Starting the Money Conversation
Terry Bennett, Money Coach, Mac’s Money Centre
Talking about money is stressful. In 2014 Wells Fargo did a study and found that 44% of Americans view talking about their finances as more stressful than dealing with conversations about death, politics or religion. Time magazine reports that 40% of couples don’t discuss how they will manage their finances before getting married. Yet the repercussions in avoiding these talks can be quite significant; impacting one’s health, finances and relationships. So, why is the money conversation so hard? We tend to believe that money is a very private issue and fraught with judgements. Do I make enough, have I made some very poor decisions, am I a loser — these are a just a few of the sentiments expressed by those who eventually end up coming for financial support. Many of these individuals end up overwhelmed by debt, missing opportunities for building wealth or are unaware of the basic strategies that would improve their financial wellness.
So what can you do the start the money conversation?
There are some very effective tools for bringing up the subject and exploring your (and your partners) feelings about money. One thing you want to avoid is making your partner feel like you are accusing or belittling them. So make it a benign and fun experience.
Try these ideas!
1. Everyone loves to imagine what it would be like to win the lottery. So ask what would be the first 3 things they would do with their new found $1,000,000 win? Would they pay off debt, purchase a home, stop work and travel for a year. Discovering you or your partner’s priorities gives an insight into what adds value and meaning to life.
2. Make a pie chart and delineate 8- 10 expenses that would be incurred in your budget. Housing, entertainment, debt repayment, savings, transportation, retirement planning, clothes, travel, donations, religious spending are examples. Now by carving up the pie show how much of your budget you’d’ like to allocate to each expense area. This exercise can help you set your priorities and then share your pie chart with others to see how their priorities mesh with yours.
3. You can ask hypothetical questions that reveal how someone is thinking about an issue. Suppose that you were behind in your student loan payment and hadn’t shared that with your partner. If you were 1 month behind how would you feel about sharing that information? If you were 5 months behind? How would you want to handle this? How would you want your partner to respond? In the same vein, if you lost money by gambling or taking a big risk with investments how would they react/ how angry would they be? These type of questions give you a window into how they value trust and honesty in a relationship. It can also help you understand how you can build the importance of transparency into your relationship. If you want to use your money effectively and in tandem with your partner communication and openness is the key.
4. Another good “starting the conversation” question is to explore what it was like for “them” growing up. Was money discussed in their home? Were they ever told NO and that they couldn’t afford to do something? Did their parents have a budget? Was money a source of friction between their parents? What effect did these behaviours have on their own outlook regarding money? Most people are very influenced by what they experience in their family. Understanding your friend/partners early experiences with money can give you a glimpse into what are their beliefs and attitudes.
5. Joining bank accounts, sharing financial goals and funding joint interests is an important part of your relationship. If one of you is more financial savvy than the other, or if one person in the relationship takes on more responsibility, you need to talk about how the other person remains involved and engaged in all decision making processes. This needs to be a joint venture- book a time (once a month) to review bank balances and shared goals. Monitor your progress and celebrate your wins — debt loads declining, savings accounts growing. Keep each other in the loop, respect each other’s skills and remember you are in this together! This does not mean each of you can’t have separate accounts and maintain financial independence in some aspects of your financial life but in the areas that are shared trust, honesty, respect and understanding each other’s attitudes and beliefs is crucial.
So start your conversation and remember Macs Money Centre is here to help you with the conversation if needed. I have some fun games that we can play to get the process started!
Terry
