Forethought Planning Podcast

Ep 81: How To Have a Conversation With Your Partner About Money

February 15, 2022 Shannon Foreman Season 1 Episode 81
Forethought Planning Podcast
Ep 81: How To Have a Conversation With Your Partner About Money
Show Notes Transcript

If you have a significant person in your life that you are romantically involved with, maybe it's your hubby, maybe it's your wife, maybe it's your partner, or maybe it's the person that you just adore and have spent your life with. But if something happened, you'll have that person's back financially. So how do you talk to them about money? It can be an incredibly uncomfortable conversation for some individuals who are romantically involved to bring up the conversation around money. However, it's kind of important. And money, as I say often, touches many aspects of our lives, but especially our relationships, and especially those we are romantically involved with. According to a study, 22% of failed marriages say that money is the issue of why they are getting divorced. Money does touch every aspect of our lives. And if we don't talk about it, or we aren't on the same page, or even in the same chapter, or even in the same book, it can be hard to move forward together. So on today's podcast, maybe you sit down with your partner, play this in the car on a road trip, or even on a date night, and have a conversation around what we are going to be talking about today.

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Securities offered through LPL Financial, a member of FINRA/SIPC. Advisory services offered through Advisors' Pride, a SEC registered investment advisor. LPL Financial, Advisors' Pride, Forethought Planning and the guests of Thrive For[e]ward podcast are separate and unaffiliated parties. Lisa Harris and Lisa Harris & Co are not affiliated with Forethought Planning, Advisor's Pride, or LPL Financial. The views expressed here are those of the participants, and not those of Forethought Planning, Advisor's Pride, or LPL financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. LPL Financial and Forethought Planning do not offer legal services.   

Shannon Foreman  0:01  
Well, hello there friends, Today is February 15. And yesterday, we celebrated Valentine's Day. Well, many of us did. If you have a significant person in your life that you are romantically involved with, it's your boom, maybe it's your hobby, maybe it's your wife, maybe it's your partner, maybe it's the person that you just adore and have spent your life with, aside from any title. But if something happened, you're gonna have that person's back financially. So how do you talk to them about money, it can be an incredibly uncomfortable conversation for some individuals who are romantically involved to bring up the conversation around money. However, it's kind of important. And money, as I say often touches many aspects of our lives, but especially our relationships, and especially those we are romantically involved with. That being said, According to the Institute for divorce financial analysts, 22% of marriages, actually list out that money is the issue of why they are getting divorced 22% Actually, specifically, say that many others might not say that, it might be the root problem of what actually does end up stirring other problems within relationships that could be sourced in other areas, because money does touch every one of our aspects of our lives. And if we don't talk about it, or we aren't on the same page, or even in the same chapter, or even in the same book, it can be hard to move forward together. So on today's podcast, maybe you sit down with your partner, play this in the car on a road trip, hey, that's on a date night, have a conversation around what we are going to be talking about today, and how you start that conversation, and why it's so important to do so.

