What is your intimate relationship with money? Are you a bury it in the backyard type of person or do you put it all on red and cross your fingers? More importantly, what is your spouse or partner’s relationship with money? Do you understand what makes them tick? What drives their financial decisions? Or are you afraid to know?
Today we are going to be talking about couples and important conversations about money.
What is your relationship with money? Knowing how you regard money is very important. We all have a story…we’ve all had experiences with money growing up and in our early adult years that have molded how we regard the all mighty dollar.
In my family, we lived quite comfortably but there was a strict budget in our house. You see, my dad was a Philly firefighter and my mother was a stay-at-home mom (or in more professional terms, the Household Business Manager). How many of you are familiar with the “envelope system”?
My Mom used the “envelope system” religiously. 12 envelopes each designated with a title of a monthly bill such as groceries, rent, utilities, etc., and the amount that needed to be added from each of Dad’s paychecks in order to make the proper payment each month.
This is the foundation of my own online budget system. Once the amount is used or perhaps you want something that isn’t in your budget, you either go without or borrow from another envelope.
Once you understand a bit more about how you relate to money, ask your partner to give you an example of his or her understanding of how you make money decisions. For example, I would ask Gehan if he knows what I mean when I say “The grocery envelope is empty,” hoping he responds with “If the grocery money is all spent, then we have to go without or borrow from another “envelope” and then it all trickles down.”
If we keep emptying the grocery envelope but keep having extra money in the clothing envelope, maybe we have to reallocate funds in our budget. Likewise, if we manage our envelopes well and find that we have an envelope with a large balance, we get to decide what the best decision for those excess funds would be together, such as an improvement to the house or adding to our investments or a weekend getaway for two.
Now that the conversation has started, ask your partner how they saw their parents spend money? How did it make them feel? How did this affect the way they themselves spend money? What would or do they do differently?
What makes your partner happy with the way you manage funds as a couple? What drives them crazy? Be careful not to play judge and if need be, have this conversation with your financial planner in the room. They can help put the financial picture into a future perspective without fighting over past decisions, after all, we can’t go back and fix past mistakes, but we can choose to make better decisions going forward.
In summary, there are three action steps couples need to take for important money conversations to happen…
- Identify your relationship with money. How does money make you feel and what drives your decisions? When you understand your relationship with money you can make better decisions going forward.
- Get a clear picture of your partner’s understanding of how you approach money. It is essential that your partner understands how you make financial decisions and what you want for your future together.
- Get a clear picture of your partner’s relationship with money. It is essential that you understand how your partner makes financial decisions and what they want for your future. A Financial Planner can help you work through some of the difficult questions and help you focus on the future you want.
My suggestion is that you put some time aside this weekend – perhaps Sunday morning after breakfast while pouring your second coffee. Tell your partner that you watched this video and ask them to watch it too. Now, start the conversation!
Need help? I’m happy to ask the questions so you can listen and learn with your partner. Schedule a 10-minute phone call with me.
Thank you for joining us for this episode of Widow & Wisdom™ (your wealth edition), where your mindset and money matter most.