Money and financial stressors are one of the top causes of divorce today. It’s easy to see how money tears people apart because, quite frankly, talking about money with your partner is hard! However, it’s important you both can openly communicate with each other about your financial situation.
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I’m not interested into becoming another statistic. So, my husband and I have found a system to help facilitate how to talk about money. I’ve outlined what we do that helps us avoid awkward conversation and facilitate honest, sincere financial discussion. (I’m also going to share a worksheet that we created that helps us document and organize our financial discussions. You can check out our free finance worksheet here). These tips and financial worksheet promote openness and transparency about our financial situation. Here are some tips that my husband and I use on a daily basis to talk about money:
Schedule an Appointment With Each Other
Setting a date to talk about money with your partner will help organize your time and limit that “stressful money conversation” to certain times. Make an appointment that works for both of you (try to have money discussions a few times each month.) During that time focus on just your finances. This tip has really helped my husband and I organize our time spent on financial topics. We didn’t want to be talking about finances every day because it isn’t the focus of our relationship. Setting a meeting gave us a time to talk about money and also allowed us to prepare ahead for the money talk. One tool that I created to help keep our appointments on track and organize our discussions is a worksheet detailing our financial situation. You can check our free finance worksheet! This worksheet is a great guide on financial topics to discuss and helps you designate a date to have a “financial checkup” with each other.
Open communication starts with honesty. Being honest about your current financial condition is key to building a trusting, financial relationship. Financial infidelity is serious and can create a barrier between the couple. In short, financial infidelity refers to couples with combined finances who lie about money. These secretive financial acts are unknown by to the other partner and consequently affect the couple’s financial condition. Examples of financial infidelity include hiding debt, possessing other credit cards without the partner knowing, secretive spending habits, secretly borrowing money, or even holding stashes of money or having secret accounts. I’m not saying that you need to sign everything over into a joint account (i.e. if you had an investment account prior to marriage). But I am saying that you need to be open with each other. Remember, you and your partner are on the same team. When talking about finances, one of the best things you can do is to be open and honest with each other.
When communicating honestly with each other, make sure you listen sincerely. Even if you do not like what you are hearing from your partner, now is the time to listen. Save your opinion until you have calmed down and can have an honest, rational conversation. Listening sincerely promotes a safe environment for open communication and helps you better understand the other’s point of view. Furthermore, it facilitates an honest conversation for expressing concerns and allows for problem solving together. To continue an honest and open conversation, practice attentive and sincere listening.
Discover What Each Person Values
What do each of you find important in spending money? Maybe one finds value in having the latest and greatest Apple product, while the other would rather spend that money on vacations. Neither is right or wrong. Each person values things differently. Sit down with each other. Talk about what you value and why is it important. You might not always agree on what is valuable. And that’s fine. The next step is to set priorities together.
Set Priorities Together
What kind of life do you both want to live? What does your lifestyle look like? Do you want a quaint farmhouse or do you want an extravagant home? Maybe you want to spend your money traveling the country. Maybe one of you want to be a stay at home parent to raise the kids. Be transparent with each other and openly communicate what your goals look like and how you want to shape your life.
Agree to Disagree
Sometimes, both parties might not see eye to eye. That’s ok. One way my husband and I choose to “Agree to Disagree” is to set aside personal spending money for each person per month. For example, say we set aside $100/person for personal spending. I can spend my $100 for that “must have” pair of Dansko Nursing Shoes or Figs Scrubs and he can spend his portion on the “must have” Amazon Alexa collection. (We currently have three Alexa Echo Dots that sing throughout our house!) Designating separate spending money gives each of us the freedom to get whatever we want within our allotted budget without the judgment or scrutiny of the other. Even with our different interests on what we find important, our “Agree to Disagree” method still allows us to openly communicate and helps us work together.
Make a Plan in Advance
When you talk about money, formulate a financial plan in advance for those “what if” times. This will help you both stay on the same page of how you are going to resolve a problem if one were to occur. One of the best ways to help plan for those unforeseen moments is to create an emergency savings fund. Did you have to pay an unexpected visit to the emergency department? Maybe you got a flat tire and had to buy a replacement. What if you or your partner lost a job? Having an emergency fund ready allows you both to be in control of those “out of control” moments. Having a plan ready in advance will give you both a safety net so you can stay on track with your budget and financial goals.
Talk About Debt
With debt, you want to get out of debt as fast as you can. Ask these questions: Do either of you have debt (i.e. school loans, car payments, credit card debt, etc)? Do you have a plan to get out of debt? Together, identify the type of debt, how many different sources of debt, how much money you owe, and how much interest is accruing. Create a plan together on how you are going to pay down that credit card debt or school loans. Some people choose to focus on the smallest debt first where others focus to eliminate the debt with the highest interest rate first. Once you have a plan set, give yourself a realistic deadline on when you can pay off your debt. As motivators, some people will create a visual graph or chart to help encourage them of their progress of becoming debt free!
Talk About Your Income
Don’t just focus on debt and monthly bills. It’s important to also address your income! Talk with each other about how you both earn money. Sit down and calculate each of your current earning power. Also, talk about your potential earning power. For example, say one of you is currently working as a Certified Nurse Assistant but also in school to become a Registered Nurse. Your current earning power might be less now, but a year down the road, your earning potential substantially increases. Just as it is important to talk about debt, talk about your source of income so you can achieve your goals.
Talk About the Long Term
It’s great to live in the now, but NOW is also the time to plan for your future! Starting to plan early for your retirement and future is essential. The more you can save now in a retirement, savings, or investment account, the more earning power you have later down the road. Talk about different investment opportunities and savings accounts that will allow you to benefit from compounding interest. Starting early gives your investment more time to grow. Time is your friend.
Don’t Plan to Solve the Problem Today
It takes time to figure things out. In fact, managing finances is always going to be an ongoing process! Don’t plan to solve all of your financial problems in one day. Instead, take small steps each time you talk about finances. For instance, one day talk about your debt. The other day, talk about investment opportunities. Remember to be patient with each other. Both of you are on the same team. To help you navigate through each topic of personal finances, check out our free finance worksheet here.
It’s easy to get caught up in the financial stressors of life, but don’t let that become a rift between you two. Remember, both of you are on the same team. Sometimes it can be awkward to talk about money with your partner, but using these tips can improve communication skills with each other and create a more stable financial foundation.
I encourage you to try these tips out for yourself. To make it easier to sit down and communicate with your partner, I created a worksheet to facilitate the money talk. Download your free finance worksheet here!
Did you find this post helpful? How do you create an open conversation and talk about money with your partner? We want to hear from you in the comments below!
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