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Capital One Survey Examines Money Management Practices of Couples

Holiday shopping season presents opportune time for couples to focus on financial goals and habits

MCLEAN, Va.--(BUSINESS WIRE)--Nov. 23, 2009-- The holiday shopping, entertaining and travel season is nearly upon us, and for many couples, holiday expenses can trigger financial anxieties. According to a new survey from Capital One Financial Corporation (NYSE:COF) examining the financial habits of couples, most (55%) of those surveyed have not yet discussed a budget with their partner or spouse for holiday shopping and just over half (51%) report that they have not set aside money to spend on holiday gifts. While not discussing budgets or setting aside money for gifts could lead to squabbles, the majority (78%) of people surveyed say that they generally agree with their partner on how much to spend on holiday gifts. Of those who do not agree on holiday spending, a larger number of women admit they would like to spend more on gifts than their spouse.

“The holidays can be a hectic time, but it’s important that couples remember to talk to one another about their finances and set financial goals together during this season to prevent any added stress or disagreements,” said Shelley Solheim, Director of Financial Education, Capital One. “Holiday anxiety can take a toll on relationships, but there are steps couples can take together, such as deciding on a budget for gifts before going shopping, that will help ease financial tensions during the holidays and beyond.”

The survey also examined the everyday savings and financial practices of couples. Experts stress that it is critical for couples to discuss savings and financial goals regularly, and the vast majority (93%) of those surveyed believe that their partner or spouse is open to discussing money issues.

Though most couples report that they are having important conversations about savings and budgeting, disagreements do arise. One quarter (25%) of people surveyed say they disagree with their partner about money monthly or more. Nearly one-third (29%) of respondents also report that they have argued with their partner about money in the last year. The survey found that younger people (18-34) are more prone to conflicts with their partner about money: 36 percent disagree with their partner about money monthly or more often, while 65 percent of those between 18-24 and 41 percent of those between 25-34 report that they have argued about money during the last 12 months.

“It's not whether couples disagree about money that makes them happy together or not,” said Gregory A. Kuhlman, a New York City psychologist who runs stayhitched.com, a marriage success program, with his wife, social worker Patricia Kuhlman. “All couples have many important areas of difference, often including finances. It's how couples manage all their differences that will determine whether disagreements lead to trouble. Happier couples work together as a team to handle any financial tensions in ways that don't spill over to affect the overall emotional climate of their relationship.”

The survey also found that three-quarters (76%) of those surveyed believe they share the same philosophy as their partner when it comes to managing money, such as saving versus spending. However, younger couples are less likely to believe this is true, with only two-thirds (63%) of those between 25-34 and less than half (47%) of those between the ages of 18-24 feeling like they are on the same page as their partner financially. Where the respondents believed there were differences, many tend to think they are more of a saver than their spouse, perhaps reflecting different spending priorities.

“Money issues are seldom just about money,” notes Patricia Kuhlman. “Financial matters often activate deeper issues in a relationship, including power and control, dependence and independence and commitment and trust.”

Capital One offers the following tips to help couples together address important money management matters, such as budgeting and saving:

  • Figure out what money means to each of you. What experiences in your lives have brought you to your individual approaches to money? How does this influence your financial behavior – for instance, make you more financially expansive or conservative? How does it affect the way you balance your financial, career and relationship goals? Once you've come more to terms with your feelings about money, it will be less difficult to make financial plans and resolve financial problems.
  • Decide who will be in charge of finances. It is important to discuss who will be responsible for what. Determine who will pay the bills, how you will pay them and who will keep track of the finances. Experts suggest involving both parties to some degree, so one person is not solely in charge and so both parties are aware of household finances. The main thing is that you both participate in major decisions and that you're both well informed about your financial situation.
  • Get organized: Gather all important financially-related documents in a central location that is equally accessible to both partners and decide what kind of system you will use to keep things organized. Will you use personal finance software, and if so which one? How will you keep receipts? Where will you keep your files and financial records? How will you organize them? Come up with a system that you both agree on and can follow, and keep it as simple and straightforward as possible.
  • Build an emergency fund. You never know when you will need additional cash, and you should try to build up 3-to-6 months of living expenses in a readily accessible savings account or money market account. The survey found that 65 percent of couples report having the recommended 3-to-6 months emergency savings fund, though younger couples are less likely to have this much saved. Of those with less than 3-to-6 months saving, half (51%) say they only have enough for one month or less.
  • Size up your safety net. Periodically review your health, disability, life, homeowners, vehicle, and personal liability coverage to make sure you're both adequately covered.
  • Figure out how forthcoming you will be about purchases. According to the survey, 16 percent of people don’t check with their partner before spending money. Experts say couples don’t necessarily have to agree on or divulge the cost of every purchase, but they should discuss significant budget factors to maintain trust. Many couples find it better to leave most personal expenses up to each partner while setting a dollar threshold to trigger consultation about particular or cumulative expenditures. Couples who are in financial difficulty do need to take a close look at all of their individual expenses, though.

Survey Methodology

The findings reported in this release are from a telephone survey conducted by the opinion research firm, Braun Research of Princeton, NJ for Capital One Financial Corporation of McLean, Virginia. Braun Research completed 806 interviews with US resident adults age 18 and over who are in a marriage/relationship. All interviews were conducted by telephone with one household member only selected at random. The interviews were conducted from November 1st, 2009 thru November 8th, 2009. The margin of error for this survey 3.45 percentage points for each group at the 95% confidence level. Interviews were monitored at random. Sampling for this study was conducted using a national probability replicate sample. All interviews were conducted using a computer assisted telephone interviewing system. Statistical weights were designed from the United States Census Bureau statistics.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N.A., had $114.5 billion in deposits and $209.7 billion in total managed assets outstanding as of September 30, 2009. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Source: Capital One

Capital One
Shelley Solheim, 917-589-6203
shelley.solheim@capitalone.com