Love And Money -- And Fighting

Love and money. Can they mix in marriage?

Harvard professor Elizabeth Warren says they can, and offers practical advice on handling money in marriages on Wednesday in the second of a two-part appearance on The Early Show.

The co-author of "All Your Worth: The Ultimate Lifetime Money Plan" acknowledges that money is cited as the No. 1 issue coming between married couples, and the leading cause of divorce. But Warren says it doesn't have to be that way.

On Tuesday, Warren suggested ways to keep your financial house in order, starting with dividing your budget among "must-haves," savings and wants.

Wednesday, she gives her thoughts on why money is such a hot-button marriage issue, and on minimizing its power as a provoker.

Warren says money is a big issue because it involves buying and not buying, spending and not spending: "It's ten thousand decisions a day. When you go to the grocery store, you make a minimum of 500 decisions. You decide what to buy, what not to buy, what size, what brand. And when you live with someone else, you have to deal with what they would have bought or not bought.

"Sometimes, it's really easier to fight about money rather than fight about something else. Money is just the tool for the fight. Money can produce friction. Or, friction in a relationship can cause a fight over money."

Warren's No. 1 method for couples to deal with money is to make sure each person has his or her own "fun" money. She says, "You can solve a lot of problems when everyone has their own fun money. Some for him and some for her. It creates personal space. No questions asked. No feeling embarrassed about it. You get to do with it whatever you want. I think when you have a little personal space, it make it a lot easier to smile at the other person."

Warren has three rules and eight Golden Rules for couples to handle money.

Her three rules:

CHANGE WHAT YOU CAN

Warren says sometimes you just have to accept the other person. Some things aren't going to change. But you can work within that: "Make it easy for him or her to say 'yes.' Pick one issue. Say, 'I decided to re-shop the insurance and I got three quotes for new insurance. We can save $150. What do you think?' You are both in the same economic boat. One can't be rich and the other poor. Even one person in the relationship working on the finances can make them better. And making it better happens in lots of small decisions. If you have a goal and know where you're going, you can bring the other person along."

NO NAGGING

You can't nag someone into better spending, or better anything, Warren points out. That just makes them angry with you. You just need to agree on the basics. How much is his? How much is hers? Having fun money takes away some of the nagging. And nagging can take on a life of it's own. Too many couples nag around money and it causes a lot of internal anxieties."

STICK TO THE SUBJECT

Couples can be mad about one thing, and somehow, money sometimes gets into the argument. Warren advises sticking to one topic. Are you mad at the money your husband spends when he goes out and has beer with the guys? Or are you really mad about the fact that he's going out drinking with the boys? Understand what you're fighting about, and don't use money as the issue when it's not.

Among Warren's "Golden Rules Of Money":

WHAT'S MINE IS OURS

Warren says you need to understand that when you get married, the law is serious about "for richer or poorer" and "plight your troth." When you walk down the aisle, what's mine is ours and what's yours is ours, and that includes debts and savings. In the eyes of the law, you are one financially. It's OK if one person takes care of the household bills and the other pays the big-ticket items. How you handle the finances is highly personal. But to the outside world, you will be seen as one.

BE TRUTHFUL, AND MAKE IT EASY TO BE TRUTHFUL

Being truthful is essential in a relationship. Sometimes, Warren points out, it's embarrassing for one partner to admit to the other about credit card debt, and that partner carries guilt and shame. It's important for couples to be honest and open with each other about money matters. And, when one partner is truthful, the other needs to listen sympathetically and not be on the attack.

DON'T PLAY THE BLAME GAME

Decisions you made together need to be accepted by both of you. When the baby comes, if the mom stays home for a while, there can't be finger-pointing later about money difficulties. If finances become difficult, you can always revisit a money decision. But you can't live with shoulds and shouldn'ts.

"All Your Worth" is published by the Free Press, which is owned by Viacom, the same company that owns CBSNews.com.

To read an excerpt of "All Your Worth: The Ultimate Lifetime Money Plan," click here.