The Hindu Business Line : Pati, patni, and dough

MONEY is evil, and love is a sin. But there's virtue in reading Love & Money, by Jeff D. Opdyke, published by Wiley (www.wiley.com), for it is not a book on how to make money through manipulative love, but "a life guide for financial success".

Finance has a personal angle, oft-ignored by finance experts, much similar to `most gentlemen' — they don't like love, they just like to kick it around, as Cole Porter said.

Opdyke, who has been running a popular Sunday column in Wall Street Journal, lays emphasis on effective, straightforward communication. "By being secretive about our money, we create chasms in our relationships that can seem impossibly large."

And even as "we keep the peace by keeping quiet," a storm keeps brewing and the chasms widen. Sounds too true?

Simple truth is that you can manage money without putting your loved ones to test. Contrary to common thinking that money can ruin family bonds, the author points out that the culprit is our inability to face the subject. "Few people know how to broach the topic of money at all, even with the people they're closest to in life," as if dough-talk is all about pati, patni and woh.

The intro is direct: "I want you to shine a light on your money and put it under the microscope." Don't relegate money "to some dark, hidden corner of your life." Instead, drag it from the wraps and "open it up to truthful, honest reflection." Irresistible exhortation.

There are five stages in the book, one for each phase of life. Thus, it begins with `formative years' and chapter one is titled, `Budgets are like diets — everyone cheats'. Budgets generally look over your shoulder to base future spending on historic patterns, explains the author.

Try a `spending plan' instead, he advises, because it looks ahead "to estimate spending on what you want to achieve." Do this as a joint exercise, to develop `financial intimacy' through communication, for "both partners must speak up for what they expect their expenses to be for the month."

Then comes the dreaded `debt'. It is feared as if it were "VD in a relationship," but why? Isn't it puzzling that debt should be a stigma when it can be so easily obtained? "Are we defined by what we owe?" asks the author.

Debt as a leverage to asset building is not a problem. On the contrary, if you find behind mounds of debt bad saving habits and compulsive spending problems, the issue is of self-discipline. "At the core, they represent a misguided sense of entitlement. You think you deserve this and that, so you buy this and that, and you rationalise your need to buy it now, maybe because it's on sale."

Habits that you followed when single carry over after marriage. "Being equal in terms of income is not a necessary prerequisite. Being equal in terms of outflow, though, is a necessity." Check it out!

Here's another valuable tip: "To prevent hidden debt (or any other hidden matters) from wrecking your life or your future life, your finances need to be as transparent as gin."

When financial priorities clash — such as when "one wants to eat at pricey restaurants and travel, while the other wants to save for a down payment on a house" — marriages ride rough weather.

Financial incompatibilities are not to be brushed under the carpet, counsels Opdyke. "Remember, money isn't the root cause of divorce, but failing to talk about money certainly is a leading cause of financial friction in a marriage."

There is a chapter on `money laundering' — not the stashing away of money in the Isle of Man or the Caymans, but "hiding money from your partner". This `financial chicanery' is widespread, notes the author, and it is often justified as `financial independence'.

But there is a dark side too: "Sometimes, laundering family money is centred on shame and secrecy when one partner is spending on a vice that likely would roil the relationship... You just sneak the dollars that you need to feed your fix."

There's not much honour in it, argues Opdyke, because when you steal from your spouse, "you're essentially stealing from your own future to satisfy a small, selfish want right now."

There are no rules governing how much pocket money you can give your kid. Age and locale are determinants, apart from family finances.

If your child earns money on a summer job, you may want to help him or her "from dumb mistakes"; but Opdyke feels otherwise: Such mistakes may be "the best lessons kids will ever learn about managing money wisely."

The last part of the book is on `the later years'. Couples rarely discuss retirement. One school of thought runs like this:

"You don't know if you're going to step off the curb tomorrow and get hit by a bus," so why plan for old age.

"Then again, you might wake up tomorrow and realise you're 72 and out of money and fearful of where your next meal will come from," reasons Opdyke.

An ideal gift for your spouse!

BookValue@TheHindu.co.in

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