Financial Advice
Rich Best has spent 28 years in the financial services industry, as an advisor, a managing partner, directors of training and marketing, and now as a consultant to the industry. Rich has written extensively on a broad range of personal finance topics and is published on several top financial sites. Recent books include The American Family Survival Bible and Annuity Facts Revealed: What You MUST Know Before You Invest.

How to Talk About Money With Your Spouse

How to Talk About Money With Your Spouse

When it comes right down to it, a marriage is also a financial merger, which often requires as much care and attention as the marriage itself. The joining of two people in matrimony also includes the union of attitudes and values about money along with any money problems that existed before the wedding. The failure to become fully aligned in the way money should be handled or address any serious money issues early in or even before the marriage often leads to irreparable harm to the marriage. Talking about money with your spouse, while it may not come naturally, is essential to a harmonious union.

Why Couples Don't Talk About Money

Money, and all of the issues that center on it, is one of the top causes of divorce in the US. At its root is the lack of honest and open communication between the two spouses, which is also a leading cause of divorce. Money issues are the primary cause of stress for individuals. When two individuals bring money issues together in a marriage, the stress factors are compounded. The lack of communication could be a function of not wanting the other spouse to know how irresponsible you have been. It could also be a function of wanting to protect a spouse from stress; in some cases, it is due to outright deception – going around a spouse's back or against their wishes. It can also be a function of simply not knowing how to broach the subject. Whatever the reason, it invariably leads to mistrust, resentment, and more stress.

The Value of Open and Honest Money Discussions

Ideally, the money talk should occur before two people get married. It is the best opportunity to learn about each other's values and beliefs about money and work towards addressing any issues that could later rock the marriage. If it does not happen before the marriage, it needs to happen right after, especially before any significant money decisions are made. The earlier in the marriage two people can align themselves along money lines, the easier the discussions are. However, it is never too late to begin the talks. If you are not quite sure how to approach it, here are some helpful tips to get you started.

Have a Shared Vision

The best and most natural place to start is discussing your goals – not just your financial goals, but your ambitions and your vision of a good life together. The more you can come together in your shared values, beliefs, and attitudes about money, the easier it will be to make tough decisions together. When you are clear about your shared goals and priorities, you will have more clarity and conviction in your choices.

Admit Your Shortcomings

Humans are infallible – we are all prone to making bad decisions. This is the time to admit your shortcomings. Do you spend impulsively? Do you spend without regard to a budget? Do you tend to rack up debt? Are you lousy at saving money? Encourage each other to talk about where you have gone wrong in the past and acknowledge the fact that it cannot continue if you are to live in harmony. Come to an agreement on the financial practices you both will follow and pledge to support each other when either of you makes a bad decision. The honesty alone will bring you two closer together.

Plan Together

With a shared vision and mutual goals, it is essential to build a formal plan around them. Having a formal plan for achieving your goals will keep you focused on what is critical. The plan should include a budget, a savings plan for short-term goals, and an investment plan for long-term goals. It should also include contingencies for when things do not go according to plan, including the creation of an emergency fund, life insurance, and making sure you have the right property and casualty coverage. A well-conceived plan can help both of you be more disciplined in your approach to money.

Talk about Debt

It is not unusual for both spouses to bring their own share of debt to a marriage, especially if both are college graduates carrying student debt. However, more often than not, it is one of the spouses with a bigger debt problem. The debt issue needs to be addressed right upfront. If there is debt to be paid down, there needs to be a plan to eliminate it. From now on, it's essential for the two of you to be closely aligned in your attitudes about debt and develop a family policy that dictates how debt will be used, if at all, in the future.

Pair Financial Discussions with Date Nights

At the very least, you should have a regularly scheduled time, preferably each month, in which you discuss your budget and any money issues that need to be addressed. Use it as an opportunity to check your progress towards your goals, whether it is to pay off student debt or save for a home. Celebrate your progress by ending your discussion with a nice dinner and a bottle of wine. More importantly, celebrate your financial harmony.

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