If you’re just joining us in this series, I attended Franklin Covey’s 7 Habits of Highly Effective People and I’m in the process of translating that as it applies to finances. If you’ve missed any of the previous posts, I encourage you to go back and read them. These habits are easy enough to work on individually, but together they can have an incredible impact over your financial success.

Habit # 4 – Think Win-Win or The Habit of Mutual Benefit

You don’t have to blow out the other person’s light to let your own shine.

- Bernard M. Baruch

In this habit we talk about two paradigms: the paradigm of scarcity and the paradigm of abundance.

The paradigm of scarcity says that there is only so much. The more someone else gets, the less you have for yourself. This ineffective paradigm gives us the mindset that our wants and needs are above all others because it must always be about taking care of ourselves.

The paradigm of abundances says that there is plenty out there for everyone, and more to spare. It is at this point that we realize by seeking mutual benefit we can obtain better solutions to problems and enrich our relationships.

In the seminar, this particular habit was applied to our relationships in life, whether they be personal or work-related. Within the context of our finances, I think this applies to those who have spouses or significant others. One of the primary reasons for divorce these days is money, so it makes sense to find ways to improve the communication and relationship as it pertains to finances.

Before we get into that, let’s take a look at the six paradigms of human interaction. You’ll recognize all of these in your own daily interactions, whether with your spouse or with a co-worker, but the point is to give you a frame of reference when we start discussing the actual habit of mutual benefit.

Paradigms of Human Interaction

1. Win-Win: “Let’s find a solution that works for both of us.”

People who fall into this paradigm find ways to win while simultaneously making sure others are happy and satisfied.

Financially speaking, this paradigm finds most couples on the same page about their finances, and keeps them communicating and finding solutions to problems. Win-Win goes beyond just compromising. In a compromise, someone loses or gives something up. In a win-win, both parties get what they want. So, this would be the couple that saves money and takes that family vacation. It won’t be easy, but by working together the couple can find a way.

2. Win-Lose: “I’m going to beat you no matter what.”

People who choose this paradigm are only concerned with themselves. They want to win at all costs while everyone else must lose. Their success is very often at the expense of someone else, and they are driven by competition, position, and power.

The win-lose paradigm basically has one partner doing what they please and may even actively be seeking to make the other partner lose – be it consciously or subconsciously. You can often find this paradigm in relationships where the husband is threatened by how much the wife makes. So, in order to sabotage that, he may be reluctant to help out around the house or he expects the wife will always be the one to stay home with the kids when they’re sick. He takes no initiative to help her out.

3. Lose-Win: “I always get stepped on.”

Within this paradigm, people CHOOSE to lose – remember, we are a product of our choices. Often these people choose to lose and let others win as their way of showing high consideration for the feelings of others; however, they usually lack the courage to express and act on their feelings and beliefs. The are pretty easily intimidated.

Here we have a dominant partner and a partner who agrees just to avoid conflict. Let’s say a husband and wife are struggling financially, but the wife continues to spend money despite their situation. Afraid to rock the boat any further, the husband allows the spending to continue and simply seeks other ways to fund the expenditures. Here, clearly the wife is more concerned with her own desires than what is good for the both of them.

4. Lose-Lose: “If I’m going down, you’re going down with me.”

People who have a lose-lose paradigm are low on courage and consideration for others. They envy the power and position of others, and criticize them for their success. They will put themselves and others down.

If one person’s spending habits are out of control and cause a bankruptcy for both partners, this is a lose-lose. In fact, either win-lose or lose-win can easily lead to this situation if left unchecked. The point is, one person’s poor financial choices will take the other down. In most cases, the offending party doesn’t seem to care that the other will suffer as a result of their decisions.

5. Win: “As long as I win, I don’t care if you win or lose.”

This paradigm causes people to think only of winning and getting what they want. Although they don’t actively seek to see other people lose, they are bent on winning, and tend to think independently in group situations to achieve that end.

This one is really just one partner doing whatever they want and not really caring one way or the other about their partner’s activities. I’ve found this paradigm to be prevalent in couples who have separate accounts. Because they each have their own things to worry about, they don’t really care what the other does so long as it doesn’t affect their success. Now, I’m not suggesting that this means all couples need joint accounts, but there still needs to be communication and unity regardless of how your operate your finances within the relationship.

6. Win-Win or No Deal: “Let’s find a solution that works for both of us, or let’s not play.”

This paradigm is the highest form of win-win. People within this frame of mind seek first and foremost to find a win-win situation. If one cannot be found, then they agree to disagree amicably.

Here both couples take the high road and say that if they can’t make it work out where they both get what they want, then they scrap it altogether. So, let’s say that a couple decides they want to take a vacation, but one couple stipulates that they must pay off X amount of dollars before leaving and the other stipulates that X amount of dollars must be saved. They set a date for their goals to be reached and one of two things will happen. Either they’ve reached their goals and they take that vacation, or one or both goals have fallen short and the couple agrees that they can no longer take the vacation. It’s either win-win or there’s no deal.

