Are the Down Markets Creating Money Stress at Home?

Suzanna De Baca -- Expert Business Source, 4/10/2008 6:54:00 AM

Unless all your money is in a coffee can under your bed or safe in CDs spread out over numerous banks, you’ve probably watched your investment balances decline in recent months.  Let’s face it, down markets are stressful.  If you’re letting money issues creep into your relationships at home, it might be time to clear the air out with a good, open financial talk.

Uncertainty creates anxiety.

Down markets and uncertain economic times can create anxiety personally and professionally.  Maybe you had money in the markets that was earmarked for retirement, for your kids’ college savings, or for a vacation; if those funds have declined, you may be confronting a need to change plans.  Maybe you run a company and the slowing economy is reducing your current revenue and clouding your future outlook; if revenue dips, you may need to regroup. Maybe as you hear about layoffs, you are concerned about your job; again, if this happens, a change of plans may be in order. 

One of the things that make financial uncertainty so difficult is, well, the uncertainty.  All of these scenarios can be stressful, but not knowing exactly what is going to happen or what to do compounds the anxiety.  If you are in charge of making money or managing the finances, you may feel more pressure than ever.  You may be losing sleep, weighing different situations in your head, or having internal debates about what the best course of action is.  Having a plan, even one that might change, can often relieve stress just as sharing your concerns with your partner or spouse can make you both feel better.

Get the money stuff out on the table.

Many couples do not openly discuss finances even in good times.  Often one pays the bills and handles the accounts and feels compelled to be in charge.  Frequently one partner is in the dark about what is going on with the money and doesn’t really even want to know. There are often expectations on both sides that remain unspoken:  he knows what he is doing; she said that she’d do this; he said that we’d be okay.  While this lack of sharing can create problems even in good times, in difficult or uncertain times the uncertainty can spiral into panic, worry, or anger.

These patterns can be tough on both people in a relationship.  For many, talking openly, honestly and candidly about money is hard.  But getting those issues out on the table is necessary in order to create a plan that works for both of you.

Here are a few suggestions about how to talk to your spouse or partner about money in uncertain economic times.

Ask if you can have a business meeting.  Sit down and share your feelings and concerns about money with your spouse or partner.  If you’re worried about your investments, talk about what is in your portfolio and what is happening. Evaluate whether you are okay with sitting out the rocky markets or if changes are necessary. If you’re concerned about your company or job, let your spouse or partner know that you are worried, what the specific worries are, and how it is affecting you.  If you’ve been holding these feelings in, chances are your loved one suspected that you were worried all along and will be relieved to hear the truth. 

Look at the facts as objectively as possible.  If you are uncertain about what is really going on, get the facts straight.  While it might be painful, take a hard look at what is bothering you, whether it is your investments, debt, current income, expenses, or future revenue.  If you don’t know the reality of the situation, it is impossible to make a plan.

Discuss Plan B, or C.  If you have seen significant enough losses that your future plans (such as retirement, vacation, or large purchases) need to be put on hold, talk about the situation.  Each person should express how he or she feels.  Even if the losses are in line with the market and no one has made bad investments, it is still okay to feel let down; if you get those feelings out, it is easier to resolve them and move on. So, you may not go to Disneyworld this year; it is disappointing, but if you talk it out, perhaps you can agree on a less expensive vacation that still makes everyone happy. 

Similarly, if you are confronting a slowdown, think together about what you can reduce or how you can increase income.  If you are facing job loss, shore up your resources and discuss a plan of action.

Have the talk.

Financial conversations are difficult for many people even in good times.  In difficult markets, however, money issues can lead to stress, which can lead to tension or fights.  Sitting down and having objective, open conversations about finances can help alleviate the tension and allow you to make a plan that works for everyone.

Disclosure:  Suzanna de Baca is President of Private Capital Solutions Group, a financial and investment firm in Des Moines, Iowa.  She is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), 7 Hanover Square, New York, NY 10004, (888) 600-4667.  Securities products/services and advisory services are offered through PAS, a registered broker/dealer and investment advisor. Private Capital Solutions Group is not an affiliate or subsidiary of PAS.
PAS is a member FINRA, SIPC.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice.