Money isn’t everything, but it plays a role in all important relationships. Here’s how to talk about it healthily.
It’s not easy to learn how to talk about money with your partner and other important people in your life. Talking about debts, spending habits, savings (or lack thereof), income, and other financial matters can seem vulnerable and frightening, and many couples avoid discussing the subject.
Financial intimacy is being able to be with yourself and your partner in good and bad times about money and finances, and being able to talk openly and candidly about all matters. financial. If you’re having trouble talking openly about finances with your partner, here are some tips for starting the conversation and continuing it in a healthy and productive way.
1. Start the conversation early in your relationship
It’s not necessary to ask for a person’s balance sheet on a first date, in fact, don’t, but you can start assessing your financial compatibility with someone early on.
A few months into the relationship, start talking about your own financial goals (retirement plans, home ownership, paying off debt) and ask him about his. Ask open-ended questions that allow you to talk about your attitude towards these issues rather than specific numbers. For example, you can ask the following question: “Are you planning or aiming to buy a house?” What do you think of what you have been able to save so far for your retirement? Even a general answer to this question will let you know if his financial goals and behavior match yours.
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Now is the time to start asking yourself if this person is comfortable with financial transparency. How are we going to manage the flow of money in our life? These questions are really important. No two people have exactly the same view of money. So it’s okay if you and your partner think differently on certain points. But major incompatibilities, perhaps one of you likes to spend while the other wants to live on a very limited budget and retire early, are a red flag.
2. And keep talking about it
In a healthy relationship, talking about money should be an ongoing conversation, especially when you both intend to one day share financial decisions or finances and financial transparency to each other should happen. increase. Talking about finances (honestly) can help you avoid this type of financial “cheating”. Before you start sharing your finances with someone else, which could mean opening a joint bank account, buying property together, or getting married, you need to be completely transparent about it. to each other financially.
You need to know each other’s total net worth. It’s not necessary to merge all the money, but you should have an overview of your partner’s debts, assets, and bank statements. If you disagree about finances, but plan to get married, consider entering into a prenup that spells out whether or not you will merge your money and how things will be divided in the event of a divorce. Do not take your partner by surprise by asking him for a marriage contract. Instead, have a conversation about why you want a contract and where you stand. Some people interpret prenups as a planned failure or a lack of trust, but in reality, they are a way to prevent people from feeling trapped.
3. Speak openly about your past experiences with money
Talking about a future budget and being on the same page, or being open to sharing certain numbers (like income, expenses, and retirement goals) are important parts of the conversation about money. But numbers and financial aspirations aren’t the whole conversation. It’s not just about the technicalities of what to do with the money, but also about both parties’ emotions about the money and how they feel talking about it. Everyone’s relationship with money is the result of all their experiences, not just their current situation.
Some people have been traumatized by not having had enough money to meet their needs when they were children, or by having had a lot of money and suddenly losing it. This can lead to a great fear of spending money and having enough. Other people grew up with complete financial security, which can make them more risk-tolerant and less stressed about finances in general. Share your story with each other and be open in all financial conversations about how this story may influence their feelings and decisions.
4. Plan Money Conversations Ahead
Whether you are planning a conversation about money with your partner, your parents, or someone else with whom you share financial responsibilities, for example, a roommate with whom you share expenses or a sibling with whom you share family money, it really pays to plan ahead. When financial pressures and problems are present, they can manifest as fear, avoidance, anger, embarrassment, and anxiety. Bringing up the subject on the fly, when someone is not expecting it, can increase anxiety and exacerbate anger and defensiveness.
Take the time needed in a private and quiet environment with minimal distractions, if you have small children it is best to find a time when they are not around so that the discussion goes the way it should. as harmonious and as relaxed as possible. You will both be more comfortable and the conversation will be more productive because both parties will have had time to think about it beforehand.
5. Talk to a financial advisor
If you disagree with your partner or other family members about money (and even if you do), it can be helpful to get an objective point of view. a third party.
Financial planning is mathematical. A financial advisor will assess your current situation and offer suggestions on what you need to do to achieve your financial goals.
Many people are intimidated by this step because they are afraid to change their financial habits, but it is better to have a plan for your financial future, and a mapped out path to achieve your goals, than to fly blind. Advice from a financial advisor gives you a common starting point, and you can then discuss together how you will implement the advice (or not).
6. Discuss how you will talk to your kids about money
Everyone’s relationship with money is shaped by their childhood, so don’t hesitate to broach the subject with your children.
A September 2020 study published in the journal Frontiers in Psychology found that early childhood consumer experiences, such as having a bank account as a child or learning to save for certain items, were associated to better financial well-being in adulthood. Conversations about sharing begin around age 3 or 4. You can include money in these conversations because money is something we share. Don’t talk about it like it’s the most important thing in the world, but don’t pretend it doesn’t exist either. If you have kids, one of the most important financial lessons you can teach them is that you can get what you want, but not instantly and not all the time. Giving pocket money or offering payment for certain chores or jobs can help children feel empowered to make their own money and make their own financial decisions.
Decide with your partner how you will approach these conversations.
7. Expect obstacles
The goal of financial intimacy is not to agree on all financial decisions, because that is practically impossible. Rather, it’s about learning how to manage financial decisions in a healthy and productive way that makes everyone feel heard. At each stage of life, you will find that you and your partner have different ideas about money. It’s not about solving a financial problem or making a financial decision, it’s about finding a way to make decisions and solve problems together.
Even if your financial values are similar, you will inevitably disagree on certain points. For example, one partner may view tuition at a private school as the best way to spend money on their children, while the other may view it as more important to expose their children to different cultures by traveling regularly. Respecting each other’s point of view and being willing to compromise (which sometimes means getting in the middle and sometimes letting one partner get what they want in one area while the other gets what he wants somewhere else), you are less likely to feel resentment towards each other. Learning to manage money together will benefit your relationship and you as an individual for decades.