Full disclosure: I can't discuss having "the financial talk" without discussing my own relationship! Although my marriage is far from perfect, a culture of open discussion about finances is one thing that I believe we got 100 percent right... and I cannot take an ounce of credit for it. My husband, who does not have one iota of training in psychology or any related mental health discipline, brought to the table firm beliefs about the importance of open discussion about financial goals and issues. In fact, it was so critical to him, that he refused to make a greater commitment toward engagement and marriage until we had "the talk". He continually cited research indicating that a top reason why marriages end in divorce is because of conflict over finances.
He's right. Since we had "the talk", I have seen many couples in therapy who describe frequent arguing, violated expectations, and profound disappointment in one another and in the relationship — often in part because of financial issues. Financial conflicts that have been described to me include significant differences in spending habits, differences in the degree of tolerance for credit card debt, instances in which one partner allowed the other to have full control over the family's finances and later learning that bad investments had been made, and even instances in which one partner had substantial debt that had not been disclosed to the other before becoming married.
Each time one of these situations was described to me, I gently asked if they had discussed financial goals and issues before deciding to get married. And in each instance, I received a resounding "Nope."
I recently wrote an article about talking to your partner about your desire to have children before you make a full commitment to the relationship. In that article, I argued that it is crucial to be on the same page regarding your desire for kids before jumping into a committed relationship. The same goes for being on the same page with finances, which involves full disclosure of one's current financial situation and discussion of short and long-term financial goals. It's hard stuff. I remember drudging over to my then-boyfriend's home, hauling my bank statements and credit card statements, dreading his reaction when he saw that I was still paying off debt from my crazy graduate school adventures that went beyond the means of a $15,000/year salary.
Obviously, it worked out in the end. He was impressed that I was taking charge of my debt. I was thrilled that he did not have additional debt to add to our financial burden. We set savings goals. We anticipated major purchases that would be made in the next five years, such as our first home. I pouted a bit when he insisted that I give up my high-end skin care products, but I eventually adapted.
My clients frequently ask me, "When do I bring this up?" Honestly, there is no right or wrong answer to this. Bringing it up early in the course of the relationship allows you to determine whether the two of you are simply incompatible when it comes to financial issues and goals, allowing you to move on from the relationship if you are, indeed incompatible — rather than investing a lot of time in a relationship that ultimately won't work. But if you bring it up later in the relationship, you will know your partner better, which will allow you to choose a communication style that you know has been successful for addressing sensitive issues.
You and your partner will likely have, by that time, established a relationship characterized by love and mutual respect, which will be assets in negotiating any differences of opinion that arise. It is up to you to weigh the advantages and disadvantages of the timing on the basis of your unique circumstances.
Tips to keep in mind as you think about your financial compatibility:
• Gather some data by observing your partner's behavior. Are his or her spending habits conservative or liberal? These observations might give you an initial indication of your compatibility. On the basis of these observations, you can hone the specific issues that you hope to discuss.
• Be collaborative when you approach the topic. Don't drop a bombshell on your partner and demand that he or she answer to you at that very moment. Start by saying something like, "I've been thinking some about my financial future lately. I wonder if this is something that the two of us should talk about as we look toward the future together?" You don't need to have the conversation at that moment; both of you can take some time to think about what you'd like to discuss.
• Use effective communication skills. If you disagree with financial choices your partner has made, refrain from pointing a finger (e.g., "Why in the world would you do something like that?"). Instead, ask for understanding in a supportive, non-judgmental manner (e.g., "Help me understand how this debt accumulated.")
Specific topics that should be addressed:
Again, everyone is different, depending on their own unique circumstances, but here are some areas that you can consider.
• Amounts of debt and your plans for paying it off. It is important for you to know whether you would go into a committed partnership with joint debt, or debt that will continue to be paid off individually.
• Amounts of savings and other assets. You should also know whether you would enter into your longterm partnership with joint assets or assets that each of you would retain individually.
• Spending habits. You will want to know the manner in which your partner approaches budgets and spending. Does your partner spend his entire paycheck each month, or does he save? Does your partner mainly spend money only on necessities, or does he or she also spend money on luxuries? How does your partner's style jive with your own?
• Financial styles. For example, do you pay bills as soon as they are received, whereas your partner pays them right before the deadline? Is your checkbook diligently balanced, whereas your partner's is a very rough approximation of what he or she thinks is in the checking account? Do you contribute the minimum to retirement, whereas your partner takes full advantage of his or her employer's matching plan?
Answers to these questions may or may not be deal breakers. It is important for you to have a clear sense of what is negotiable and non-negotiable. However, it is equally as important to know that there is no one right way for a couple to approach finances, so keeping an open mind about an alternative approach could help you and your partner to navigate a middle ground.
This "talk" does not at all have to be something that tears the two of you apart. It could ultimately be something that brings the two of you together because you will have communicated honestly and sensitively, solved problems associated with an important issue as a team, and you will have begun to plan for your future. As for me, my financial situation did not turn off my future husband. In turn, his meticulous attention to detail did not turn me off. Our initial "talk" evolved into a collaborative, mutually satisfying approach to ongoing budgeting, saving, and financial planning. In my next article, I will provide tips for maintaining ongoing dialogue about finances in a manner than enhances your relationship.
Dr. Amy Wenzel is a clinical psychologist, author, and consultant who uses cognitive behavioral therapy to help individuals and couples navigate countless interpersonal issues, including conflict about finances. To learn more about Dr. Wenzel, visit her website.
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