Congratulations: You’ve found the one. Whether it’s dating more seriously, moving in together, getting married, or improving your existing marriage, you’re now ready to have The Talk. I’m referring, of course, to sharing your financial situation with one another.
All playfulness aside, our culture has made the subject of money taboo. Now, you have the added complexity of needing to talk about it with someone you know, love, and value.
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As uncomfortable as it may be initially, the questions will come up one way or another: Either now, on your terms, while times are good, or later if the situation turns dire and you must respond. We all know the scary statistics surrounding divorce and money problems.
If you and your partner have foreseen financial conflicts an affordable financial planner in the Bay Area can potentially assist you with becoming comfortable with each other’s finances, thus establishing financial intimacy.
What is Financial Intimacy?
Financial intimacy is the act of two people exposing their financial resources, thoughts, behaviors, attitudes, feelings, needs, and desires to their partner. For this to be effective, both partners must be committed to creating a safe, open, and honest space where each individual can feel heard without judgment.
Your Partner and Money
Whether you realize it or not, money comes up pretty naturally if we let it. And it’s never too early or too late to start financial planning.
Think back to your first date:
- Did you split the check?
- Who left a tip?
- Were they a good tipper?
Having many mundane conversations as they come up can lead to healthier communication down the road, taking some of the pressure off the extensive money talks you have later on.
For most of us, managing money is primarily made subconsciously – internal programs derived from our past experiences, values, and beliefs about the future. You must approach these conversations judgment-free.
Money Mindset is ingrained within you but can be altered. Much of what you know about money is learned, either explicitly or implicitly, during your upbringing. If you had a very different childhood than your partner, you would most likely think about your finances very differently. That’s no fault of either of yours.
As your relationship grows, strive to match that growth in your financial intimacy.
Start by Leading the Conversation
Try starting the conversation with, “How comfortable do you feel being open about money?”
From there, other questions you may want to consider are:
- How much do you earn annually?
- Do you have student loans?
- Do you have any other debt, like credit cards?
- Do you have savings?
- Have you begun retirement planning?
- What do you pay for health insurance?
- How should we handle money?
- What are your money goals for the next 1, 5, and 10 years?
- Do you want to start a college savings plan for children? (if applicable)
Instead of posing these questions to your partner and waiting for a response, try leading the conversation by sharing your answers with them first. By doing so, you’re showing vulnerability and trust, allowing them space to reciprocate.
Many people feel shame and guilt when considering their finances, which is only exasperated when sharing it with a partner. You may need to remind them that your goal is only understanding – there will be no judgment.
Let the conversation flow naturally from there. Ask the “Why?” questions (to understand, not cast judgment). A kind way to open dialogue is, “Help me understand how you view….”
You don’t need to go from A-Z in one meeting. Take it slow and plan on it being an ongoing, open discussion. Take delight in knowing that affordable financial planning in the Bay area is suited to support this process.
Tenants for Healthy Financial Intimacy
Here are five key elements we believe you and your partner should focus on:
1. Transparency: Transparency is the engine behind a healthy financial relationship. Information should be shared openly.
But, you can still have areas of negotiated privacy (discretionary spending).
2. Equality: Your financials should not be dominated by either party. Equal say and equal power in financial decisions is crucial, regardless of income or other imbalances. Without it, feelings of dependency, inadequacy, and resentment can arise.
3. Inclusivity: No one gets to opt out – financial decisions should be made together, especially the big ones.
4. Sustainability: Whether you decide to make a budget, share certain expenses, share no expenses, or whatever, your plan must be something both you and your partner can stick to long term. Make it fun, make it not too strict, and make it together.
5. Flexibility: This goes hand-in-hand with the above. For your financial intimacy to flourish, it needs to be pliable to whatever situations, needs, or desires the two of you encounter.
Plus, if you know it’s flexible, you both will be more open to discussing your finances. It’s a win-win.
To share or not to share? That is the question. Joint bank accounts, co-signing on financial obligations, sharing credit cards, filing taxes together, discretionary funds – the list goes on and on.
Only you and your partner can answer these questions together. Whether you want to share everything, share some things, or separate everything is entirely up to you, based on your situation and personality.
To help you navigate the answers, consider hiring a financial planner. We’ve seen it all and know what works and what doesn’t. We know what questions to ask, how to create a safe and open environment and get to the deep-seated motivations which drive each of your money decisions.
Hiring a third party creates an entirely new dynamic. Instead of the one vs. one approach, it’s one advisor vs. the two of you, aligning you as a team. It’s a subtle shift but can be staggering. The difference in outcomes – and resulting relationships – can be staggering.
In Loving Sum
These conversations are tough. But, once you had, you and your partner may have significantly deepened your understanding of one another, increasing your relationship’s overall intimacy. Plus, it’s a great way to practice being vulnerable with one another. Despite all its bad press, money can bring couples closer together when done correctly.
Be proactive, approach the discussion delicately, withhold judgment, be willing to share first, and always remember: You’re on the same team.
After all, you’re planning your future together. What could be more romantic?
Investing involves risk, including possible loss of principal.
Humanity Wealth Advisors and LPL Financial do not provide legal advice or tax services. Please consult your legal advisor or tax advisor regarding your specific situation.