Not many couples share managing family budget

Catharine Heddle and Terry Lee, married for four years, think of themselves as pretty careful spenders. They bought a newly built house in Scarborough, not in a more trendy Toronto neighbourhood ( Bloor West Village) where many of their friends live.

“ We wanted a house where we could afford to live on one income,” Heddle says. “ By going a little further from downtown, we could get more for our money.” They recently traded in their Jetta for a new Toyota Sienna minivan, worth $35,000, for which they paid cash.

Lee, 42, is a risk manager with a major bank. He doesn’t believe in using credit to buy a depreciating asset, such as a car.

Heddle, 35, works in public relations. She’s now on a one- year maternity leave, looking after a newborn, Simon, and a 2- yearold, Colin.

Besides watching pennies, the couple tries to share the household money management. They use a joint bank account to pay most bills.

Both contribute to registered retirement savings plans and a registered education savings plan for the two boys.

But when it comes to investing, the spouses go their own ways. Each has an account with a different discount broker. They compare notes about their investments, however, so they don’t get overweighted in any particular area.

Heddle says her parents made her understand the value of money and the need to save 10 per cent of what she earned.

“ They taught me that money is independence. It lets you walk away from difficult situations. I hope to communicate that to my kids.”

Are Heddle and Lee typical of how Canadians manage their money? Not according to an August survey of 1,000 adults by Environics Research Group, sponsored by MasterCard Canada. The results ( detailed in the fact box above right) show that many couples aren’t working together. One spouse does all the money management in 65 per cent of the households surveyed.

Partners need to maintain some financial independence, but family finances should be shared and discussed, says Laurie Campbell, a spokeswoman for Credit Counselling Canada.

“ If one person manages all the finances, there’s a danger that the family is not communicating properly about money and is not working toward common financial goals.

“ This can lead to misunderstandings and financial problems.” She believes all children should get allowances to learn about handling money. And parents should start talking to kids about money from the age they’re first exposed to it ( around age 5). Heddle and Lee are already training the 2- year- old, who has a collection of quarters in a jar.

“ We tell him that 25 cents can buy a lollipop or a banana,” Heddle says.

She’s not sure these early lessons will sink in, but feels compelled to try anyway. MasterCard Canada has teamed up with Credit Counselling Canada to promote a reality check for family finances.

You’ll find a quiz designed to assess your financial management style and a family money guide at www.mastercard.com/cana da/ education. The information is very basic: Set goals, make a plan, develop a spending diary, create a budget and stick to it, pay your bills on time, use credit wisely and save.

It seems like stuff everyone already knows. But people don’t practise what they preach, says MasterCard, pointing to Canada’s negative savings rate.

Ipsos- Reid, another market research firm, monitors family finances for major banks. It gathers information from an annual sample of 12,000 households. A recent survey looked at how men and women differ in their financial decision- making.

“ Men report a higher level of confidence about their level of financial knowledge and say they enjoy taking care of their finances more than women do,” an IpsosReid summary says.

“ The data suggest that women respondents are less confident about their financial situation, less comfortable carrying debt, but are more likely to be impulsive spenders than men are.”

While women like dealing with one financial institution, men are more price- conscious and enjoy negotiating with several financial institutions.

However, men often have too much confidence in their investing skills and unrealistic expectations about their investments.

This new research on household spending habits can help financial institutions tailor their marketing campaigns.

It also gives families comparative information against which they can measure their own behaviour. Ellen Roseman’s column appears Wednesday, Saturday and Sunday. You can reach her by writing Business c/ o Toronto Star, 1 Yonge St., Toronto M5E 1E6; by phone at 416945-8687; by fax at 416-865-3630; or at erosema@thestar.ca by email.