Couples who frequently fight about financial matters often end up divorced. A 2009 study by Utah State University found that repeated money squabbles were likely to lead to breakups—more so than arguments on other topics.
Ken and Daria Dolan have a unique perspective on money fights. They have spent more than two decades helping people sort out financial problems on radio and television call-in shows and in columns. They also have had to overcome their own money squabbles. It turns out that having a pair of money pros under the same roof doesn’t prevent money arguments. If anything, it makes those arguments more intense because both Ken and Daria have strong, well-informed opinions on money-related matters—opinions that more than occasionally are at odds.
Four of the biggest financial arguments that the Dolans have had in their 41 years of marriage and what we all can learn from them…
Daria: Two days before Ken and I wed, I learned that Ken had a $3,000 credit card balance that he couldn’t afford to pay off. I talked my father into cosigning on a loan so that we wouldn’t begin our lives together burdened with credit card debt. A few months later—with that loan not yet repaid—bills started arriving at our home for purchases Ken had made without my knowledge. Those bills triggered the first big money fight of our marriage.
Resolution: We agreed that henceforth we would discuss any purchase greater than a few hundred dollars before making it. More than four decades later, we still hold ourselves to that rule, even though our financial resources are much greater now than they were back then.
Lesson: A married person has the right to spend some money without consulting a spouse—but marriages run more smoothly when spouses yield that right. Even if a purchase is unquestionably reasonable, consulting with one’s spouse ensures that both partners feel included and respected. Besides, that partner might know about a competing product that offers better quality…or a different retailer that offers a lower price. And discussing purchases together before making them increases the odds that couples will really think through intended purchases, which then can cut down on the household’s wasteful spending.
Ken: I’m a more aggressive investor than Daria. Usually our divergent risk tolerances work in our favor—Daria’s safe investments and my aggressive ones add up to a well-balanced portfolio.
But in the late 1990s, our different investment philosophies caused a fight. I bought shares of computer-networking company Cisco Systems and several other tech stocks at the height of the dot.com bubble. Daria hated those investments—she thought the companies lacked sufficient earnings to justify their sky-high share prices. We fought about it a lot.
Resolution: Daria eventually gave up arguing with me about those tech stocks, but she never stopped providing me with the information I needed to change my own mind about them. Every morning over coffee, she would read me my stocks’ ever-higher share prices and their low earnings—some had no earnings at all—then ask me if stocks with such astronomical price-to-earnings ratios still seemed like the most promising investments available for our portfolio. In late 1999, I finally conceded that the downside of Cisco and my other high-flying high-tech stocks outweighed their upside and sold. Cisco stock soon lost more than two-thirds of its value and has never fully recovered.
Lesson: When strong-willed spouses have argued repeatedly and emotionally about a money matter without coming any closer to a resolution, further arguments on the topic are unlikely to help—in fact, they probably will just lead to increased animosity. Instead, stop arguing and start calmly, patiently and dispassionately providing information that supports your position. Our spouses are more likely to recognize the reality of the situation when emotions are replaced by cold facts.
Daria: When Ken was in his early 40s, he was in charge of the Florida office of a successful brokerage firm. He hosted a call-in money show on a local AM radio station, too, but only to help promote the brokerage firm. Then Ken was asked to fill in for the injured host of a New York City money radio show. The fill-in assignment went so well that he was offered his own show on WOR, then America’s top-rated talk-radio station.
It was an incredibly fast climb up the radio ladder for someone who had no media background, and Ken, who had fallen in love with broadcasting, was anxious to accept. I wasn’t. The job was in New York City, and we had only recently moved to Florida—I didn’t want to relocate the family again or see Ken only on weekends. And taking the radio job meant taking a 70% pay cut from Ken’s brokerage salary—I wasn’t sure we could manage on so much less. It was the biggest strain in our 41 years of marriage.
Resolution: Ken took the job but agreed that if his media career did not quickly flourish, he would return to the brokerage sector after his contract expired. I decided to find a job, too, to supplement Ken’s lower salary—I had left the workplace years before to raise our daughter.
Lesson: We can ask a lot of our spouses, but we cannot ask them to surrender a chance to follow their dreams—assuming that those dreams have a plausible chance of coming true, which Ken’s did after he was offered a show on WOR. If that means other family members must make some adjustments, then they must do so. But that doesn’t mean that our spouses are free to pursue their dreams forever. Married people have an obligation to balance their dreams against a clear-headed understanding of the reality of a situation. If Ken’s radio career had stalled, Daria had every right to expect him to return to a more promising career path.
Daria: Our daughter, Meredith, ran up $10,000 in credit card bills shortly after graduating from college. When Ken found out, he wanted to pay the debt for her. I feared that if we paid off that debt, Meredith would not learn from her mistake and would expect us to bail her out again.
Resolution: We advised Meredith to cash out a $10,000 Treasury bill that she had purchased with money inherited from her great-grandfather—which she did. That way, she wouldn’t be saddled with credit card debt, but neither would she escape her overspending without consequences—all of her savings were gone. If she hadn’t had that Treasury bill, we could have loaned her the money—but we would have insisted that she repay us. Meredith never overspent on credit cards again.
Lesson: Sometimes the best money gift you can give your children is to not give them money. The sooner young people learn to live within their means—and feel the pain of failing to do so—the less likely they are to make the same mistake again. It’s better to learn this lesson early, before higher credit limits make it possible to dig a hole so deep that you can’t easily climb out.
