Let’s face it, everyone hates talking about money. Why, though?
It’s not the money itself that’s the problem, it’s how we value money and how we act in regards to money. I see this most often amongst engaged and married couples. Financial issues tend to be one of the leading causes of divorce. Whether you’re engaged, recently married, or have been married for years, below are some great tips on the ways to discuss finances with your significant other.
“Financial Infidelity” is a term you and your spouse should become familiar with. Some people are afraid their partner won’t approve of how they spend money and become embarrassed or fearful their other half will find out about a bad money habit. This leads to lying, hiding purchases, accounts and extra money your significant other doesn’t know about. I work with a lot of couples and I’ve see this more than I’d like to. About 1 out of every 5 people in relationships say they have spent $500 or more without telling their partner. Another 6% say they have secret bank accounts and credit cards.*
This is the driving reason why communication is key! Chatting about finances regularly should be a priority between you and your spouse. With finances being a leading cause for divorce, it’s extremely important to know everything about each other financially. They say opposites can attract, but opposites in the financial department could be a big problem. Imagine if you’re frugal and your spouse is a spender. What would happen if you received a large lump sum of cash? Odds are, you’ll have different intentions on what to do with that money. Here are some ideas on how you should communicate:
1. Talk to a financial advisor
• My married clients occasionally see me as the financial mediator on major decisions. It’s good to have and talk to someone with an unbiased opinion about your situation.
2. Write a letter to each other outlining your financial plans
• In this letter, mention your financial past, including how your family handled money. Also, share information on outstanding debt and current investments
• Discuss how wealthy you hope to be and what you would sacrifice to get there. List your financial dreams and any bad habits you’d like to change.
3. Set up recurring meetings with each other
• In your meetings, discuss plans for any big purchases, savings and investing goals, as well as your monthly budget
• Review your recurring expenses and how you plan to divide them up. You should also cover any sharing concerns or strategies you have
4. Talk to other couples in your social circle about how they handle the same issues.
• This will help give you ideas on what similar couples are doing with their finances. It may be a touchy subject, so make sure you’re comfortable enough to discuss your personal and financial life with others.
It can be difficult, but discussing your finances is one the most important things to do with your loved ones. It can result in less arguments, less frustration, and provide a much better understanding of your spouse’s dreams and aspirations. Whether you’re engaged or married, speak with an advisor, like myself, today.
By Malcolm Jones
Investment Advisor Representative
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.
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