Dr Boyce Money: Love Investments Matter More than Money

When I came up with the concept for Financial Lovemaking, I became an intense student of life: I would notice how we form our relationships, how we choose to manage them, mistakes we'd make along the way, and how we would fix those mistakes after the damage has been done. I also learned that most of our greatest investments in life are not financial. Typically, these are investments of love, time, energy, health, happiness, etc. What is saddest is that many of us spend our lives chasing superficial things, which causes us to destroy the most valuable components of our "life portfolio." The "life portfolio" is the set of valuable commodities which define our quality of life - love, happiness, health, relationships, etc. What's interesting about this life portfolio is that many concepts from investment and portfolio theory can be applied to how we manage our relationships: male/female relationships, relationships with children, friendships, etc.

Have you ever thought about your own life and the bad relationship choices you've made? Did you realize that, in many of these cases, you may have invested your heart carelessly, without thinking things through? How many times has one tiny perturbation made all the difference in the world? Have you ever passed on dating someone because they were a little shorter than you prefer, or because they said the wrong thing? Does it even make sense that a major component of our life path can be altered by such tiny incidents?

I can tell a story from college to give you an example.

I knew two women from my undergraduate institution who both married their college boyfriends. They were best friends, and I was very good friends with both of them. One of the women was the "prettier" girl, and truth be told, she had the option of dating her friend's boyfriend if she'd chosen to do so. But she passed him up because she thought that "his shoes were too dirty" when she met him. A man who was not well-dressed was a pet peeve for her, and this man was clearly not in her preference set.

The man she chose was not necesarily better looking than the first. But he did have clean shoes and a great outfit. That opened the door and he walked right in. Both women ended up dating their respective men, with each of them marrying the men and having 2 - 3 children. However, their stories did not end the same.

The "prettier" girl did not have a good marriage. Her husband cheated on her, ruined the family finances, and eventually left her with no child support for the children. The second friend had a marriage which seemed to turn out quite nicely: her children are well-adjusted, her marriage has endured and her husband is quite successful. Based on their own assessments, the man with dirty shoes would now be the better choice.

10 Questions To Ask Before Planning A Wedding

How do I set a wedding budget?
The very first thing you and your fiancé need to do is figure out how much money you will realistically have to spend on your nuptials and the celebration that follows. Keep in mind, the bride's family is no longer expected to be the primary wedding sponsor; it's common now for both families to offer assistance. But the reality is, most couples pay for their own wedding. Once you've established a dollar amount (remember a gorgeous wedding can happen at any budget), there are a number of popular websites like theknot.com and marthastewartweddings.com that you can use to complete a thorough and organized budget.

Tetra/Getty Images

Should you have "My Big _____ Wedding?
In our community , weddings are often huge, oversized events. But one of the biggest ways to impact your budget is by limiting the size of your guest list. There are some tough questions that have to be answered when it comes to guest list .For example, will children be allowed at the reception? Long before you decide to host a 400-person extravaganza/family reunion, you and your fiancé should each create lists of potential guests and organize them into: "People you wouldn't get married without; " "People it would be really nice to have ," and "People you can take or leave ." If or when you have to trim your list, it'll be easier to know where to start.

Large wedding party: to have or to...?"
HOLD. The days of really large bridal parties are fading. Of course, your bridal party should represent your idea of perfect, but smaller bridal parties of two to three attendants will save you a significant amount of money in transportation and flowers, and on bridal party gifts. One solution for the people that you MUST include in the wedding that aren't your BEST friends, is to consider asking them to be hostesses/ushers or to read a significant poem or scripture during your ceremony. You might be surprised how happy "the un-chosen ones" are that they can actually be a guest at the wedding without a long list of responsibilities and financial obligations.

What is my wedding style, and do I need a theme?
Your wedding style sets the tone for your entire event , and your theme is the way you'll showcase it throughout. To figure out your wedding style, ask yourself if you are traditional, unconventional or somewhere in between. If you're traditional, you may want a church wedding with a formal dinner reception. Your theme might be a "Winter Wonderland" in a gorgeous hall draped with crystals and viburnum. It's up to you! If you do opt for a wedding theme (they aren't mandatory), this is where you and your fiancé can really express yourselves as a couple by transforming your shared experiences into one theme.

When and where?
Once you have your wedding style and theme in place , you have to find a complimentary venue. If you're opting for a church wedding and you have a specific church in mind, their availability will determine your wedding date. Flexibility is key if you would like a wide range of venue choices. Some sites will give you a reduced rate for booking your event on a Friday evening, Saturday morning (or early afternoon) or Sunday. You can also save 20 to 30 percent by booking your reception during the off-peak months of January-April. Look for venues that include parking, vendor discounts and other perks.

