For a long time, it was taboo to chat about sex, politics, religion, and money. Today, we’re more than comfortable with sex. All we talk about is politics, and religion is no longer off limits. But we’re still struggling with money.
I think that’s because it touches every aspect of life, and we associate a portion of our overall worth with our net worth.
While it’s perfectly fine with me, if you never talk to your friends or coworkers about money, you’ve got to talk with your significant other about it. The risk of not talking about it is too high.
Here’s what I mean- money is the second leading cause of divorce, and a lack of communication is the third. When you put those together, they may compete with number one, which is infidelity (not really, but you get what I’m saying).
My goal is to convince you to rip off the bandaid and to have the taboo chat about money. From there, I’ll give you tools to have a productive conversation. Finally, I’ll give you some tips for moving forward together.
I’ve been helping people get better at money for 20+ years as a financial advisor. I’m honored to be named to Investopedia’s list of the top 100 financial advisors many years running. Most importantly, my wife and I used to have a hard time talking about money. Today, we’re on the same page.
Here’s what we’ll cover:
- Why you should have the taboo chat
- How to have it
- Moving forward together
Let’s get started.
Why you should have the taboo chat
Life is both too short and too long not to talk about money. That’s because money has time value. The longer we wait to pursue our financial goals, the harder they are to reach. The earlier we start, the easier they are to reach.
Most Americans are struggling with money. Two-thirds of us are living paycheck-to-paycheck, the average credit card debt is over $6,000, and half couldn’t come up with $500 in case of an emergency. The sooner we address these problems, the better.
What happens when you don’t address problems? Do they get better on their own? No. They become bigger problems.
Think about how you’ll feel after you have the talk with your partner. You’ll feel like a weight has lifted. If you have an actual conversation about money, you’ll be positioned to move forward together towards your most important financial goals. Doesn’t that sound good?
Let’s talk about how to do it.
How to have it
Many of us have shame around money. We’re embarrassed because we’ve made poor financial decisions, or because we haven’t been paying attention to it. It’s also highly possible they’ve never had a conversation with another human being about it. Recognize your partner may be sensitive about it.
I believe the goal of your initial conversation is to decide how you’ll move forward. Will you move forward separately, or together?
There are some couples who keep their finances separate, and that’s fine. Should you choose to do that, you’ve got my support.
My preference is that you decide to move forward together, and will treat money as community property.
As you’re preparing to talk about it, keep in mind we’re all creatures of habit. We have familiar patterns we follow every day. This is true of money. So be patient, empathetic, and curious.
When you’re ready, simply tell your partner “I’d like to get on the same page about our finances, can we talk about it?”
Stress the need to be open and honest about getting on the same page and building the lives you want.
Moving forward together
A great way to get on the same page is to set goals together. Odds are, you’ve got ideas and plans for your future- and so does your partner. Setting joint goals will help to ensure you’re rowing in the same direction.
I encourage people to take an integrated approach to setting goals. Instead of just thinking about your financial goals, also think about your goals in every aspect of life. There are six key areas I focus on:
- Family
- Community
- Career and financial
- Wellbeing
- Personal development
- Peace of mind
If you’d like to use our framework, you can access our Goals course for free.
Having a conversation about values is also important. This is an opportunity for you to crystalize your family values. When you develop shared values, they’ll serve as guides for how you allocate your most important resources; time, attention, and money.
You can access our Values course for free as well.
Managing expectations
In order to successfully jointly manage your finances, you’ll need to be on the same page with your cash flow and your budgeting.
For cash flow, it’s simply knowing how much money you have coming in, and how much is going out. A key part of managing your cash flow is monitoring your transactions. To do this, you simply log into your financial accounts and review every transaction. This should be done at least once a month.
Here’s a blog post on cash flow
Budgeting is a plan for your money. When you budget together, you’ll know when you’re on track financially, and when you’re behind. It will help you know areas where you need improvement, and where you’re doing well. A budget will also help you know if you can afford to do things like take a vacation.
Here’s a blog post on bugeting
As you’re getting started, you should review these two important things, along with your goals, on a monthly basis.
Risk tolerance
Finally, it’s wise to understand one another’s risk tolerances. Risk tolerance is the term we use to describe what kind of investor you are. More often than not, one partner will be more conservative and one will be more aggressive. To help you understand yours (and your partners) you can access our Risk Profile.
Doing these things will get you started on your path to financial success together.
Closing
You’ve got enough time to do just about everything you want, but not enough time to waste. Getting on the same page with your partner about money is one of the most important things you can do for your relationship.
If you’d like to dig deeper, check out our Same $ Page Course.
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