couple is married, the more “they lock into polarized roles.”

Furthermore, according to Mellan, one partner is usually “the avoider”—the person who doesn’t focus on details of financial life, including everything from credit card interest rates to retirement returns. To them, the word “budget” is so painful that financial planners now use the words “spending plan” when advising them. Then there are the savers, also known as “worriers,” who come with their own challenges. For example, right now would be an excellent time to invest in real estate, antiques, or art because of their greatly reduced prices. But some worriers can be so paralyzed by fear that they don’t see opportunities and then clash with their partner on spending.

As far as how money is allocated, experts say that most couples fall into two typical patterns:

The All-for-One/One-for-All Approach
Young newlyweds, who didn’t have portfolios or major inheritances to protect when they wed, are more likely to have one joint account. Often, that one account remains the source of all their spending for the life of their marriage. Susan and Jim Duffy of Bedford, for example, have been together since college and married when they were both 24 years old. “Back then, I was making only $14,000 a year, so we never thought of doing anything but pooling all our monies together in one account,” says Susan, a former Chanel executive. “We’ve always been life partners. But maybe if I had gotten married later, I might have had a different arrangement.”

The Yours, Mine, and Ours Arrangement
Charla Krupp, the style expert and author of How Not to Look Old married Time magazine writer Richard Zoglin when she was over age 35 and well established in her life and career. Krupp, a New Yorker, loves her husband, but she also loves her Prada, her Jimmy Choo, and her independence. “I’m a shopaholic but my husband will only buy things if he needs to replace something,” she said. “I knew when we were getting married that this was going to be a problem.” To avoid battles that could torpedo an otherwise happy union, Krupp and Zoglin created three different bank accounts: “his,” “hers,” and “ours,” with the shared account used for household expenses and vacations. “I’ve never had to answer to anyone,” Krupp declares. “Why should I now just because I’m married? Plus, my spending would upset him. I don’t want to give him a heart attack.”

The “yours, mine, and ours” approach is especially useful for second marriages. As one second husband shared with me, “I would resent having to pay for my stepkids’ expenses so we keep household’s and children’s expenses separate.” As someone who specializes in helping people navigate their divorces, I encourage people to discuss financial expectations because fights in second marriages are often rooted in conflicts that pit the interests of the kids against the relationship between the adults.

Divorce lays bare the challenges that women face when they don’t keep at least some of their assets separate from the marital pot or simply turn over all financial matters to their husband’s control. Consider these facts reported by www.msmoney.com.
• Women live longer than men (an average of seven years), so they need 20 percent more for retirement.
• On average, women earn 25 percent less than men.
• Since women tend to take time off to raise children or take care of parents (women take off approximately 11 years more from work than men), they save less than men do for retirement.
• After earning lower salaries for fewer years, women’s social security benefits are about half of men’s.
• The majority of women have certificates of deposit (CDs) in their retirement savings accounts when a more aggressive investment vehicle would be more appropriate.

Furthermore, lifetime support via alimony is no longer the norm after the dissolution of a marriage. While the amount of child support is fixed by the court system at approximately 17 percent of gross salary for one child, 25 percent for two kids, and 29 percent for three kids, alimony (aka “maintenance”) is the wild. “You’ll get one year of maintenance for every two years of marriage,” says Marguerite Royer, a divorce lawyer from the firm of Moses & Singer in White Plains. “But most women are terrible at assessing what their annual budgets really are and don’t budget for costs ranging from insurance to kids’ sneakers or movie tickets. They’ve used credit cards without really examining the flow of cash throughout the year. This leaves them at a disadvantage.”

It isn’t as though information about household finances and investments is unavailable to women. Even in the most traditional of marriages, women can only be kept in the dark about the household’s financial situation if they choose to remain so. In fact, as Clifford Solomon, a divorce attorney for Solomon & Tanenbaum in White Plains points out, because of computers, “there’s now a paper trail that can be tracked.” It is therefore up to women to take the initiative and educate themselves about where the money is coming from and where it’s going. He also concurs that women need to set up and maintain independent accounts.

Joy Rose, the founder and president of Mamapalooza, the Westchester-based organization that produces festivals and community-based events for moms, says she wishes she would have been as educated about finances pre-divorce. “Stay-at-home moms should ask for a salary to protect themselves,” says the Hastings-on-Hudson resident. “Every woman needs to have their own autonomy and when you consider all the work that a mom does from cooking, cleaning, chauffeuring, organizing, and managing family life, it has immense value. They should make sure that a portion of the husband’s salary goes into a personal account since the woman has taken off the time to raise the kids.”

Rose’s suggestion is worth pondering. Why don’t women insist on a monetary value for their work? Although most arrangements allow women to use credit cards, few have separate accounts—unless they have other income or inheritance—and need them if anything happens. Of course, “anything” always happens and when it does, women typically are unprepared. According to divorce attorney Royer, most women don’t have enough in their accounts to cover more than two months of expenses.

If thinking about your finances and your lack of attention to them makes you feel guilty, less on top of things, less assertive, and perhaps less smart than a woman of the 2000s ought to be, take heart. No less an icon of female financial empowerment than Westchester’s resident money guru, Jean Chatzky of “Today” and “Oprah” fame, candidly admitted in her book, Make Money, Not Excuses (Crown Business, 2006), that she allowed her ex-husband to manage investments even though she technically “had more expertise.”

“I assured myself that because I was reporting on money all day at work, there was no need for me to actually deal with them at home,” she said. “I even had myself believe that he liked paying the bills. And I rationalized that I did other things—shopping, cooking—that were equally important to our growing family. Eventually though, it started to bother me that I had no idea where the money was going. I had no idea how much we were spending, saving, or how our investments were doing. I didn’t know the online passwords that enabled my husband to pay our bills over the Internet. I’d never met the accountant who prepared our joint tax return.”

After deciding to “grow up,” she started assessing family spending, sharing such helpful tips as putting all receipts in “your wallet,” not a tote bag, looking into savings accounts, creating one for herself, and then investing, tracking growth, and eventually finding her “money confidence,” as well as profits.

While you might be reluctant to take the reins of your family’s finances, there’s no question that you’re up to the job. According to a study by the National Association of Investment Clubs, women’s investment choices outperformed their male counterparts by a wide margin in 9 out of 12 years in which they were tracked.

Chatzky, like other financial experts, encourages women to get over their fears, take the bull by the horns, and have monthly conversations about budgets and finances. “No one plans to fail, they just fail to plan,” says Richard Sweet, a Goldens Bridge resident whose company, Wealth Advisory Group, is based in Greenwich, CT. “I help clients set goals, and by automatically funding them each month, goals can be achieved. Knowledge is power and many women don’t ask the right questions.”

One question that needs to be addressed these days is how to spend the money that is available. A study cited in Weil’s Financial Infidelity showed that 57 percent of people with more money in a relationship used that advantage for power. Should an unexpected bonus or other found money be put toward a new couch or a vacation, a computer or paving the driveway? Who wins? Since this economy has forced everyone to press the reset button, maybe now is the time to insist that equity and equality flourish in our familial relationships. Women, as well as men, need to compromise to achieve success and strive to be informed of all aspects of their family life. Ask the questions about insurance, debt, stock portfolios, and mortgage payments.

Relationships do more than blend the destinies of two hearts—they also blend your fortunes for better, or for worse. Or to quote George Bernard Shaw, “You can be as romantic as you please about love … but you mustn’t be romantic about money.”