How does your attitude about money affect your business and personal life? At work, people are seldom comfortable discussing financial issues with employees or co-workers. You implement procedures to acquire and protect assets, and expect your employees to legally agree to follow your rules. If customers, suppliers or employees attempt to cheat you or steal your assets, you should have a game plan to pursue recovery.


Your relationship with money can influence your business. You might choose not to pursue remedies such as liens and lawsuits because you are reluctant to damage your relationships. You may allow your company to be treated disrespectfully because you dislike confrontation or adjust your pricing because you are doing well and can afford to take a small hit to help out a loyal customer. Without awareness of these attitudes, your business decisions will be reactive instead of deliberate.


Just as our financial habits influence our business decisions, we often fail to apply good business practices to personal financial decisions, especially when family or friends are involved. Why not apply the same business strategies for managing cash flow and protecting assets in your personal life?


If you live alone, this can be easy, unless you are the go-to person for family and friends with money problems. If you share a home with a roommate, significant other, spouse or children, you may be reluctant to discuss financial issues. While we freely share intimate details of our preferences in other aspects of our lives, we retreat from discussions of money. It is often easier to consult financial or legal advisers than the people closest to us.


A USA Today/CNN/Gallup poll found that almost two-thirds of couples never talked about money before their weddings. They discuss where they want to live, whether to have children or pets, and their dream vacations, but not whether to open joint bank accounts or how to save for retirement. The same poll revealed that the most common cause of marital discord was spending too much and saving too little. More communication would ease the discomfort and could prevent the destruction of many relationships.


Talking about money often leads to finger-pointing, unpleasant surprises about discovering financial beliefs and levels of risk tolerance, and sometimes anxiety about appearing unsophisticated in front of the person who matters most. It’s important to establish a regular time to discuss finances and set the rules. First, treat the discussion like a business meeting and outline the facts. Second, don’t judge while you compare philosophies; find a middle ground. Finally, set goals and agree on action items. Most important, have your first conference before you decide to share living quarters with anyone else.


Is it possible to apply a business approach to personal financial decisions? Only if you agree that friendship, partnership and love do not require the complete abandonment of rational thinking. Forming business partnerships is particularly risky when they are built on trust and assumptions about each partner’s ethics and financial attitudes, instead of carefully structured contracts and formalized processes. To prevent money from ruining a personal partnership—friendship, marriage, family or cohabitation with a stranger—there must be a legal structure that similarly defines expectations and formalizes the agreements that protect each person’s interests.


So why is there so much resistance to legal documents such as prenuptial agreements or repayment contracts for interpersonal loans? Because at least one person involved believes that love will last forever or friendship should be sufficient collateral. Despite anecdotal evidence and lawsuits on record as evidence of failed relationships and obligations unpaid, it seems cold-hearted to plan for worst-case situations. What about when one person develops an addiction, a secret relationship or simply abandons the home and cleans out the checking account? If this happened in your business, you would feel like a fool. So, how will you protect your assets and ensure your own future security in your personal life?


Historically, people formed marriage contracts that were little more than business deals and/or political alliances. There were different cultural expectations of the level of security, protection and emotional fulfillment to be provided by each family member. Trust and happiness were not guaranteed. While many people today seek love and happiness in personal relationships, it is still wise to seek protection from the unexpected events that capsize financial security.


You build a strong company by making business decisions based on financial goals and strategies, not on whether people like you. Trust and loyalty are backed by legal contracts, procedures and structures that protect your assets. Although your personal relationships may depend on how likable or lovable you are, you need not apologize for similarly ensuring the security of your personal assets against the unpredictable actions of your family and friends.