Don't sweat debt

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The Smart Cookies, from left, Angela Self, Katie Dunsworth, Andrea Baxter, Sandra Hanna and Robyn Gunn.

You don't have to do it on the first date, or even the 10th, but once you're in a committed relationship it's time to get down to business.

It might be awkward at first, but if you and your honey want to clear one of the biggest hurdles facing couples today, you're going to have to start talking about money.

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Yes, we know you'd rather not. A 2008 poll conducted for the Bank of Montreal found that money is the most sensitive topic of conversation for Canadians -- ahead of politics, religion, weight and even sex.

Get over it. Because as Canada's divas of debt destruction point out in their new book, although money can't buy you love, it can get you two tickets on a fast train to Splitsville.

"It's what couples fight about most, but it's also the topic that tends to get pushed to the side or just ignored," says Angela Self, one of the authors of The Smart Cookies' Guide to Couples and Money.

The book, subtitled Earn More, Argue Less, Achieve the Life You Want Together, is the second from Self and her fellow Smart Cookies (Andrea Baxter, Katie Dunsworth, Robyn Gunn and Sandra Hanna), who co-wrote it with New York-based finance journalist Jennifer Barrett.

Bottom line: When it comes to romantic mergers, financial compatibility is just as important as emotional and physical compatibility.

Before the Cookies, now ages 28 to 34, started their self-help money club in Vancouver in 2006 -- and quickly became a North American franchise after appearing on The Oprah Winfrey Show -- they were fiscally clueless, drowning in consumer debt and paying the price in their personal lives.

And guess what? Opposites attract in love and money.

"We certainly found that to be true in our own lives, and it tends to be the pattern for a lot of people," says Self over the phone from Toronto, where she currently resides.

"You and your partner bring your own money personalities into the relationship, and unless you're willing to strike a balance, there's going to be a problem."

Self, 30, speaks from experience.

Before she became a Smart Cookie, the former TV production assistant was a Zombie Spender -- defined in the book as someone who pays little attention to where their money goes. At the time, she was earning $10 an hour and relying on her high-interest credit cards to fund her "spend now, worry later" lifestyle. As is typical of someone with this spending style, Self often returned from shopping trips with items she didn't recall buying.

"Once I came home from IKEA with two white duvets," Self recalls. "I was just walking through the store and putting things into my big yellow bag."

Research has shown that women enjoy shopping more than men, with the former twice as likely to shop impulsively -- and for emotional reasons. (Men shop less often, but tend to make bigger purchases.)

All the more reason for couples to get on the same page financially, says Self, who found out too late that her live-in boyfriend was a Security Seeker money type.

"My partner was very cautious with his money, that's how he was raised. But until we actually had a conversation about money (after breaking up), I just thought he was being kind of cheap."

They had good intentions, though, and early into their cohabitation even wrote down their financial values and priorities -- only to discover the lists were radically different. "We tossed that piece of paper away and never came back to it," Self says. "I think we feared it would create anxiety and stress."

Attracting your financial opposite can actually be a good thing, she says, as long as you play to each other's strengths rather than get into a power struggle -- or simply try to hide your bad habits.

Dunsworth, a reformed shopaholic, used to wait until her partner went golfing to buy her $200 jeans, which she'd hide in the back of her overflowing closet. He wanted to save for a bigger house so they could start a family and wasn't impressed when he found a misplaced receipt.

"Problems arise when you're in a relationship and you treat it as an individual venture when you're supposed to be a team," says Self, who admits she let her ex handle all the household finances. That's not necessarily a bad thing, she says, provided each person knows how much money is coming in and going out.

Even if a couple chooses to pool all resources, the Cookies advise that each partner retain a separate money identity -- a credit card, line of credit or bank account in his or her own name. When Gunn divorced her husband, everything was in his name, so she couldn't get a credit card without a co-signer.

The Smart Cookies, who have their own TV show on the W Network, also recommend allocating "fun money" in the monthly budget so each partner can enjoy a little guilt-free spending.

Crunching numbers and balancing budgets may not be the most romantic way to spend time together, but dealing with money issues doesn't have to be boring or stressful either, says Self.

The book goes well beyond how to avoid bickering over bills and also includes tools, techniques and strategies -- such as the Perfect Day exercise -- that couples can use to realize their dreams, whether it's buying a home, starting a family or planning for retirement.

"It's all about 'what can we do, where can we go as a couple,'" Self says. "And that's an exciting conversation to have."

Two of the Smart Cookies, Katie Dunsworth and Sandra Hanna, will be in Winnipeg this Friday for a book signing at noon to 1 p.m. at McNally Robinson Booksellers.

What's your spending style?

YO-YO SPENDER -- You deprive yourself some days and then overcompensate on others, and hope it will all even out in the end.

SLACKER SPENDER -- To you, convenience often matters more than cost. You're more likely to buy your lunch at an overpriced deli near your office than walk the extra blocks to the less expensive sandwich counter.

IMPULSE SPENDER -- For you, emotional urges trump reason when it comes to spending money. It's for people like you that grocery stores line the shelves of checkout lanes with candy and toiletries and magazines.

SALE! SPENDER -- The words "sale" and "discount" and "clearance" make you reach instinctively for your wallet even if it means spending more than you initially intended.

ZOMBIE SPENDER -- You pay little attention to where your money goes. You can come home from the grocery store and wonder why -- or when -- you picked up some of the items in your bags.

STATUS SPENDER -- You wouldn't dream of cutting corners with cheap knock-offs... if only your income were as good as your sense of style!

What's your money type?

Security Seekers -- Would rather be safe than sorry when it comes to their money and investments.

Achievers -- Tend to be quite ambitious and very aware of their status. Their motto: work hard, play hard.

High Rollers -- Pleasure- and thrill-seekers, they like to have fun, no matter what the cost.

Idealists -- More focused on what they can do with their money to help others and better the world than on actually making money.

Systematic Strivers -- Like to consider all of their options before they make any financial decisions -- major or minor. Great money managers, but are prone to "paralysis by analysis."

Dawdlers -- Well-intentioned, but ultimately just can't be bothered to take an active role in their finances. Often forget to pay their bills. Typically not big earners nor big spenders.

Couples math

1. Have a financial heart-to-heart

2. Do the math: know how much money is coming in and going out

3. Picture a perfect day together -- five years in the future -- for inspiration

4. Create a spending plan that reflects your perfect day AND both your money personalities

5. Have monthly check-ins or join a money group to hold each other accountable

Republished from the Winnipeg Free Press print edition January 26, 2010 C1