Using money to make an impression

It's pretty normal to consider how other people will respond to our choices. We are social creatures and making a good impression is useful in many situations. There are times when it's very valuable to stand out in a crowd or fit in with a group. It can influence others to pay attention to us or support us when they might not otherwise do so. Money, especially our spending choices, can be a part of that.

Sometimes using money in this way can become overly important to us. This can even happen to people who wouldn’t normally think of themselves as “people pleasers”. When the good opinion of others is the main driver for our decisions, especially those involving money, we can end up living inauthentically or using money in ways that doesn't support our long term goals.

The most obvious example of this is when a person goes into debt buying expensive designer or luxury items to signal to others a wealth they don't actually possess. Overspending on gifts in order to appear generous or on socialising at trendy bars and clubs in order to seem like part of a fashionable in-crowd are other variations of this.

There are also more subtle ways this tendency can show up. For example, it can appear in reverse. Imagine someone whose social circle disapproves of, or is suspicious of, people with wealth and power. A member of this group might feel compelled to deny themselves anything that might be seen as a status symbol, even if they would enjoy it or it would make their life better or easier. Or they might not to make any overt moves to improve their career and earn more or manage their finances effectively, leaving them worse off and possibly stuck in unfulfilling work.

The interesting thing about this tendency is that it can occur even when there’s no active pressure from the people we’re trying to impress. The compulsion towards certain choices can come entirely from within. We form beliefs about what others want from us and anticipate getting a negative reaction if we don’t meet their expectations. The trouble is that all of this is a story we’re telling ourselves. It may or may not be true. Sometimes the people we are trying to please couldn’t care less what we do or may want something different from us than we’ve imagined. It’s worth looking for evidence of people’s true expectations and opinions. Sometimes it’s simplest just to ask!

And if a person or group really does expect you to make financial choices that don’t align with your values or goals, it’s worth considering whether it’s really worth going along with their wishes. Are you really getting what you want from this person or group’s approval?

Getting a balance between using money in ways that support your relationships and also your individual life goals is key to financial wellbeing.

If you are facing a dilemma around money in relationships, coaching can help.

Weddings, relationships and marriages - know the difference

I was at a meetup a couple of weeks ago with friends from a Facebook Group. I got chatting to one of the members who is planning on getting married this summer. We talked about a conversation that had taken place in the group between myself and a third member about the less romantic reasons to get married (or not): property rights and taxes.

You see people tend to mentally blend together weddings, marital relationships and the formal legal side of marriages. The truth is these are different and separate things and any given couple can have one, two or three of them in any combination.

I’m leaving out the religious aspect of weddings/marriages/relationships on purpose here. As a non-believer I am not qualified to discuss it and I don’t want to cause offence by misrepresenting people’s beliefs.

OK, that said, let’s talk about the three elements.

Weddings

A wedding is a ceremony and usually a party. It usually includes the necessary paperwork and promises to create a legally binding marriage as well, but it doesn’t have to do so. A wedding is usually a joyous celebration of love, with family and friends and, ideally, music, embarrassing speeches and far too much food.

Relationships

A relationship is about how two people get along. This includes many formal and informal ways in which you might make financial decisions together, but it isn’t fundamentally about money and property, it’s about how you are together. How do you communicate? How do you feel about each other? What do you do for each other? What part do you play in each others’ lives?

Marriages

Then there’s the legal marriage, the most neglected part of the equation. This is the part people often only start paying attention to if things go wrong and they start talking about divorce. I would strongly advise learning about this before you get married instead.

There’s a lot of dismissive talk about marriage being “just a piece of paper”. The deeds to a house are just a piece of paper too. So is an employment contract. So for that matter is a peace treaty or the constitution of a country. N.B. Common Law Marriage is not a real thing in the UK. It doesn’t matter how long you live with your partner, you aren’t married unless there’s a marriage certificate. Don’t be fooled.

Marriage has important but often hidden implications for your finances. I’m going to talk about just three examples from the UK (there are many). The effects are at least as profound elsewhere.

The Marriage Allowance

The Marriage Allowance means a non-working (or low income) spouse can transfer a proportion of their tax allowance to their higher income husband/wife.

Inheritance Tax

If you own substantial assets you want to leave to your partner, getting married protects them from potentially having to pay Inheritance Tax on those assets. Home owners take note.

Wills

Getting married instantly invalidates any will either of you had before you were married and if you don’t make a new one, the rules of intestacy apply and your spouse automatically gets the lions share (potentially everything) that you leave behind.

How unromantic!

I understand that some people will think this is a cold and impersonal take on marriage. It can be uncomfortable to take a peek beyond the white lace and petals into the cost-benefit calculations underneath. I am certainly not advocating taking a mercenary approach to intimate partnerships. (My own wedding was a joyous day and I am extremely smug and soppy about my wonderful husband.) I do however, advocate understanding what you’re getting into when you sign the register and say “I do.” We did, and you should too.