Sorting out couples’ differences in spending is crucial to saving marriages
by Susan Trausch
Couples and money – it doesn’t get much hotter than that.
He spends. She doesn’t.
She manages the finances. He thinks she’s a control freak.
He wants to buy the kid a car. She says the kid should work for it.
Money is what they fight about, but the real problem is they’ve never learned to talk about it.
“The number one cause of divorce is money – sex is a distant second,” says George Kinder, who runs Kinder Financial Services in Cambridge, a financial planning firm that helps people work out their psychological attitudes toward money, along with their budgets. “Money is about identity, and identities clash. People need to learn how to listen to each other.”
Robin Carter, who runs MoneySense, a financial counseling service in Newburyport that often works with couples, says she has a client who lost his shirt in the stock market but was afraid to tell his wife. Another man, who was in charge of the family finances, ran up $60,000 on his credit cards, and never told his wife because he didn’t want to worry her or deny her anything.
Carter says when a spouse learns about such secrets, it’s “like having a partner coming in and telling you that he was having an affair. The first question you ask is, `Is it over?’ If a person is willing to recognize the seriousness of the breach, then you can talk and start to work it out.”
She notes that not only do people have trouble talking about money, but they may be attracted to the very spending attitude that will eventually drive them crazy. “We are attracted to people who give us permission to do what we want to do, and who take care of us,” says Carter. She described a couple who got together because the man was loose and fun with money, which made the woman carefree and happy. But she was a worrier at heart and couldn’t sustain the joie de vivre after they were married. Carter describes her as “borderline obsessive” about saving.
Carter helped them work out a budget, and they signed a contract with each other, agreeing to pay the bills on time and to set so much aside for fun – $400 a year for dining out, a manageable country-club membership, and a cap on discretionary spending.
“They needed to give each other latitude so that one person wasn’t feeling controlled by the other,” Carter says.
That issue of control is often the cracking point in a relationship, and sends couples to a divorce lawyer or mediator to guide them through a split.
And if money is incendiary during a marriage, it’s a nuclear bomb in a divorce. Every dollar sign or attempted discussion of who gets what can fuel the anger, disappointment, and pain that the relationship has become. The more money a couple has, the nastier and more public the battle can become. Hollywood is full of these clashes. So is the business world.
Last year the former wife of entrepreneur Kenan Sahin petitioned Norfolk Probate Court asking that the couple’s 1996 divorce settlement be reopened after the businessman sold his company, Kenan Systems, to Lucent Technologies Inc. for $1.48 billion. In the original divorce settlement, a judge had estimated that the company was worth only $4.9 million and had awarded Mrs. Sahin $1.5 million. The court dismissed the case this year.
Most divorces do not deal in such stratospheric numbers, do not go to trial, and never make headlines, but the emotional pain is just about universal and the battleground for those emotions is often financial.
“Even if an affair breaks up the marriage, the divorce is about money,” says Diane Neumann, founder of Divorce Mediation Services in Newton. “The jilted spouse almost always says, `I know they’re hiding money.’ Everything feeds the distrust. Say a man makes $140,000 a year and the numbers are all there in his tax returns and investment accounts because people leave plenty of trails. The wife will still say, `He’s hiding money.’ ”
Neumann works to defuse the emotions and to “demystify the finances” as she gets “all the pieces on the table” and helps the couple discuss them as rationally as possible. “A couple comes in with a narrow focus,” she says. “I widen the range to a more cooperative framework.”
The key word is “cooperative,” which for some couples is impossible. Choosing a mediator to help hammer out a divorce agreement can be less costly than hiring an attorney, with mediation fees running from around $120 per couple per hour to $350 – Neumann is on the high end. But the process requires the couple to be on speaking terms and willing to spend the time it takes to forge the agreement.
Many mediators, Neumann included, also recommend that each spouse hire his or her own attorney to review the agreement and act as a legal coach, which can add to the cost, even though the lawyers don’t participate in the mediation sessions.
The simplest and least expensive route for a breakup is for the couple to file for divorce themselves without attorneys or mediators, although that’s recommended only if the relationship is amicable, and the marriage was short with no children and few assets.
If a couple wants something in between mediation and the traditional confrontation between opposing attorneys, they might consider a collaborative law agreement. Like mediation, it requires that the separating spouses be able to sit in the same room. Used in a half-dozen states, including Massachusetts, the process is gaining popularity for its emphasis on civility and its contractual commitment not to go to trial. The husband and wife and their respective attorneys work more like a committee rather than opposing armies, hiring one accountant and sharing information.
