Cash clash

Debt and saving
Ruth Berry, a professor of family studies at the University of Manitoba in Winnipeg, says that the difference between how the couple wants to spend their money is indicative of "deeper value positions." But they can probably accommodate both situations: maybe they can't go on a grand European vacation but they could go on a smaller, modest vacation. "It might take longer to save for a down payment, but they should make compromises," she says.

The family formation time of life, traditionally a financially challenging period for couples, has become even more difficult for today's under-45s, says Berry. "There's such discontinuity for young people in the labour force; it's difficult to become well-established. Under-45s carry the highest debt loads in this country and account for the most bankruptcies," she says. "That uncertainty is leading people to marry later, if at all, and have their children later.

"There is no longer a lock-step progression through the life cycle, beginning with a job and annual vacations and ending with a guaranteed pension and a comfortable retirement," says Berry. That's why she tells her students that they must be responsible for their own finances and their own lives by paying off student loans and saving for the future.

Couples would do well to heed Berry's call to action. Neither the Cates nor the Scotts have a formal financial plan in place. "The plan is that I'll get a job," says Susan, laughing. They're not alone: 60 per cent of Canadians don't do any financial goal-setting, and only one in three Canadians earned a passing grade on a recent industry-led test of basic investment knowledge.

You're not alone
Ironically, this news comes as a relief to Marie-Elle Martin*, a new mother who recently returned to part-time work as a new media designer. "You mean we're not the only ones who don't have a plan?" she asks. "Whew!"

Marie-Elle and Roch*, her husband of eight years, feel like they're playing catch-up when it comes to planning for and protecting their 18-month-old daughter's future. Both in their early 30s, the couple, who live in rural British Columbia, are quickly settling the differences in their financial styles - he's a saver, she's a spender -- out of a sense of parental duty. They recently purchased life insurance, and have started putting money aside monthly for their daughter's education. But Marie-Elle is anxious that she's still not as knowledgeable as she should be about financial matters: "I don't know what our net worth is or even how to figure it out."

Berry says there is no shortage of free financial planning resources in libraries and online. One of her favourites is Starting Your Financial Plan, a worksheet sponsored by the Manitoba government and available free online at www.gov.mb.ca/agriculture/homeec/cba37s01.html.

As well, accredited financial planners and debt counsellors will shepherd anxious couples through the planning or rebuilding process, but Smith cautions that a couple with explosive money issues might want to consider signing up for a few sessions with a marriage counsellor first: "If the resentments have really built up, then love and caring can't penetrate those barriers. You sometimes need help opening the pathways communication."

Smith finds it heartening that a growing number of people sought counselling from his company for marital and relationship issues last year. "Three-quarters of our marriage cases were couples who wanted to preserve their relationships," he says. "They didn't come to talk about divorce. Perhaps people are waking up to not only the emotional but also the extreme financial consequences of divorce, especially for women and children."

One of the other things that couples are waking up to, says Berry, is the notion of voluntary simplicity. "It's a lifestyle trend reacting against overburdening ourselves with consumer goods and debt and then spending time and energy earning the money to pay for it. People who go for voluntary simplicity consciously choose a pared-down lifestyle. They emphasize the importance of enjoying small pleasures, building strong relationships with family and friends and protecting the environment."

It's a trend that the Scotts, Cates and Martins are buying into. "Our culture dangerously blurs the line between needs and wants," observes Susan.
"My family was very materialistic," says Marie-Elle. "Ever since I left home, I've been fighting to simplify, simplify, simplify."

Libby says she read "an interesting book last summer called The Joy of Not Working: A Book for the Retired, Unemployed and Overworked (Ten Speed, 2003) by Ernie J. Zelinski, and it really hit me for the first time that if you have food and a roof and people who love you, you have enough. After that, if you're fighting about money, you're probably fighting about something else."

*Names have been changed.

Plan to protect: Secure life, disability and mortgage insurance. Contribute monthly to an RRSP. If you have children, consider setting up a registered education savings plan: the government will add a maximum of $400 to your annual contributions.

Plan to save: Agree to pay yourselves first. Even $25 off the top of each paycheque adds up quickly. Make it a priority to pay down consumer debt (or seek counselling if you're already in too deep - skipping minimum payments or using one credit card to cover another are sure warning signs).

Plan to talk: Set time aside monthly to review your budget and financial goals. Consider starting with the following exercise from the B.C. Council for Families. Each of you draws up an ideal budget given your current resources and notes what each line item symbolizes. For example, a monthly lease payment on a new SUV that represents freedom or status to you might in fact threaten your spouse's sense of security. As you explore what money means to you, begin to negotiate your differences and work together to develop a more creative budget.