Three Financial Conversation Starters to Improve Your Relationship in the New Year
Resolve to Level-Up Your Finances and Your Relationship in 2022Wednesday, 29 December 2021
Some of the most common New Year’s resolutions focus on the topics of love and money. Why not combine the two this year and resolve to have important financial conversations with your spouse or partner in order to strengthen both your relationship and your finances?
These discussions aren’t always easy, but they’re always worthwhile. Commit to making this important financial resolution and check out the three conversation starters for you and your significant other listed below.
Option #1: Make it About the Data
Statistically speaking, the American Psychological Association has collected data showing that 31% of adults say money causes conflict in their relationship. What’s more, 36% of couples who choose to divorce cite money problems as the main reason for the split. These numbers are disheartening, and possibly reason enough to encourage you and your partner to communicate more openly about money. However, Fidelity Investment’s 2021 Couples & Money Survey also showed that couples who make decisions about their finances together experience positive benefits. So, if you want to avoid becoming one of the negative statistics – and find yourself among the positive ones instead – tell your spouse or partner about this data.
Use these numbers as an opening to have a serious, honest conversation about how money might be affecting your relationship. Here are a few examples for talking points:
- · How does your current money situation, whatever it may be, make you feel?
- · What do you like and dislike about your partner’s approach to money?
- · How would you both like to improve your money partnership?
These talking points probably require a bit of forethought, so it may be best to schedule a time to have this conversation when you’ve both been able to prepare.
Option #2: Discuss ‘Big Picture’ Plans
Financial conversations can feel dry and boring when they’re all about monthly budgeting and cash flows. That’s probably one reason why so many couples fail to discuss small daily money decisions, like whether to order dinner or how much to spend on a birthday gift for a family member. However, these seemingly insignificant decisions compound over time, meaning they have serious power to influence your quality of life and financial fitness in the future.
So, if you and your significant other dread “boring” money conversations, try to change your mindset by focusing on the big picture of your financial future together. Want that dream retirement? Great – now sit down and discuss the six pieces of your unique financial puzzle that are necessary to make your big dreams a reality:
- · Income – What are the key sources you have in place?
- · Expenses – What is essential and what is discretionary?
- · Investments – Do you have an asset allocation strategy in place to support your goals?
- · Insurance – Do you both have sufficient life insurance? What about disability or long-term care?
- · Debt – Do you mostly have ‘good’ debt like a mortgage or ‘bad’ debt like credit cards? What’s your strategy to tackle it?
- · Other Financial Obligations – Do you have children, grandchildren, or other dependents to consider in your financial planning?
As you discuss these six pieces of your financial puzzle, consider which parts you share and which you have kept separate. Does your strategy still make sense? Do you both fully understand what you need to do with respect to savings or insurance to support your joint financial and life dreams?
This conversation can be a long one, but it doesn’t have to take place all at once. If you feel yourselves getting lost in the details or having trouble focusing, take a step back and remind yourselves of what you’re working toward. Maybe it’s a vacation home in your favorite city. Maybe it’s the ability to retire early and travel. Whatever your dreams are, let them lead you forward together and keep you both engaged in this important conversation.
Option #3: Have a ‘W’ Conversation
When it comes to all aspects of your finances, including both short-term and long-term goals, do you both know what you’re responsible for? Clarifying the ‘who’ and the ‘what’ of your joint financial strategy is important, especially because life changes all the time. Discuss the ownership of your household expenses. Delegate accountability over small and large goals. Reassess your savings strategy. In short, make sure that your joint and individual efforts are covering all the necessary bases. Further, get clear on the ‘where’ by making sure you each have an understanding of the full picture. For example, one of you may be responsible for making monthly contributions to a Roth IRA designed to support you in retirement, but you should both know where the account details are so you can log into the account and view your portfolio’s performance.
If there are issues of trust or past irresponsibility around money in your relationship, the ‘W’ conversation is a good way to check in with one another to ensure you’re both meeting your financial responsibilities. Frame the discussion as a way to ensure you’re truly moving forward together as a team to accomplish your goals. Make it a point to celebrate your progress, too, rather than just pointing out areas where improvement is needed.
Final Thoughts on Resolving to Discuss Money as a Couple
Money is a complex topic, and relationships can be complex, too. So, if the idea of having a financial discussion with your significant other fills you with anxiety or makes you feel vulnerable, remember all the benefits that await you once you start communicating more openly.
Couples who discuss finances together tend to have healthier finances and healthier relationships. Resolve to have the important money discussions with your spouse or partner in the New Year and watch both areas of your life flourish.
For more tips on having money discussions with your loved ones, check out these episodes of my podcast, Flourish Financially with Kathy Longo:
- Episode 4: Your Spouse and Money
- Episode 6: Money Roles and Rules
- Episode 18: Money and Marriage
- Episode 38: Using the TALK Method for Family Money Discussions
- Episode 46: Money Talks with Your Aging Parents