Three things every couple must know to get on the same financial page.
It is easier to talk about sex than it is about money! If you don’t believe me think about the last social gathering you were at. What was the topic of conversation? Sport? The economy? Donald Trump? The price of petrol?
I bet you didn’t ask your host how much they owe on their credit card or when admiring their new car did you ask, “love the new car, by the way, how much did you borrow to buy it?”
It isn’t just our friends we find it difficult to talk to money with, but it is also our nearest and dearest, the one we love the most, the one that we have chosen to spend our life with and raise a family.
So, if you can’t communicate about money (by the way, yelling is not communicating) , how on earth are you going to plan your finances together and make them work for the long term?
Before you even get to talking about building your financial future together, here are three things you need to be prepared to do.
You have to be totally transparent about your own financial situation with your partner.
Financial infidelity can kill your relationship! This doesn’t just apply to new relationships but to long standing ones as well. If you haven’t been openly communicating about your finances and you don’t feel comfortable about some of your partners behaviours with money or how they respond to yours, financial infidelity may have crept into your relationship.
Before you can go any further with planning your joint future, you have to get this out in the open.
In our practice, helping couples as a financial relationship coach, we were approached by a woman who had been with her partner for 13 years when they finally decided to get married. She was wanting to move from a partial money merge to a full and asked if we could help with the transition.
I was more than happy to do so until I received a phone call from her husband telling me in no uncertain terms that as far as his soon-to-be wife needed to know, he earned $xxx and anything over and above that was his and none of her business.
Deep breath here!
We ‘talked’ about his ‘instruction’ a little more until it was clear he wasn’t going to change his position; at that stage I was unable to work with them as a couple. Six months later their relationship was over. It turned out that there was a lack of transparency and trust in other areas of their relationship as well.
You cannot build a financial future together if you don’t tell your partner about the blip in your credit rating or the credit card that you are paying off that they know nothing about. They need to know about the money you have been tucking away.
Yes, they are probably going to be angry with you and you probably deserve it! But, low level financial infidelity can be sorted and worked through. Although, left too long it can be very hard for a relationship to recover and many don’t.
What is important to you may not seem to be important to them
You love going out and socialising with friends, he loves staying home and watching Netflix. He loves going for a run, you go to the gym. He’s up at the crack of dawn ready to face the day and you just want to pull the blanket over you head and get a bit more sleep.
Over time you will have come to understand what you need from each other both in how you choose to spend your time together and separately. It works for you in your relationship and makes it strong. The same consideration needs to be given to how you are going to spend your money. But often it isn’t.
Planning your finances and thinking about how you are going to allocate your disposable income without understanding each other’s Needs is quite often a cause for conflict between couples.
Needs are universal. We all have the same underlying needs in life, we just choose different ways to meet them.
Be aware that when you are in the thick of the numbers and trying to work out how much to allow on what, frustration can set in when you partner digs their toes in about something and just won’t budge. Instead of attacking them for being unreasonable, or uncooperative take a step back and work out what the Need is.
Once you know that you will get that, ‘now I understand’ moment as you have the same Need as well, you are just meeting it in a different way. That is when the magic happens and you can work out together how to meet that Need in a different way that may not even require a category in your budget!
Don’t even bother planning your finances until you have until you have a shared vision for your relationship
If you can’t get your life on the same page (as your partner), you won’t get your money. It is that simple.
If you don’t know what it is that you want from your relationship in the long term and what you are creating as a couple, it really doesn’t matter how you spend your money – or your relationship.
You can rub along together for years in your relationship raising your family and doing OK financially but what is it all for?
How often have you sat down with your partner and really talked about what you both want to do and achieve together? No, I don’t just mean having enough in the bank account for retirement. I mean what is really going to fulfill you; bring your joy and give you as a couple and individually, a real sense of purpose?
Once you have that sense of purpose in your life, you will have a sense of real purpose in how you choose to spend your money. Once you have that, building and sticking to a money plan is a piece of cake!
One of our roles is working with clients who are going through the pain of a relationship breakup. The most distressing cases are where long-term marriages (over 30 years together) have ended. This, at a stage in life when the children have grownup, you are financially stable and you are free to enjoy the rest of your life together doing all the things you never quite got around to. And here you are fighting over money as you go your separate ways. Why does this happen?
Here’s what we hear: the relationship got stale, they had put so much effort into raising their families they forgot to nurture themselves, they had nothing left in common, and in some cases didn’t really like each other anymore. Unfortunately, this is not unusual in relationships that have gone that 20+ years.
How can you prevent it happening to you?
If you do nothing else after reading this article, take the time to talk to each other and build a shared vision for your relationship. Make the choice to invest time in your relationship and your financial future.
This isn’t something that you do once and put in a drawer and forget about. Make sure you review it – at least annually. It will be a constant reminder of why you came together in the first place and it is what will keep you together when the going gets tough; as it does in every relationship at some stage.
Think back to those heady romantic days when you were dating your partner; remember how excited you were, the things you talked about, the plans you made. What would it be like to still feel that way 5 years, 10 years even 30 years into your relationship? That is the power of a shared vision backed up by your money plan.