This time of the year is especially tough on agreeing where to spend the holiday, how much to spend, who to have dinner with, and the list goes on. While events such as holidays and pandemics are stressful if we’re honest, money is as emotional and complex! It impacts nearly every aspect of our lives and our relationships with our significant other. Unfortunately, money is a taboo topic in our culture with miscommunications creating small cracks in our relationships. While a small crack can expand over time it’s also true they can be repaired simply when they’re corrected early.
When I’m looking at the finances of a couple, it’s important to remember we’re in a partnership. Like most people, we have different backgrounds, experiences, goals, and values when it comes to money. The first step a couple partnering their finances should take is to come together with an understanding of the basic financial status of each person.
Personal finance is just that, personal. When we’re having conversations about money, they can be extremely intimate and bring up emotions of shame, defensiveness, guilt, and even anger. You want to create an environment that is safe, private, positive, and most of all judgement-free. This is also not just one conversation but should be several and ongoing. Make it a weekly money date! Set a timer and spend only 30 minutes discussing 1 topic, such as food expenses and meal planning. Then spend the next 30 minutes comparing each others weekly schedule, choose next weeks topic, and set a date night. The following week, do the same thing but perhaps the topic is investments.
So let’s get to the questions! The following are 5 topics couples should agree upon financially.
It’s not uncommon for one person to view money through the lens of power and control. Perhaps they are a detailed planner and desires to maximize each penny. While another may believe money enhances their experiences and relationships. It’s a means to see more of the world and do more. Both are healthy outlooks and in this situation, one may view the others’ financial behavior as controlling and the other partner views their behavior as wasteful. If we only see our partner’s behaviors through our frame, it can create an unbalanced outlook which can lead to those small cracks forming. It’s important to discuss openly, compromise, and establish your joint values and priorities are.
Goal setting is important individually, but it’s even more important as a family to ensure you’re both working in the same direction. Your goals should be specific, written and shared. An unwritten goal is simply a wish. Can you think of any successful teams, businesses or organizations that don’t have specific written goals? This is a great topic for your weekly money meeting. I have some fairly specific goals I want to accomplish. Since I’m such a visual person I spent a weekend working on my Vision Board along with a list of positive affirmations. My vision board hangs above my desk where I see it on a daily basis. It helps for us to be reminded where we want to go short, medium, and long term.
One of the largest contributors preventing people from building wealth is the misuse of credit. Debt is essentially borrowing against future income. Living paycheck to paycheck creates ever-present stress because financially you’re just treading above water, knowing that one uncontrollable hiccup could cause a downward spiral. Working hard just to pay off debt and not being able to take advantage of opportunities in the present or save for the future puts a serious strain on everyone and the relationship. It may not be your most favorite topic but when you’re tackling this together I have seen some amazing things happen between couples.
Do you know the saying, $%*? happens! The question is not whether it will happen, but rather when and are you prepared. Having an emergency fund in place is vital for everyone to have, but that’s just a first step. Once you’re in a committed relationship and are partnering your finances, you need to discuss how to handle a situation in which one or both of you are suddenly unemployed, weather damage to your home, medical, and more. My recommendation is to have a minimum of 6 months of expenses saved in a high-yield savings account. If you can save more than 6 months, even better.
So you’ve discussed your values, set some goals, managed debt, and planned for emergencies, now let’s talk about wealth building. To work simply means we are exchanging our time and skills for money. At some point, you may decide to start your own business or travel with your partner. We can call it retirement or financial freedom, the goal for most of us is to have enough resources so we have control over our time and talent. The best way to do that, plan, save, and invest as early as possible. If you can only save $25 per month, start there. Remember, compound interest is your friend and it will add up quickly.
Discussing finances together can be a tough road to travel. There are potholes, detours, roadblocks, speed bumps, accidents, and traffic. However, when you can agree on where you’re going, how to manage challenges, and which routes to take, it’s much more likely both you will get there, together.
I have a checklist of items for your money date and would love to send it to you at no cost. You can email or text me and I’ll send it over. It’s a simple list of topics and things to be sure is up to date, especially if you’re newly married. Let’s get you both on the same page….together!!