Which decor elements really make a difference?
Expensive and plentiful floral arrangements may be synonymous with beautiful weddings , but if you have a limited décor budget you have to decide where your priorities lie. Lighting can make a huge difference and doesn't have to cost a lot. Check with your DJ or venue about inexpensive lighting packages. Candle light counts! You can find candle wholesalers all over the web. Also, explore your theme -- maybe you can use a minimal amount of flowers and display some beautiful items found at thrift stores as your centerpiece. Be sure to display your wedding cake as a piece of décor.

What should we serve?
Your food and beverage costs can account for 60% or more of your total budget. This is one area where research and negotiation is extremely important. Selecting menu items that are in season will have a favorable impact on the final cost of your meal-and the taste. Although it's commonly believed that buffet meals are less expensive, that's not always the case. A plated meal with a duet of entrees may end up being more economical and pleasing. Stations are fun and can provide a welcomed variety for your guests. However, the costs can add up once you factor in the quantity of food you'll need to satisfy guests and the cost of chefs and service staff.

What to wear?
Have you already found the dress of your dreams? Many brides begin tearing out pictures of dresses they love the day after their engagement (or secretly sooner). That's not a bad idea, as time is of the essence. Regardless of where you end up buying your gown, if it's new, you should allow at least 12 weeks delivery time to be safe. If you plan accordingly, you can snag a great deal by finding your designer dream dress at local bridal sample sales, trunk shows or events like Filene's infamous Running of the Brides. Another option is a shop like RK Bridal, a New York-based store that ships around the world and guarantees a low price.

What is the top wedding trend right now?
Going Green is one of the biggest wedding trends right now! Weddings of any budget can go entirely green or have environmentally sound ideas incorporated into any facet of the planning. There are green venues that serve only local, organic or sustainable food, invitations printed on recycled paper with natural inks, organic gowns and suits, locally grown flowers, soy candles, etc. There's really no reason why you can't share some love with planet!

Getty Images

We're spending a lot of money. How do we insure that everything goes as planned?
Hire a wedding consultant to execute your wedding day plans. Can you and your cousin do it? Maybe, but do you really want to? You, your family and close friends should all be able to cherish the moment, relax, eat drink and be merry. Most "day of" wedding consultant/planners will confirm and manage vendors, create schedules, run your rehearsal and your wedding day. You'll convey all the details to them and they'll make sure everything is done to your specifications. When looking for a consultant, start with referrals from friends and family. Next, organizations like the International Special Event Society are a great resource.

Getty Images

While some of us might conclude that the varied paths of my two friends was just a matter of dumb luck, a deeper investigation revealed that luck may not have been the primary factor. I remained friends with both women through the years, so I (without pressing them too much) asked them what led to their original choices. The "pretty" girl told me about the shoes, and the smooth talk of her ex-husband and how he made her feel good. She also mentioned that after meeting him on Tuesday, she was dating him on Wednesday and sleeping with him by the end of the week. By then, she was hooked.

The second woman told me that she also didn't like the way the man with dirty shoes was dressed when she met him. But she took her time getting to know him. She evaluated him based on the kind of person he was, whether he was responsible, intelligent and considerate. She didn't start dating him until 3 weeks after getting to know him and determining that he could become a suitable mate. In other words, before investing her valuable emotional capital, she took the time to study the man like a good company: She analyzed who he was as a person, what he was becoming, and weighed the dirty shoes against all the other things that mattered in order to come to a more holistic decision. The same can be applied when evaluating a stock: If you are investing a large percentage of your portfolio into a company, a good investor takes several weeks to analyze the company's financial statements and doesn't make a snap decision. At the very least, one specific dimension of your analysis should ALMOST NEVER drive your entire decision. This is in sharp contrast to how many people choose their mates.

This is not to say that someone's style of dress shouldn't matter in your choice of a mate. It is also not to say that only women make snap judgments. Men can be equally intrigued by the color of a woman's eyes, the length of her hair, her physical shape or other surface qualities when making emotional investments. All of these factors play a role in our choices, and there are biological reasons that they do. But there are also long-term incentives which impact the outcomes of our investments of the heart, including loyalty, commitment, financial habits, and morality. These factors are sometimes left out of the fold when we are swayed by the more addictive and transient elements of our attraction to the opposite sex.

In financial theory, I teach students about constraints that we place on our investment choices. One thing about constraints is that they are costly, so we should always make sure that a given constraint is worth what we are giving up. The translation is that when we throw someone to the wayside because they are a little heavier than we would like, have funny-looking toes or mispronounce our name, we must always be sure we are prepared for the long-term consequences of invoking such powerful constraints on our emotional investments. Most of us know at least one person who whines about not being able to find a suitable mate, yet they turn down every available dating option for insignificant reasons. When investing our life portfolio, we must remember to keep the balance between what we want and what we need. The goal is to find true happiness.

Dr Boyce Watkins is a Finance Professor at Syracuse University and author of "Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good." To have Dr. Boyce commentary delivered directly to your email, please click here.

Categories

Contributors

Other BV Blogs