Alright, so what’s the point of talking about these different points of view? Well, let’s look at the relationships spouses and significant others face when they deal with money. To give you an example of what I’m talking about, I’ll use my friends – Amanda and Edward. If you read my post on questions to ask BEFORE getting married, you may remember these guys.

So, this is how the finances go in their household. Edward and Amanda both work full-time jobs and both have their checks direct deposited to the account. They have a house, two cars, and credit card bills that have all somewhat overextended them. They’re making it on his overtime – not guaranteed – and the fact that their credit is good enough for the 0% offers, so they do a lot of debt shuffling.

Amanda is in charge of the finances. She balances the book, pays the bills, and doles out money when and where she sees fit. Edward doesn’t really ask for a whole lot in the way of money. He likes to make sure he has beer every weekend, but beyond that, he’s fairly content. Well, somewhere over the years, Amanda decided that having a big screen TV, brand new washer and dryer, and other material things (plus their bills) were more important than Edward getting his beer every weekend.

Amanda says that she’d be ok if he only drank one or two, but he tends to go through an entire 12-pack over the weekend and his habit is just too expensive. It has become the cornerstone of their fights because, as he sees it, he’s working hard and deserves to have a little money to spend how he wants. She sees it as they have a life they’re building and these “other things” take precedence. It’s a small issue, but one that could seriously hinder the relationship if not worked out.

My opinion is that Amanda has an overall issue with Edward’s drinking that has nothing to do with money, but she doesn’t come right out and say that. Instead, she blames it on their lack of money – which only causes him to work more overtime and that fuels even more fights as she spends whatever he brings in for their “household” stuff. Instead of asking his opinion, she’s content to believe that he wants the same things as her. Instead of standing up for himself and demanding his allowance of his salary, he takes it and resorts to being crabby most of the time. He’s simply overworked with nothing to show for it.

So, based on the paradigms of human interaction we discussed, Amanda’s paradigm would be “win” and Edward’s would be “lose-win.” Amanda isn’t seeking to make Edward fail financially, but she is set on winning – or getting her way. Edward, on the other hand, lacks conviction when it comes to standing up for himself in this matter. Perhaps he believes that caving in is the path of least resistance, but I wonder how long he’ll be able to continue down this path before it becomes unbearable.

In light of these paradigms of human interaction, there are two things that we need to have and balance in order to be effective with this habit. One is courage, and the other is consideration. Courage, in this instance, is the ability for someone to speak their thoughts and feelings. Consideration is the willingness of someone to seek and listen to others’ thoughts and feelings with respect.

By finding a balance between these two things, couples are able to work towards win-win situations with their finances. Finding a way for both parties to win leads to more effective solutions to problems and sets the path to financial success.

Recap

Habit 4 – Think Win-Win or The Habit of Mutual Benefit is about couples working together to find solutions that benefit both parties. This isn’t just about compromising. A compromise will only get you so far. Eventually, you both tire of having to give something up in order to let the other person win a little. By thinking of creative solutions that allow each partner to win equally, couples can enrich their relationships and work towards solid financial success.

This habit asks couples to consider their paradigms in dealing with others, particularly their partners. There are six common paradigms of human interaction: win-win, win-lose, lose-win, lose-lose, win, and win-win or no deal. By examining which paradigm you fall in, you can identify if your responses need to be worked on. Those falling outside of the win-win situations may need to consider what other approaches can make their relationships and finances more successful.

Finally, the habit of mutual benefit says that we need to find an equal balance of courage and consideration. We need to be willing to speak our thoughts and feelings, while at the same time be willing to seek out and listen to other people’s thoughts and feelings with respect.

I’ve already mentioned that money is a major reason for the divorce rate, at least in the U.S. By taking the time to find a win-win for your situation, you exponentially decrease your chances of divorce and increase your chances for financial success. In the case of my friends, they need to find a way to allow Amanda to buy the things she wants for the house and still allow Edward to buy his beer every weekend. The obvious solution, at least to me, is to take the cost of his case and subtract that from what she’s spending on household items. I think the beer he buys is roughly $13 for a 12-pack, so really she can spare that from their “household” money. Likewise, Edward needs to agree to make that 12-pack last longer than he normally does. Perhaps instead of drinking all 12 in one weekend, he can break it up over two weekends. Both parties still get what they want.

If you’re in a relationship that is struggling to find the win-win situations, then you may want to sit back and brainstorm with your partner on the things you want and how you want to get there. Talking it out and working together is half the battle.

Alright couples, which of the six paradigms do you typically find yourself in? Do you think working towards win-win situations can help improve your financial success?

Related posts:

1. The Seven Habits to Financial Success – Part I
2. 7 Habits to Financial Success… Part VII
3. 7 Habits of Financial Success…Part VI
4. 7 Habits to Financial Success – Part V
5. The Seven Habits to Financial Success – Part III