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By Christine Benz | 01-11-2012 02:00 PM

Constructive Talk on Financial Matters

A lot of couples' discussions about money happen at the wrong time, says financial planner and author Carl Richards.

Christine Benz: Hi, I'm Christine Benz for

Investors often behave in ways that run counter to their own interests. Carl Richards, a financial planner, a blogger for The New York Times, and a contributor to, has written a new book that addresses this tendency, and it's called, The Behavior Gap. He is joining me via Skype to talk about it today.

Carl, you've got a series of sketches and discussions in the book about conversations that we might have with our spouse or a life partner about money, and how we are often not intersecting or talking about what the real problem is.

So, let's talk about one, where you've got a couple of people kind of talking around the central problem. I assume that's something that you encounter in your practice, and how do you suggest that couples or families get around that problem?

Carl Richards: My wife loves this story, because it was a conversation we were having. And I have found that at least for me and the feedback I've gotten from lots and lots of people over the years is, we often talk around money. We were never trained, most people, it seems like we grew up in this generation where money, sex, and politics were things you didn't talk about in polite company. Now, of course, the political scene changed, maybe too much, but the money thing, we still haven't figured out how to talk about it. So, at least the discussions like this.

My wife came home, and we've been married 15 years, this just happened a year ago. She came home and said Christie, a neighbor of ours, had just remodeled her kitchen. And she came home and said, "Christie's remodel looks so great; it's so awesome. I love the way her kitchen looks." That's what she said.

And I verified this with hundreds of people, and I don't know if it splits generally along gender lines. I don't know if male or females there is any difference. But what I was doing while she was saying that, was calculating, of course, how much it would cost to remodel our kitchen. And I've done this for years. She'd come home and say, "The Smiths just went to China on a trip, or John just bought a new car; I really like it."

What I've been doing for years was calculating how much would it cost? It's going to cost $59,279 to remodel that kitchen. And I said out loud, "We can't afford that." And she just looked at me and said, "What are you talking about?" And I said, "Well, you just said you wanted to remodel the kitchen." She said, "No, actually, I didn't say anything about wanting to remodel the kitchen. I said that Christie's kitchen looks really good." I said, "I know, but that means you want to remodel the kitchen?" She said, "No. Actually it just meant that Christie's kitchen looked really good."

"And so, wait a second, that time that the Smiths went on that trip, you didn't want to go to China?"


"And what's his name's car, you didn't want it?"

"No. I just wanted to talk about the trip to China, and I thought the seats on the car were comfortable."

So, what I learned was, she was saying one thing, and I was hearing a completely different thing. For years, I have been doing that. And I am a financial planner. We've been married for 15 years. And I had been calculating. Now, I still calculate, we've had conversations, but I ... catch myself quicker, and say something like, "Tell me about the kitchen." That's changed my marriage!

Now, I think this shows up other ways, like, "Are we going to pay for college?" We sort of just delay these discussions, and they end up causing a lot of underground stress until we stop and say "Wait ... why don't we just address this. Let's sit down and solve this problem."

Life insurance is a great example. You have your first child, somebody suggests to you that once you have children, you should have life insurance. And at night, you wonder about it, but you never sit down and actually address it.

Benz: So, what's your best advice to couples or any sort of family situation to make sure that they are on the same page when it comes to money matters, so they are not just talking around these important decisions that they need to make.

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