Money has long been known to be a leading cause of stress in relationships — probably because, for so many couples, it’s a topic that’s off-limits. It is never talked about. But it is frequently argued about. 44% of couples see it as the most challenging topic to talk about, more challenging than death, politics and religion.
There are all sorts of reasons we avoid talking about it. Maybe you’re insecure about your own financial state and talking it over with your partner would force you to deal with the reality of a serious situation. Maybe you feel defensive about how much you earn or spend and just don’t want to start that conversation. It just feels icky to talk about. And it is so easy to trip and descend into an argument.
But the subject of money is just like everything else in your relationship: it all comes down to knowing how to communicate.
Determining your financial compatibility can only start with one thing — a conversation. No matter at what stage you are in your relationship, it’s never too late to start discussing money. Having an open approach to talking about money leads to better financial outcomes. Children from households that discuss money openly are less likely to have problems with impulse spending and have significantly less debt. The whole topic of money becomes demystified if you regularly talk about it.
There are 2 big conversations you need to have around family finances.
The first conversation is the typical budgeting and planning conversation. Are we living within our means? What budgets can we agree to? What do we want to spend our money on, what is important to us? Who is going to monitor our money and keep us within budget? It’s a straightforward conversation, but if you find yourself coming unstuck, see a budget advisor.
I am more interested in the second conversation, what are your deeply held beliefs around money? We are heavily influenced by the finances of our family of origin. How our parents spoke about money, thought about money, and treated money has an impact on how we do the same. This is part of the reason generational wealth and generational poverty exist. And our formal schooling contains very little financial advice, so we seldom have an opportunity to question those beliefs that we grew up with. It might be seen as ‘bad manners’ to talk about money with friends, so the cycle of not sharing information continues.
Increased financial stress and misunderstanding often comes with children. One parent cuts back their work commitments for a while, and the power balance shifts. A stay at home parent, or a part time working parent, suddenly can feel very exposed around money. They no longer have an independent income, they feel beholden to someone else for spending. “Look at how much we spend on groceries’ suddenly feels like a personal attack, and the defences come up.
Digging deeper into each of your beliefs around money can be illuminating. We all have inherited beliefs around money, that may be partly true, partly false, but that dictate what we do with our money every single day. But we are so comfortable in our beliefs, we don’t even realise they may be false, and our partner may have a completely opposing opinion.
So this is a really important conversation. Below are some common beliefs around money, some are partly true or false, some are completely true or false. It doesn’t matter, what is important is that you start talking about them, and compare where your beliefs are different.
How do you and your partner feel about the following statements? Discuss them in depth. You may not come out of the conversation with an agreed budget, but you will come out with a better understanding of your partner.
- Money is there to be spent, you don’t take it with you when you go
- Money is the root of all evil
- I have a responsibility to leave a financial legacy to my children
- Inheritance will spoil my children. I will give it all to charity
- It is only money, we shouldn’t spend too much time thinking about it. It can look after itself.
- Money shows the world how successful I am
- I can’t relax until I have $x put away
- I’m just not good with money
- People who think about money are shallow
- Money doesn’t buy happiness
- Wanting more money is selfish, shallow and greedy
- I am poorer than I want to be
- I can’t live a balanced life if I want to make a lot of money
- Every adult has a responsibility to earn money
- Financial dependence on your partner traps you
- To make money you have to take big risks
- I don’t deserve to have a lot of money
- If I have more money than I need, then someone else is going without
- I can’t manage money well, and that makes me useless
- If I am wealthy, people will judge me, and not like me
- To be a valuable person, I must earn my keep
- My role in this family is to provide money
- Never buy anything you don’t need
- I worry about how to fund my old age
- I don’t feel in control of my money
- Children should have jobs and earn their own money
- If I inherited money I would feel … (excited, ashamed, guilty, relieved etc)
- I feel in control of my money
- I feel out of control with money
- All our problems would be gone if we had more money
- It is hard to pursue money, without being consumed by it
- If I have a card declined at the cashier while shopping, I immediately feel … (embarrassed, annoyed, ashamed, scared, frustrated etc)
- If I won Lotto, the main thing I would change in my life is …
- I feel like I am judged for our finances, people think I am too … (rich, poor, lazy, greedy, ambitious, lucky, slack etc)
- My parents’ main beliefs around money were …
- Being tight with money is good / bad
- Too many people spend money they haven’t earned, to buy things they do not want, to impress people they do not like.
It is not a one-off conversation. You should keep returning to it. Learn what your beliefs are, and how they differ from your partners. Keep saying ‘that’s interesting’ and digging deeper, rather than judging one another. Keep learning about each other, and yourself. The aim of the conversation is not to create a budget, but to open up conversation flow, and start learning.