After Valentine's Day, It's Time to Talk to Your Loved One About Money

Chances are that a least a few of you out there have put off or just outright avoided talking to your partner about money. I know because I see a lot of you come into my office after this has become a problem. But a few recent studies show there are more Americans that you might think who are hoping a little avoidance might keep the tensions down.

In a CreditCards.com survey last January, 6% of respondents admitted to having a secret account or credit card, and far more, about 20%, said that they had spent $500 or more without telling their financial partners. Obviously, most of us won't go so far as to resort to secrecy. Instead we reach an unspoken agreement not to talk about things with our partners. We know it's not a great solution, so why do we do it?

Like the other decisions we make together in a household, financial decisions bring out the differences in our styles, tastes, and priorities. She's happy to spend more on hiking trips; her partner would cut down on the travel to get a better car. Neither position is wrong, anyway. This is simply a matter of preference, and in any healthy relationship, the two will find some sort of compromise. But compromise doesn't work as well when our sense of survival kicks in. And that's precisely what tends to happen when financial discussions turn heated.

Not a few of us are prone to a particularly strong belief that the world is unpredictable, that fate is capricious and that disasters can happen to anyone. When these sort of beliefs simmer in the back of your mind, you are often quick to make the leap from an apparently mundane financial decision to a sense of looming danger and vulnerability. Job losses, medical emergencies, housing emergencies and other far more amorphous dangers float in the back of your mind. And a perfectly innocent partner can trigger those fears by suggesting you take $800 out of the savings account this month to replace the old refrigerator. Those of you with financially anxious partners will recognize this moment and roll your eyes.

But before you get too smug about your ability to keep that $800 fridge in perspective, make sure you aren't one of those partners who spend money in the same spirit of anxiety. People who seem unconcerned about the consequences of their spending may also be living with the sense that catastrophe could strike. For them, hoarding does no good—the best strategy is to secure anything they really want or needs before it all gets taken way.

Not everyone is anticipating a financial crisis, of course, and I haven't got room in this one post to cover all of the other deep-seated emotions, desires, and fears that tangle our financial decisions. But if either of these situations sounds familiar, then those household discussions about everything from grocery bills and vacations to retirement contributions and job changes are going to demand a little extra care and a little extra understanding. As I routinely explain to planning clients, I can give you all of the financial options and the math behind them, but the right choice in the end will be the one you can live with.

Money. The Person Next To You Probably Isn't Doing Any Better

A client walks into my office for a first meeting, puts down an envelope of assorted papers and takes a deep breath. I know exactly what is going to come next. I don't know yet what state her finances are in, of course. But what I do know is that she is already feeling embarrassed—embarrassed because she doesn't have enough money, embarrassed because she should have more, or just embarrassed that she has so much and still doesn't entirely understand what the heck she's doing with it. And don't let the "she" confuse you—all of this embarrassment around personal finances applies equally to men.

One of the most fascinating things about advising people on their finances is that you are often the only person who gets to hear what they are actually thinking about their financial situations. To me, their situations are almost never shocking—I've seen people with a lot more assets than you'd expect and plenty with a lot less than you'd think. What is shocking is how many people think their situations are unusual.

So here are a few bits of random information to make you feel better before the weekend—

Americans owe a total of about $8.17 trillion on their mortgages. Yours is just a drop in the bucket. And if you haven't bought a house, well, this is a good time to look at all those mortgage-bound borrowers and feel a little bit smug about your freedom.

Student loan debt stands at about $1.19 trillion, up about $78 billion from last year, which means that student loans are about as American as apple pie. In fact, more American than apple pie—how many Americans do you know who can make an apple pie?

The National Financial Educators Council tested over 8,000 people from 50 states on very basic financial literacy. The average score for adults 25 to 50 years old was a C-. Our oldest Americans (aged 50+) had the best grade with a resounding 75 out of 100. If you feel badly about the grade for your age group, at least you aren't in the 19 to 24 crowd. They got a cringe-inspiring 67% of their answers right. But then, again, mostly they're just trying to figure out the student loan apps right now.

The whole point of emergency savings is to spend it in emergencies. Also, emergencies—medical, employment, legal, etc...—happen all of the time.

Maybe that last point was not what you were expecting on a financial blog. But I find myself reminding people all too often that making ourselves (or anyone else) feel embarrassed about the ups and downs of life just doesn't make sense. And maybe, just maybe, if we talked about money more as a society, we might see that the person sitting next to us is trying to figure out all of the same stuff.

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Stats are from the New York Federal Reserve's May Report on American consumer finance, available online for anyone looking for some laughs.

One of the best (free!) places to get good information on financial basics is the Practical Money Skills For Life video series—and my blog, of course.