Wednesday, 16 April 2014

Money and relationships: Communication, Communication, Communication

When I was a bit younger I confess that communicating about money was the last thing I did in a relationship.  It didn't feel like one of the important things you needed to focus on.  It was not that I was 'the shallow guy' - looks weren't the things I focused on - I focused on how nice the girl was, how she treated me and how she treated others (you know those soft things you're told that you should focus on) but I never really talked about money.

As I'm getting closer to proposing to my girlfriend and settling down and getting married and all the expenses that come with that I have started communicating more...and I've realised just how important it is to get on the same page.  It's not that my girlfriend and I had vastly different expectations about our financial life - to the contrary - we were more alike than I first imagined but communicating allows you to to work together towards your financial future.

Some of the advice below I have muddled my way through and worked it out on my own while others is a compilation of advice from my older (and wiser) couples who have a great working relationship when it comes to finances.

Why is communicating about money important?

There are several reasons why communicating in an easy and open way about money is important:

  1. It means that there are no mismatched expectations
    • When yours and your partners expectations are not met financially it can lead to a lot of tension
    • If you are the saver for later in life and to set you up and you partner is living in the moment and spending you can feel like you are bearing the weight all on your own while they can feel like you're a miser and holding them back
    • Communication and compromise is the key - work out what you're willing to compromise on and make it work.  
  2. You can help each other achieve your goals
    • You may actually be surprised when your goals line up pretty well with you partner's even when you didn't expect it to
    • I have been wanting to start a small business for a long time and after chatting to my partner about it recently I found out that it is something she has thought about doing for a long time too and we are now actively working on something together
    • My partner is not at all interested in finance - I can see a little part of her die whenever I start talking about it - so I extended that assumption to small business as well but I couldn't have been further from the truth
  3. It can bring you closer together
    • A natural part of discussing finances is discussing goals and objectives - when these become share goals or shared objectives it can bring you that much closer together
There are many more reasons that talking about money is important but the ones above are the ones that really stood out to me.  If the older (and more experienced) readers of this blog would be willing to add more advice for the less experienced readers (like myself) that would be much appreciated!

...But how do I bring up the topic of money with my partner?

Starting the conversation is often the hardest thing.  This is the way that I had recommended to me and it is also the way that I started talking about money with my girlfriend:
  1. Start the conversation about life goals and plans
    • It is really really hard to start talking about money straight off the bat
    • Most often, money is just a means to an end (i.e. the new car, first house, comfortable retirement) - start talking about what your end looks like
    • Find out what their end looks like
  2. Ask them how they plan on achieving those goals
    • Be realistic - most people have goals but they don't really have a formal plan about how to achieve them 
    • If you are lucky enough to be with a partner who has a plan to achieve their goals (no matter how far away) then consider yourself a winner - you guys just need to work out how to meld your goals together
  3. Talk about how you plan on achieving your goals
    • The chances are that your partner doesn't really have a plan on how to achieve their goals - not a defined one anyway
    • Don't make them feel bad about that - just talk about  your goals and how you plan to achieve them and what your plan is
  4. Offer to help them achieve their goals
    • I have never known someone who has turned down help in achieving their goals - if it means you help them set a budget or find a savings account that works for them then this is a great way to start the conversation about money - it also builds trust
  5. Don't be judgemental
    • People are often insecure talking about money.  I found that talking about money as a tool to achieve goals rather than as a status symbol or a goal in and of itself is a great way of breaking that ice
    • Don't be judgemental if your partner's goals don't match with yourself - work out how you can work together.  If you guys are on different planets and you really can't see how to make it work then consider whether this is the right person for you (I have no idea how you do this if you're already married or in a long term de-facto relationship....I'll leave that advice to others)
Remember that this is just to start the conversation about money.  It is a process which should involve constant communication and re-evaluation.  Again, if older and more experienced readers are willing to offer more advice I'd love to take it on for myself and I'm sure that others would be the same.

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  1. This sounds like you have written this from experience and have been well thought out.. It is an area that I haven't really encountered much due to not being in a longer term relationship, I'm sure it will have it's challenges but be rewarding at the same time..

    All the best on the proposal (when you decide to commit to it).. Hope she doesn't read this blog ;) haha

    1. Hi Jef!

      Not as much experience as I'd like and definitely learning something new every day! Half that advice was also from much older and wiser people...

      Thanks re the proposal. She doesn't read the blog but she does know about it