The money talk that every couple needs to have Your Money and Your Mind
Transcriber:
You know how your partner
likes their coffee,
what love language they speak
and even their medical history.
But how much do you know
about their finances?
[Your Money and Your Mind
with Wendy De La Rosa]
Chances are, you and your better half
are among the 78 percent of people
who would rather share
their full dating history
and all of that drama
and all of that baggage
that comes along with it,
rather than to disclose
your full financial history.
And yet research shows
that your significant other
has a large influence on a
whole host of your behaviors.
Understanding how they handle money
is a great way to prevent strife
and misunderstandings.
In fact, financial disagreements rank
as the strongest predictor of divorce.
So my tip here is that if you want
to strengthen your relationship,
it’s time to talk about the money.
You might be thinking,
“My partner and I don’t need to talk.
My partner takes care of
the money,” or vice versa.
But a 2018 study of heterosexual couples
shows that in these situations,
the partner who takes on
all of the responsibility,
the one who manages
all of the financial tasks,
they become more and more proficient
at financial management over time.
But the other person,
the person who has given up
all of their financial responsibilities,
their financial management
capabilities decline over time.
And what if something happens?
Maybe you break up,
maybe it doesn’t work out,
or, God forbid, maybe
your spouse dies too early.
If the person who wasn’t responsible
for the money management
ends up on their own,
that person oftentimes struggles
to regain their financial skills,
making it more and more difficult
for them to navigate the world alone.
And 75 percent of the time,
it’s the women who outlive the men.
For the partner who hasn’t taken on
the money management role,
it’s like forgetting a foreign language:
when you stop using it,
you lose some of your ability
to understand and communicate in it.
But if you keep that
financial immersion going,
so does your fluency.
Being open about your finances
can be very scary,
but it can also be very rewarding.
Experiments have shown
that shared vulnerability
establishes a greater
sense of trust, cooperation
and intimacy in relationships.
So to get you started,
I, along with a couple of colleagues,
developed a list
of 10 conversation starters.
Here are just three.
Number one:
What are your long-term financial goals?
What do you want to accomplish together?
Number two:
How do you measure your financial success?
Is it a house with a white picket fence,
or is it having the ability to live
anywhere around the globe?
Number three:
What’s the one thing you wish your parents
would have done differently financially?
As a university study found,
it’s important to answer
these questions together
because joint decision-making,
making decisions as a couple,
oftentimes results in taking fewer risks
that in turn can lead to higher savings.
Now, I’m sure you intuitively understand
that open, honest conversations
with your better half are beneficial.
And I understand that it’s
difficult to get started,
especially when talking about money.
But a great first step
is just to put some time on the calendar
so that you two can have
a nice financial chat.
Take out your phone right now,
set the calendar invite.
Your future self will thank you.