Avoid the shame & blame of bad decisions

Blaming each other for financial mistakes is not productive. Instead, create a plan for preventing future regrets.

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About 10 years ago, my wife and I were driving around Park City during one of our annual summer trips to Utah. We knew that at some point we wanted to live there, so we were excited when we discovered a new housing development. Only a handful of lots had been sold, and the developer offered us a great discount off an already low price in an attempt to reel us in.

We made our offer and started the due diligence to complete the purchase. As we went through the process, however, we realized we really couldn’t afford to buy the lot. It was a great opportunity, but the numbers just didn’t work out for us.

Seven years later we did move to Park City and found that the same lot had changed hands a few times and was for sale yet again. It was one of the few remaining lots in the development (I still remember the lot number, 24). But the price was now five times the original price. How could we have let the opportunity slip by?

It didn’t help that a park we often visited for our children’s athletic events was right by the lot, so we revisited our “mistake” frequently. For a long time, whenever it came up in conversation, our discussion was shrouded in shame. There were even times when we blamed each other for the decision, at least until we were able to remind ourselves that we made the correct decision at the time, and that’s what mattered.

During this process, we also learned a lot about how to have better money conversations with each other. One of the biggest agreements we made was this: Shame and blame aren’t very helpful.

As result, I’ve developed the “No Shame, No Blame Rule.” The idea behind the rule is pretty obvious, and it applies to personal and business relationships. When we talk about money, we make the commitment to avoid blaming each other for past decisions, and we’re not going to feel shame for them either.

It’s a lot harder than it sounds. So here are a few tips for implementing the rule.

1. Remember the past is history. History is there for us to learn from, not to use as a weapon against each other. We want to draw the lessons out of history, learning from them to help us make better decisions now and in the future.

2. Schedule conversations. Sure, spontaneous conversations about money can offer some amazing benefits. But we need to be aware of the subject and the timing. We don’t want to ambush each other. No one reacts well after walking in the door and then immediately getting presented with a credit card bill followed by angry questions.

Pick a time when both people will have the energy for a thoughtful discussion. For instance, late at night when both spouses are tired isn’t a good idea. Ditto a difficult phone call with a sibling over an aging parent’s long-term-care bills. If the conversation starts to feel too negative, set it aside until tempers cool. If we avoid going negative, we can accomplish a lot more.

3. Pick a neutral location. The bedroom may not be the best place to have money conversations. Go to a coffee shop, the library or grab a bench in the park. It puts a much-needed buffer zone between these conversations and our everyday routines.

4. Wear No Shame, No Blame hats. Yes, it’s a silly suggestion, but it’s beneficial to do something that reminds us of the goal we’re trying to accomplish. You don’t have to wear an actual hat, but sending some sort of signal can help both people remember the rules.

My wife and I still drive by that lot, but we rarely talk about it anymore. By taking the shame and blame out of our conversation, we made it possible to focus on what we’ve done right. We still know we made the best possible decision at the time.

It will take time and practice, but the No Shame, No Blame rule makes talking about money easier. It also increases the odds that we’ll actually have conversations about money in the first place, instead of just continuing to avoid subjects that make us feel bad.

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This article was written by Carl Richards from The New York Times and was licensed as an article reprint. Article copyright January 26, 2015 by The New York Times.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third party provider of the reprint permission and Fidelity Investments are independent entities and not legally affiliated.
The images, graphs, tools, and videos are for illustrative purposes only.
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