What could be more complicated than love? Money, hands down.
The strange, beautiful chemistry that binds two people together can make us blind to many faults. That’s good, because we certainly have faults of our own.
Where things can turn sour, of course, is when we have to talk to our partners about spending, saving and investing.
I find with my clients that one half of a couple usually takes the lead. The other person takes the back seat, content not to think about money at all.
Thus it goes, sometimes for decades. Under what appears to be still waters, however, can be unspoken turmoil.
In one common scenario, he’s an investment gambler. She’s a steady, look-before-you-leap type. (The “he-she” here could be reversed, of course.)
If things go well with the investments, the conflict lies dormant. But then the stock market takes a spill, a job is lost, a medical expense empties the bank account — and suddenly money is front and center.
There’s a reason the traditional marriage vow includes “for richer or poorer, in sickness and in health.” Relationships end over money, all the time.
It’s good, then, to find a way to have the money talk regularly. That could be biweekly, after payday. Maybe it’s quarterly. Whatever feels right.
One of the most important services we provide at my firm is to help our couple-clients learn to talk about money.
Like a couples therapist, a good financial adviser should be comfortable helping couples handle conflicts, sort through the issues, forge compromises, and find a path forward. An adviser who can take the money stress out of a marriage is worth every penny.
Here’s an easy template for that conversation, a checklist of topics to hit and agree upon, each time you talk.
Accounts now
How is your immediate income and spending going? Are you falling short each month? Are debts creeping up in the background?
It’s much better to talk about a small spending misfire than to clean up a mess of red ink that’s been quietly spilling for a year. Rather than point fingers, own the problem and suggest spending cutbacks that affect both of you to get back the track.
Saving targets
Nothing takes the pressure out of a relationship like feathering your nest together. A solid savings account balance can make up for a lot of small money mistakes, regardless of who made them.
Rather than setting a dollar goal, put aside a percentage of each paycheck, if you both earn an income. In order to be fair, let the high earner carry the heavier load.
Investment ideas
Some people view investing as a kind of game, where bigger wins are more important than incremental progress. Others prefer to see steady, reliable growth.
If you don’t agree with your spouse or partner on a single investment philosophy, break the investment process into two accounts: “our future money” and “now money.”
You should invest future money prudently for growth. Now money is for stock picking or whatever is in fashion.
Make sure the “now” pot is small as a percentage of your income. Challenge your risk-taking partner to reinvest gains into the “our future” pot. Over time, he or she will see how the future money dwarfs the speculative account.
Timing
No, you should not propose this conversation as your concept of a romantic dinner date. Absolutely not!
However, while you’re out enjoying a nice meal and talking about how great your lives are together, there’s probably no better time to pop the question: “So, let’s talk about money, later this month, because I care about you.”
It will go better than you think, and will very likely relieve stress you might not realize has been building in the background.
Everyone wants to be taken care of, and they want a partner who cares about a life together.
For richer or poorer, remember? With a bit of money honesty, that should mean richer together.