Insights Into Money Management and You
Money Masters:
Maneuvering A Two-Party Journey

As stand-alone money managers, Money Masters maneuver their financial lives quite skillfully. However, when matched up, in business or personal relationships, with people who have different money attitudes, the Money Masters can encounter difficulty.

Julia (a Money Master) and her fiancé, Roger (a Safety Player), were unable to resolve some critical financial issues that stemmed from a wide disparity in their incomes and assets. Both Julia and Roger have been previously married. She had experienced few financial problems in her former marriage because she and her ex-husband had no children and, for the most part, kept their money separate. However, there were two properties that they jointly owned, a vacation home in Santa Barbara and a condominium in Los Angeles. When they divorced, Julia kept the Santa Barbara house and her ex-husband kept the condominium. All other assets purchased after their marriage were shared equally.

Roger had quite a different situation with his ex-wife and family. He had been the only breadwinner for the family, and his divorce 'wiped him out,' as he put it. His ex-wife was entitled to live in their house until their daughter was of college age, so he would not reap the benefits of the equity in the house for several more years.

Julia was an owner of a successful travel agency that managed not to only survive the lean days since the deregulation of the airlines but also was growing substantially each year due to the addition of some lucrative corporate accounts. Roger was a builder whose small business provided an adequate, but erratic, income. He always seemed to underestimate the time necessary to complete a job, so cash flow often became a problem. Roger was a hard worker but never appeared to be able to save as much money as he planned; his business expenses and child support payments consumed much of his income. He had few investments and kept his money as liquid as possible. However, he felt that he handled his money well because he was frugal and managed to support his business without ever defaulting on a loan or without any major financial difficulties with contractors and suppliers.

As the wedding date approached, Julia asked Roger to agree to a prenuptial contract. In Roger's previous marriage, the money had always been in one big pot; there was no such thing as your money and my money. Now the woman who supposedly loved him was asking for a legal separation of money. Since Roger felt that two people who were married should be able to trust one another and help one another during bad times, he had a difficult time understanding Julia's request.

They were also having problems working out a living arrangement. Both lived in apartments in the suburbs of Los Angeles; both lived close to their offices. Roger wanted to buy a lot on the beach and build a new home for them, but Julia felt they couldn't afford it and didn't want to have to travel a longer distance to work. Roger proposed that Julia pay for the lot and he would build the house. Julia said that when his former house was sold and he had some money to contribute toward the purchase price of the lot, she would consider investing in a beach house. But she needed to be close to her office, and it was not practical for them to have two getaway properties, one in the countryside of Santa Barbara and one on the beach. Driving from the beach every day into town and back would add at least ninety minutes to her already hectic day. Roger was very frustrated by Julia's refusal to buy the beach lot, and he grew argumentative, withdrawn and sullen. Julia felt their relationship was deteriorating and she might have to reconsider his requests or lose her fiancé.

She made an appointment with her attorney, who had initially recommended the prenuptial agreement to protect her assets and future earnings. He concurred with Julia's decision regarding the beach property but advised that the couple resolve their financial differences before he drafted a prenuptial agreement. Obviously some compromises would have to be made by both parties. The attorney suggested that Julia and Roger work with a third party to help them communicate on money-related issues; that is how I met them.

Julia turned out to be a Moneymax Money Master and Roger a Safety Player. Julia made financial decisions in a very analytical way, always looking at the current situation as well as the long-term consequences. It was a style that had always paid off for her. Now she had to make decisions that involved a Safety Player, who has a more impulsive style. Roger did not consider building the beach house as risky since construction was his business. Nonetheless, Roger had not really analyzed the downside of building a house on the beach - the distance and commute time to Julia's office, the advisability of having a house on the beach and a home in Santa Barbara, the work and resources that would be required of him at a time when he was trying to recover financially from divorce. A couple has enough adjustments to make after marriage without incurring a huge expense to build a new house. Asking Julia, a Money Master, to liquidate some of her assets to buy a beach property that she didn't want or need was outside the boundaries of her money style. In her estimation, they had plenty of time to reconsider the project.

Because she was in the travel business, Julia took frequent trips and whenever possible tried to get Roger to accompany her. Since he rarely had extra money for vacations, Roger thoroughly enjoyed the travel but was bothered by the fact that Julia paid for most of the expenses. He was concerned that she would always be able to afford lavish trips and he would never be able to pay for them. Roger could justify his request that Julia pay for the beach lot because he would contribute his labor and expertise to build the house. While that seemed like an equitable trade to him, he knew there was no tradeoff when Julia paid for their vacations. Julia didn't mind paying for the trips because they were usually a business write-off. She didn't like to travel alone and said Roger was a wonderful companion. Even though the travel expenses were not a financial drain on Julia, Roger insisted that the trips be part of their negotiation process.

Julia and Roger had money differences but they also had a lot of similar values. For example, they were both willing to assume responsibility for financial matters. Julia said that when she first met Roger, she wondered if he was attracted to her because of her money, but after getting to know him, she realized that he was too proud to marry a women for money. It was important to Roger that he convince Julia that he intended to pay his own way. While they were dating, if he couldn't afford to take her out to a restaurant, he cooked dinner at home or packed a picnic lunch for the beach. Roger did all the repairwork in Julia's apartment and in her Santa Barbara house. When he couldn't contribute dollars to the relationship, he volunteered his energy and work.

After an open and honest discussion about the pros and cons of the beach property, Julia and Roger decided to put the project on hold and rent an apartment or condominium that both of them could afford, without Julia having to pay the major share of the rent. The decision would give them some time to adjust to living together before they considered buying or building a house. What initially may have appeared to be a very selfish move on Julia's part, not wanting to buy the beach property, turned out to seem reasonable to Roger once he got rid of his anger and disappointment. At that time the disadvantages of a new hose outweighed the advantages. However, both agreed that it would be a viable option for the future. Julia said that she would be willing to sell her Santa Barbara house if he thought that a home on the beach would make them happy and would be a wise investment of their money.

It was very important to Julia that she not begin to resent Roger's lesser income and significantly smaller asset base. In addition, she didn't want to give up her business/vacation trips and she still wanted Roger to go with her whenever he could get away from work. They decided to continue taking trips together but they would budget the trips so Roger would pick up some of the expenses for hotels and food.

Each agreed that their earnings were to remain their separate and sole property for the time being. Julia made a salary of about $80,000 a year and Roger made anywhere from $50,000 to $60,000. Julia would continue to make her own investments and contribute to her retirement fund from her earnings and would set aside an agreed-upon amount of money for their joint checking and savings account. Roger did the same and said he needed to rebuild his asset base and save some money to cover the erratic cash flow of his business.

They agreed to rent a house on the beach during the following summer to see how they liked living on the beach and to see if the commute from the beach to Julia's office was acceptable or stressful. Julia was very pleased with that arrangement. She always liked to cover her bets and the summer rental gave her the opportunity to evaluate building a house on the beach before making a large financial commitment.

Just as it was important to Julia that Roger not become financially dependent on her, it was equally important to Roger that Julia not resent his financial limitations; he was not about to lose his dignity or pride. They both knew they were in a vulnerable situation because in their marriage the wife would be the major income earner and would have the greater assets. It was a fact they both would have to accept. They appeared willing to be flexible and communicative, knowing there would be many personal and financial obstacles in their partnership.

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