Posted by Lending Club :: August 14, 2008 @ 9:17 am

One of the subjects I touched on in my post about spousal influence on personal finance was the fact that family members often have conflicting financial philosophies.

The reasons why spouses may have different financial philosophies are widespread, but a major factor is the upbringing of each person. We all tend to see the way our parents do things as “normal” since we don’t have many other data points. Conflicts arise when each spouse follows a similar financial philosophy as their parents, which may be at odds with one another.

Consider the example of one spouse who lives well within his or her means and another who spends all (or more) than he or she earns. While living within your means is certainly advisable, it’s hard to say which spouse is “right” and whose habits are “normal.” Each spouse probably thinks the other’s habits are rather strange.

The potential for conflict exists not only between savers and spenders but also spouses who earn much different amounts, cases where one spouse is salaried and the other works hourly, or where one wants to retire early and the other plans to work until the day he or she dies. Even something as subtle as a preference for living cash-based or cashless could lead to trouble. Cashing a paycheck may seem smart to the cash-based spouse and foolish to the cashless one.

Conflicting financial philosophies can cause trouble but also presents a growth opportunity. Considering each other’s philosophies, and the origins of each, may help you to find some common ground. If most of what we learned about money came from our parents, it’s unlikely that they were entirely correct. That means that borrowing from other philosophies could improve our overall finances.

Communication is key to many aspects of a successful marriage, and family finances are no exception. If you are able to have open, honest discussions that go both ways, each spouse stands to gain. Talking about your savings, investment, spending, and retirement philosophies will help you to better understand your spouse, as well as yourself.