The strength of couple's financial communication - Wealthy Self

Communication is civilisation. I learnt this right at the start of my career in financial advice and it is something that I constantly refer back to, when putting together strategic advice for my clients. Now even though most couples might be on the same page when it comes to the end goal or objective such as buying a home, making babies, getting puppies and living happily ever after, what is usually surprising to them (but not to me!) is that people can differ wildly in how to actually achieve these dreams.

Take Sarah and Andrew for example. They’re in their early thirties, have been together 8 years and during that time, they’ve both been building their respective careers as a lawyer and project manager. They both want to start a family, but they’re not sure financially how it’s going to work.

We need to talk about money - Wealthy Self Financial Planning for Gen Y and Millennials - Couple's Communication

Andrew thinks Sarah should take the full 12 months of parental leave and take the financial hit to care for their future baby. Sarah, as the higher earner of the two, thinks she should go back to work at 6 months before they eat into their savings and that Andrew should take some parental leave so she can go back to work and they’d be better off financially. As you can see, great end goals of having a family and building their careers, but very different paths to get there.


Let’s talk about money

Now, there’s a lot of research around to suggest that money habits are learnt from a very young age (so you can thank your parents for some of your financial literacy!), but when it comes to actually talking about money with your partner, it is not unusual that it can be a pain point in the relationship.

In every relationship, there is usually the partner that ‘gets money’, is happy to invest more aggressively and is open to taking higher risks in exchange for higher returns. Compared to the other partner, they may have little financial knowledge, be much more conservative with money and not want to take risks their hard-earned cash for fear of losing it. WIth this typical dynamic, there is also usually a main decision maker who holds the authority over money matters in relationships – but it doesn’t have to be this way.

For any shared plan or goal to be successful, both partners need to be on the same page and this comes from building a strong communications foundation and educating each other about your money boundaries. By making strong and aligned financial decisions together, it can bring you closer as a team as you are both working towards your common goal and it will allow you to better understand each other’s attitudes towards money. Which is really important because one way or another, it will come out so best to be upfront about it!


One half of the story is an unfinished story

When discussing a couple’s financial situation and advice, for me, it’s key to speak with both partners, so that I can tailor a financial plan that will work for both of you. If I only get to speak with one partner, I’m only getting one half of the picture and as all my clients know and appreciate, the more information you give, the better your plan will be.

In terms of how talking to both partners can impact your financial advice, a key area I examine is the equal distribution of wealth amongst a couple and their family, to ensure each partner is not dis-advantaged financially, should your situation change dramatically or unexpectedly. This will help protect you as individuals and as a strong family unit too.


Talking tips

Weirdly, talking about money can still be a bit ”taboo”. Here’s our top tips to ensure a successful conversation with your partner about money:

  • Give them a “heads up” that you want to have this conversation and that it’s time to get aligned with your finances
  • Then book in a short half hour meeting to discuss (we call this Budget and Biscuits)
  • Both of you can sign up and download your Free Grow Your Future Workbook to shift your money mindset
  • For your meeting, make some coffee, grab some biccies and discuss how you feel about money, where you’re at with it and share your position on investing, savings and your dream goals
  • Work through the Budget and Biscuits guide in the free workbook
  • Book in monthly Budget and Biscuits meetings to discuss the month prior’s income and expenditure
  • Book in your free chat with David to see what Wealthy Self can do for you to help you get there together!
  • For our exisiting Wealthy Self clients, you can log into your My Prosperity account here to review your current, real-time situation.

If you struggle to discuss your financial situation with your partner, you can sign up for our Free Grow Your Future Workbook to help you to better understand your own money mindset!


General Advice Disclaimer

This blog contains general advice only. You need to consider with your financial planner, your investment objectives, financial situation and your particular needs prior to making any strategy or product decision. InterPrac Financial Planning Pty Ltd and its authorised representatives do not accept any liability for any errors or omissions of information supplied in this document except for liability under statute which cannot be excluded.