My great friend, Angela Aquino is the inspiration for this post. She’s one of the most creative gals I know. She also shares my love for a good margarita! Angela is an award winning graphic designer, a photographer, and is the brains behind the look my website. You can check out her wizardry and see her wares at LightDaughter.com.
HOW TO TALK ABOUT MONEY
Money is the number one reason why people get divorced in this country. It’s such an emotional subject, and most of us are never taught how to handle our money, never mind, discuss it. I remember clearly learning how to make out a check in elementary school, but that’s about it. My financial education came a bit from my parents, but largely from trial and error. You’re going to laugh, but when I was 19 years old a psychic told me that I would never have money issues. From that day on I stopped balancing my checkbook and let the universe take over. While there was one rocky spot in my mid-20s, I am in good financial shape. I have NO debt, and continue to save for the future and for emergencies. I know I am crazy and lucky. I am also not married, so I don’t currently have the concern about merging my finances with someone else.
So, how do you handle money in a relationship?
I am not a financial planner, and don’t claim to be a money guru. When I coach couples heading into marriage, we start with a discussion on money. It’s a chance for each partner to share his/her expectations and fears. To talk honestly about knowing how much there is, where it comes from, where it goes and creating a plan for the future.
Here is the list of questions I ask. I encourage you and your partner to go through each of these. Give yourselves plenty of time. Fully express your expectations and fears and have the patience to truly listen to each other. Be open to all thoughts, questions and be aware of your emotions and judgments.
1. How do you think your upbringing, culture, and gender influence how each of you approach money? Are you a spender or a saver? Do you know what your financial personalities are? How do you define luxury?
2. Where does your money come from? Do you each bring in similar salaries? If not, is that okay with both of you? What would happen if one of you no longer wants to or no longer can work?
3. Where does your money go? Even if your budget is a general one, it is important to know how your dollars are being spent. Do you have separate individual and/or combined budgets?
4. Do you have a joint or separate banking accounts? Or some combination of the two? These should include checking, savings and investment accounts.
5. Who actually sits down and pays the bills? Do you do this together or has one of you volunteered for this task? Reevaluate if the way you have this set up is working or not.
6. How much do the two of you owe in debts and what are your assets?
7. Do you have any financial goals for your future? If you do, re-evaluate the progress you are making toward your goals. If not, make some goals, both short-term and long-term. These should include retirement, home repairs, emergency funds, the kids college fund, etc.
8. Where are the two of you most vulnerable in your finances? Is it a lack of job security, over spending, not enough income, too much debt? Decide together how to strengthen your financial position.
9. Do you know your credit record? If either of you has a poor credit score, it may prevent you from qualifying for a loan or getting a low interest rate, if you apply jointly.
10. Is there a plan to protect your financial security? Review your health and life insurance to look for ways to save as a couple and to ensure your coverage is adequate for the two of you. Update your wills and investments to ensure that your future spouse is named as your heir, if that is your wish.
11. Do you both know where important documents such as insurance documents, wills, tax information, bank account numbers, investment information, etc. are located?
If the discussion in turn generates more questions than it answers, and becomes overwhelming, I encourage you to enlist a financial professional. Ask your friends, colleagues and family in your area for a recommendation. Don’t settle until you find someone you truly like.
Are there any questions I missed? How do YOU discuss money in your relationship?