“Everyone is present for every meeting,” says Rita Pollak, attorney at Goldenberg, Walters, Lipson, Pollak and Popkewitz in Brookline. She and David Hoffman of Hill & Barlow founded the Collaborative Law Council this year, and 40 Boston-area attorneys are participating.
“If one party abuses the process or won’t participate, then the attorneys disappear. The product you have generated disappears. The experts you have jointly hired cannot be used. You have to start over with new counsel and recreate all the information. So there’s a lot of incentive to make it work.”
Divorce attorneys, often portrayed in go-for-the-jugular stereotypes, say that the traditional divorce negotiation, if handled by responsible professionals, also works at “getting to yes,” rather than getting to court. They say their job is to try to cool the hostility rather than promising to “make the crumb ball pay.” But that’s exactly what a lot of clients want, even though Massachusetts is an equitable distribution state and most attorneys can tell about where the case is going to come out at the start.
“Divorce is not about revenge,” says Boston attorney Ann Baum. “This is a business process. It’s dollars and sense. It’s breaking down a partnership.”
That means thinking rationally about the house instead of emotionally – sometimes keeping it costs too much. The “business process” means not fighting over pots and pans, but looking at the hard-core stuff of pensions, stock options, child support, college educations, and health insurance.
“Don’t waste money on the fight just to fight,” says Fern Frolin, a divorce attorney at Sooho and Frolin LLP in Newton, who also does mediation law and is a member of the Collaborative Law Council. “Focus on what’s worth fighting for. People get married to the litigation. It replaces the relationship.”
Jerome Weinstein, director and cofounder of Divorce Resource and Mediation Service in Newtonville, knows of a couple that was in litigation for nine years. “They came to me and settled in five hours,” says the 72-year-old Weinstein, who began practicing mediation in 1976.
“You have to wait out the anger,” Baum says. “I’ve had cases that go on and on. Then all of a sudden the client calls and says `I’ll take that deal.’ And it was offered 1 1/2 years ago.”
The anger and hurt can boil like waves in “The Perfect Storm,” and linger even after things are supposedly settled.
A 43-year-old computer executive says he swallowed his fury when his wife left him for someone else because “I had to think about what’s best for my son.”
He chose mediation, paying Diane Neumann $5,000 for her services, because he felt that as the sole wage earner “it was the only way I could come out of this alive,” and be able to negotiate more liberal visitation rights with his son. “I didn’t want to be a weekend dad,” he says, noting that typically fathers get the kids every other weekend. His 8-year-old son is now with him three nights a week.
But the money still rankles, for he pays nearly half of his take-home pay in child support, and gave his wife 40 percent of his pension and one-third of his stock options.
“I’m in the black,” he says. “But I’m living in an apartment my parents own and paying cheap rent. My ex and her finance just bought a $250,000 home and they’re buying a business. Is that right?”
Another man, who spent $15,000 in attorney fees to fight with his wife over visitation rights, wound up with the standard every-other-weekend plan and wishes now that he’d put that money into a custody fight.
“It’s like death,” says a 60-year-old Waltham computer programmer whose husband became involved with someone else. The couple had been married 32 years. “I couldn’t function. It took me six months to get my head out of the sand. I’d be in a store, pick up an item, and wander around for 20 minutes because I couldn’t make up my mind to buy it. I could make no decisions.
“You have to educate yourself,” says the woman, who tired of support groups where “people keep crying and wringing their hands.” She found more practical guidance at The Divorce Center Inc. in Framingham (it also runs programs in Newton, Braintree, and Walpole). The organization, founded in 1983, is a nonprofit educational and referral service that gives weekly lectures on all aspects of divorce as well as providing names of attorneys, mediators, therapists, and financial experts.
Like most people having to adjust to life on one salary instead of two, she learned to put herself on a strict budget – no more golf, not as many haircuts, cheaper cosmetics, and nothing but the basics at the supermarket. Her annual household income went from $100,000 to $36,500 after the divorce – her husband now pays $1,100 a month in alimony, which all goes toward her mortgage.
The woman paid $3,000 in attorneys fees – a relatively low-cost divorce. Breaking up can run from $7,000 to $20,000 or higher. Ted Orenstein, president of The Divorce Center, has seen bitterly fought divorces costing $40,000 to $50,000, and had a client who spent $1.5 million.
“The job of a good lawyer is to try to tone down the anger and give perspective, but sometimes people don’t want to listen,” says Orenstein, noting that The Divorce Center works to “give people knowledge so they’re less desperate. They’ll get through this. They will be happy again and they will love again.”