Experts encourage presents that lift finances, love life

Every year, retailers encourage the nation’s lovers to show their love by spending money on their honey for Valentine’s Day.

This year, despite a recession, has been no different. The International Mass Retail Assn. expects Americans to spend an average of $94.50 per household on Valentine’s Day gifts, up from the $84.20 spent last year. That adds up to a lot of candy alone: an estimated $1.05 billion on sweets in 2001, expected to rise to $1.09 billion this year.

Think of how many relationships would be saved if some of the money spent on Valentine goodies was redirected and spent on financial counseling. Conflicts about money are still one of the top reasons why couples divorce, according to experts.

Valentine’s Day reminds me of how so many couples neglect to make finance part of their romance.

So here’s an idea from Cupid this year: In addition to fattening up your pooh bear with chocolates or an expensive dinner, give your love life a boost by purchasing a personal finance book and reading it with your Valentine. Start with “Smart Couples Finish Rich,” by David Bach.

It might also be a good time  perhaps not during the candlelight dinner but soon thereafter  to address the many misguided notions you or your partner might have about money. Let’s start with these:

l How much he or she spends is an indication of how much he or she loves me. In a survey by Money Management International, a credit counseling agency, the men polled said they would spend $121 this Valentine’s Day. The women said they planned to spend $83. “Far too many consumers will spend way too much on a Valentine’s Day gift,” said Rudy Cavazos, director of media relations for the Houston-based Money Management. Stop the madness. Love means never keeping score on what your sweetie spends.

l A guy should spend two months’ salary on the diamond engagement ring. Who do you think came up with that ridiculous guideline? A diamond sales and marketing firm, that’s who. Ten percent of the reported 2.3 million couples who get engaged each year do so on Valentine’s Day, according to the Diamond Trading Co. So aren’t those couples lucky that Diamond Trading would pass along its little gem of advice on how much a ring should cost? Ignore it. On a salary of $50,000 a year, you’d be out $8,333 before taxes. Spend what you can afford. If your intended has some arbitrary ring price or diamond size in mind, speak up now or forever hold your peace. But trust me, if you start your marriage off with this kind of spending you might not have any peace.

l Everything has to be equal. After 10 years of marriage and talking to numerous experts, I hate to tell you this: Everything won’t be equal all the time. Many couples go awry trying to precisely divide up the money and bills so that whoever is earning the most (or the least) pays their “fair share.” You end up acting like two spoiled siblings fussing over who got the bigger slice of pie. I actually had one reader say she hid purchases from her husband because if she didn’t, he felt compelled to match her spending, even if he didn’t need anything. Just another example of why the divorce rate is so high. If you’re married and working toward the same financial goals  a home, a secure retirement for both of you or a college fund for your children  everything doesn’t have to be split down the middle. You aren’t roommates. However, it is important to set up a system in which you both agree on how the bills will be paid and how much to save from each paycheck. And, if you want to keep the peace, each of you should have some spending money to do with as you choose.

l You shouldn’t marry just for money. But what do married people have at retirement that divorced and never-married persons don’t? A lot more money, according to Janet Wilmoth, assistant professor of sociology at Purdue University. Her research showed that for every dollar the continuously married person has accumulated, the never-married person has about 23 cents. The divorced person who never remarries has a 75 percent reduction in wealth.

The potential financial benefits of marriage include increased home ownership, insurance coverage for spouses, larger savings and survivor pension benefits.

For example, you have to stay married at least 10 years to qualify for Social Security benefits based on your former spouse’s employment record.

As Bach says in his book, “When you work together on your finances, you can compound the results.”