I get it … the topic of money is not always the most pleasant conversation to have with your significant other. It’s an emotionally-driven subject with lots of complexities. However, because it affects nearly every aspect of our lives, from the neighborhood we choose to live in, the car we drive, to the school our kids go to, it can quickly become a point of contention if both parties are not on the same page. If you don’t believe me, take a look at these sobering statistics:
- Feeling that one’s spouse spent money foolishly increased the likelihood of divorce 45 percent for both men and women.
- Couples that argue about finances at least once a week are 30 percent more likely to get divorced.
The great news is that these disagreements can easily be solved with you guessed it … communication! I’m a big fan of monthly money dates, or even weekly if that works for you better! The fact of the matter is that you have two people coming together with different backgrounds, experiences, goals, and learned money behaviors. It’s important to remember that before you dive into these money dates, there can be a lot of shame from past financial mistakes, feelings of guilt, defensiveness, and even anger. By having an open conversation on a regular basis, you’re accomplishing a few things; you’re keeping each other accountable, you’re keeping your goals front of mind, and you’re laying the foundation for a stress-free conversation when you want to bring up a potential issue you’re concerned about.
When you schedule your next money date, focus on these areas to ensure you’re in agreement:
Financial Values and Goals
Money is simply a tool that you utilize to accomplish the things that are important to you. Ask each other, “what is it that you value?” Is family-time a priority where you’re willing to pay a bit extra for convenience so you can spend those extra hours with loved ones? Or perhaps, you look forward to that one big vacation every year so you skrimp and save so you can give your family that memorable moment? Is it important to maximize every dollar for financial independence and early retirement or is life good as long as you’re debt free? Everyone is different! The question is whether you’re in agreement with your spouse?
You and your spouse may very well share the same goals but do you know which one is the top priority for your significant other? It may be important for you to build up savings for that house down-payment but your spouse may be withdrawing that as quickly as you’re saving it if their priority is to pay down the student loans. The best thing to do is list all of your goals, rank them by priority level, compare and discuss. This is definitely an exercise of give-and-take but hey, isn’t that what marriage is all about? If you both are working towards the same goal, you’re only going to accomplish it that much faster.
Before you start to concern yourself with investment strategies and tax-saving moves, answer this, “how will we handle an emergency?” The question isn’t whether something is going to happen, but when? Busted water heaters, car repairs, roof repairs, broken bones … these are a few of my emergencies over the past couple of years. While we hope for the best, we plan for the worst. Having an emergency fund is a vital first step. It’s prudent to keep 3 – 6 months of living expenses in a liquid account that can be accessed when those inevitable mishaps happen. And it is important to have those difficult conversations about death and disability. Don’t add unnecessary financial stress to grief, ensure you are adequately protected with life insurance and disability insurance, not to mention vital paperwork such as a Will and Power of Attorney. Read: Why Estate Planning Is Not Just For the Elderly
There are so many ways to build wealth including through investing, entrepreneurship, real estate, or an inheritance to name a few. The best way to build wealth is to plan, save and invest early on as time can greatly increase your investment returns. Regardless of the route you choose to take to get there, again, it’s important that you and your spouse are in agreement. Read: Choosing the Right Investments
If you need help with any of these areas, check out our services! We focus on reviewing each of these points with you and doing what we do best, which is helping you build wealth and accomplishing your goals. Schedule a complimentary consultation with us by booking a time or sending an email to [email protected]. And don’t forget to sign up for our newsletter below!