Chocolates & Roses on One Condition

February 23, 2017

Three steps you and your partner can take to unpack that financial baggage

 

 

February, the month of love.  By now, the chocolates have been eaten, the flowers have wilted, and the apologies have been given for the less than romantic gift (that Dyson vacuum is awesome, but really?!).  

 

Were you the object of a loved one’s affection and the recipient of a proposal?  If so, did you respond with a conditional acceptance upon a mutual passing of a credit check? I realize this is unromantic and a complete downer, but you may want to consider it and here’s why.

 

The person you want to share your life with will have a huge influence on your financial security.  S/he may encourage you to save money on the little things, or persuade you to make a big purchase before you’re ready.  It could be worth millions on your net-worth sheet.

 

YOUR NEW ROMANTIC LIFE TOGETHER MAY FEEL INVINCIBLE, UNTIL YOUR COUSIN ASKS FOR A LOAN.

 

Or you need extensive surgeries after a double-dog dare, or your partner finds the best deal ever on eBay that will ONLY cost two months’ salary. For an unprepared couple one of these incidents can become the beginning of the end.

 

Just like in relationships we all have baggage.  Some of us have a carry-on and others bring a six-piece Louis Vuitton set.  

 

Couples who are married, living together, or thinking of taking that next step must discuss their financial baggage.  Better to unpack it now and deal with the uncomfortable feeling of complete exposure, than to be sitting next to your true love across from a mortgage loan officer awaiting to hear your fate.

 

MONEY REMAINS THE MAIN ISSUE THAT COUPLES FIGHT ABOUT.  

 

Multiple studies have shown that money accounts for more than half of couples’ arguments. The journal Family Relations found that conflicts about money are “pervasive, problematic, and remained unresolved”. 

 

A 2006 study on marital happiness showed that premarital financial education “was associated with higher levels of satisfaction and commitment in marriage and lower levels of conflict, and also reduced odds of divorce.”  

 

WHAT IF WE COULD REMOVE MONEY FROM THE LIST OF ITEMS WE FIGHT ABOUT?  

 

We could spend more time cherishing each other instead of dreading the “talk.” Here are three steps you and your significant other can take to unpack that financial baggage.

 

1.  UNZIP THAT BAGGAGE & HAVE FUN WITH YOUR MONEY TALK.  
 

Take it easy at first.  Pick a time when you’re both in a relaxed mood and keep it light.  Ponder questions like, “If you had a $1 million dollars what would you do with it?”  Or “What do you think about vacation?” Or “What would be the hardest thing to give up if you couldn’t afford it?”

 

Remember, this is pulling out the snorkel and cocktail dress, it’s light and carefree. There are no right or wrong answers here.  You’re getting to know your partner in a financial way and it takes time.  

 

2.  PULL OUT THAT GREAT SIGHT-SEEING OUTFIT.
 

Once you’ve had some fun and are done dreaming, get a little further into the suitcase. Just like sight-seeing in any new territory, pace yourself, pay attention to your partner, if things start getting heated take a break and come back to it later.  You’re on vacation and there’s no time schedule to keep.  

 

Talk about why money is important to you. Discuss long-term financial goals.  Explore what your parents did or did not teach you about spending and saving.  Discuss how much you might spend on big items, like your next vacation, car, home, or your children’s education.  Share how you feel about borrowing money.  Really get to know your surroundings and decide which areas you want to come back to visit. 

 

3.  IT’S TIME FOR THOSE WEEKEND WORK CLOTHES.  
 

Work clothes are meant to get dirty and messy.  You’ll have to work hard, organize storage space, dust off the furniture and use that new Dyson. The ultimate goal here is to discover what’s there, clean it up, and rearrange some furniture to make life comfortable and secure together.  

 

Questions to start asking are sensitive ones like your personal debts, assets, and credit histories.  You and your partner may also want to discuss very difficult situations, such as during a death or serious injury, who will be your beneficiaries? Who will be your health care proxy?

 

Working in your weekend grubbies will help reveal where your fundamental money values align or collide. You may have to realize the closet isn’t going to get any bigger and you are going to have to embrace it.  

 

This may present itself as a hobby, such as music instruments.  He may insist on only wearing Italian leather shoes at $200 a pair.  Or she may have a strong conviction on giving to charity.  We all have boundaries, some are rational, some are imbedded in our money script from our past and they’re non-negotiable. 

 

You just have to decide together if you can work around them and make adjustments in other places.  The valuable part is knowing these issues before the potential conflict arises.

 

Before you finish unpacking that baggage let’s talk about a tour guide.  These conversations are hard and complicated so why not seek out a guide.  

 

MONEY IS PERSONAL AND EMOTIONAL, AND A NEUTRAL THIRD PARTY CAN BE A GREAT ASSET TO ANY RELATIONSHIP.  

 

Finding someone who can help look at things analytically can really help you make a spending plan based on shared goals and beliefs. It can help you build your financial security. For an initial trip itinerary, contact us at info@districtcapitalmanagment.com.

 

Now it’s time to finish unpacking.  Pull out those jammies, relax on the couch, enjoy the last few chocolates and admire all the unpacking of baggage you have done towards a financially secure future.

 

To learn more, try these good reads:

 

The Couples Guide to Love and Money by Jonathan Rich

 

The Secret Meaning of Money by Cloé Madanes

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