Couples' Finance



Figuring out your own major goals and come up with financial plan can feel daunting enough, what happens when you have to throw another person into the mix?  Unfortunately, money-related conflicts are frequently cited reason for divorce and separation. It's once aspect of a relationship that many people avoid talking about.

As a practicing psychiatrist, I understand that money isn't just about money. Money brings up many other relationship issues that are sensitive and deep-rooted. Talking about money with your partner ultimately involves figuring out how your goals and values align with someone else's. On a deeper level, it also brings up other important issues, such as communication styles, your family background/experiences with money, personal attitude towards money, power dynamics, gender-role expectations, and sense of independence vs. interdependence. Then, you add another layer of feelings (like guilt, shame, mistrust), and you can see why it can be such a sensitive topic. But it's worth trying.  If your partner reacts in negative way, then that is also additional information to consider. It's truly a moment of practicing striking a balance between the brain (planning) and heart (emotions)!

In a survey cited, 20% of over 1,500 participants who managed their finances separately from their partner stated they:
- Didn't know anything about their partner's retirement savings
-Had no idea what their partner's credit score was
-Didn't share a major financial account with their partner
-Weren't sure if their partner had any debt
-Were hesitant to share their own salary and financial information with their partner
(source: https://www.forbes.com/sites/riankadorsainvil/2019/08/28/why-communicating-about-money-is-key-to-a-healthy-relationship-and-financial-future/#166e818749b8)

Whether you are in a committed relationship or not, it's good to keep some ideas and questions on the radar. There isn't a once-size-fits all approach. But having continuous conversations, checking back in with your partner, and re-evaluating your strategy together is a great start! In the process, you will learn so much more about your partner and how you can continue to grow together.

Topics to consider talking about with your partner:

1. Identifying values, goals, habits:
  • What type of major goals do each of us have? How might those goals change pre-marriage to post-marriage? How would we start planning for that financially?
  • Do each of us have any debts? If so, how much and what type of debt?
  • What are each of our net worth? Do you expect any changes in your potential earnings in the future?
  • How do you feel and what do you think about prenups?
  • What are our spending habits like? 
  • How might we compromise on both of our goals?
  • Do we want our kids to potentially go to private vs. public school?  
  • How do we want to get childcare? (i.e. private nanny, pre-school, etc).


2. How do you want to implement it:
  • Do we want to meet with a professional like tax accountant or financial planner to get financial counseling and impartial advice? (whether it's pre-marriage or during marriage)
  • Do we both want a joint bank account, separate accounts, or a combination of joint and separate accounts?
  • How much would each of you contribute to the joint and individual accounts? Should we try one method and change it later depending on the situation? (i.e. contribute according to % of income, certain $ amount, spending habits, changing goals)
  • How do we want to save for retirement? Pass on assets to family?
  • If we decide to do so, how can we save for kids' education?
  • How should we title our property?

3. Logistics:
  • Do we want to set aside time to meet once a month, once a week, etc. to talk about finances?
  • What topics do we want to cover in each meeting?
  • How do we want to separate out financial responsibilities? -i.e. who tracks budget, look at investment portfolio, pay bills, etc.
  • Do we want to find ways to establish transparency? (i.e. share passwords, use an app/program to track spending in all accounts, etc)

Hope this is will be a good start to your journey of self-reflection or your conversations with your partner!



Sources
https://www.businessinsider.com/divorce-money-issues-financial-relationship-couple-2019-7