Shannon Foreman  2:04  
A Fidelity Investments, retirement survey from 2021 asked couples for their best piece of advice for newlyweds. And they came up with a couple of different responses. However, the top two responses were not to take on more debt than you have to save for retirement as early as possible, and tied with make all financial decisions together. So today, we're gonna talk a little bit about well, how do you start those conversation was what are the things that are important? Maybe you've been together for a long time, maybe one of you takes the lead when it comes to finances? Why is it so important? I'm gonna have you start in a different capacity as I do in a lot of things in life. I think that if we don't deal with the stories that we have behind things, or the behaviors that we have, a lot of the strategy that we're going to talk about, makes it really hard to let go. So I have spent a lot of times with clients, both individual and couples in romantic relationship with each other for short periods of time. And decades, upon decades of time together. And those conversations and the people that take a lead in the house can change, I will be honest with you, a lot of my clients, actually the women in the household, have a tendency to take the lead in the financial aspect of things that are definitely the inverse of that in some relationships. But every woman that I sit down with is very curious in learning more, or is the one that is taking the lead in the household. It's very rare that I have to pull teeth to get somebody to want to talk about it. And part of it is we start with the behavior aspect of things. Each one of us comes to the table with a different story. What does that mean, Shannon, each one of us learned something different about money. So for instance, I grew up in a household where there wasn't a lot of money. I think I've shared this with you many times if you're a regular podcast listener, but if you're just tuning in for this first episode, I grew up in a two parent household for the first part of my life. And then my parents split up. And my dad had a very different view on people with money or what money look like. And he did not have a healthy behavior or relationship with money. Much of that happen because of his child hood and his experience with money that then spun into my relationship with money and how I felt like I wasn't very deserving of having it. And that if I had it, maybe I wasn't going to do the right things with it. And maybe I was a bad person if I had money and realizing throughout my career that that just isn't necessarily the case. Allow me to rewrite my story because of wonderful clients that I've worked with and people in the industry I've been surrounded with, allow me to rewrite Some of that own story for myself, because yes, even though I provide advice to clients and financial planning doesn't mean that I've always got my story together either. I've got to be able to do the work too. And so I have, I have my done my money, story work. And now very much so know what I'm worthy of what my family's worthy of what we want to be able to give to the world, and help others understand their worth. Now, my husband grew up in a completely different atmosphere around money. Now, his parents both worked really hard, not that my parents didn't, my parents worked hard as well. But his parents worked really hard. They saved, there was definitely an element there that was taught to them about saving, and spending. When we come to the table, I didn't really have parents that helped me out a ton financially. Jim had parents who were the ones that showed up to hockey games, and we're there, and we're cheering him on and buying them new hockey stick and doing all the things that he needed to do. I knew that there might be financial stipulations to things that I had to do. And so I always looked for other opportunities for finances to be absorbed in my household. Those were all situations that we were taught many times I hear the story of, oh, well, when I was growing up, I always saw my mom like hide bags, when she would come back from shopping, because she didn't want my dad to know that she was spending money. Or my parents told me there wasn't any money, and that we had to live in pinch pennies, and then they passed away, and I found out they had all this money saved up. And they didn't spend it or didn't do anything with it. So all of these different things can lead to what our own personal relationship was with money. And unless we've actually yes, kind of therapeutically dealt with it, where we literally said, okay, here are the things that I learned outrightly growing up about money, here are the things that I kind of subconsciously learned in my household. And here are the things that I feel like society has told me, we aren't going to start to understand things. And each spouse or partner is going to come to the table with a different set of those views. So you too, need to sit down and do that work, split a piece of paper into four quadrants quietly by yourselves go off and look at what was it that you were taught by your family? Like outrighted? Lee, what were the words that were said? What were the, you know, things that you heard growing up? Then what was the some of the subconscious things that maybe you were taught by your your family, or the culture that you grew up in? And then what was it that society has portrayed on you? So many times I talk about this especially geared towards women, we haven't always been shared along to understand that saving, investing, giving growing wealth is something that women can do. But we definitely can and are definitely doing that and going to transform the wealth arena. Just you wait and see. That being said, on the other side, men have historically been told that they have to be the provider, and they have to be the one that's out there earning the paycheck. Well, I mean, I think some of that language is probably changed a little bit, especially in the foreman household. Jim actually super kills that as a stay at home dad, now that our kids have been quarantined for a few weeks. He does have a full time job, but I'm just saying he's really good at making lunches and making sure kids are doing their homework. So Hmm, that process there. We have gender standards. So not only what was it that you learned in your household, from your culture, but also from society, both inherently right at least said to you, but also subconsciously, what were those things? Do that activity separately? Leave that fourth box? Separate? Then you're going to come back together and start to form? What is it that you want to experience together? What are the things that you liked about money? What are the things you worry about money?

Shannon Foreman  9:24  
What are the things you dream you wish you could be able to do? What are the things that are realistic? What are those things that you know in every day to day life are the things that you want to be able to do? What you're doing then is coming together and rewriting your money story together. Now, in order to do this activity, I need you both to let go. You need to let go of anything that has come before you in your relationship with money, both each other and individually. Per Perhaps you're doing this and you've been married for 10 years, and you've not established a good relationship with money or had some of these conversations, right? So, going forward, this isn't an element of pointing fingers and saying, Well, you do this or you do that. It's about rewriting things. Once you have established that basis of what it is that's important to you, and how you want to execute, on what we refer to as your wealth vision, now you've rewritten that story, you can start to execute on some of the strategy together. But if you don't have a good understanding of what each of you intrinsically wants, what deep down inside Do the two of you want to form together? Well, you're just throwing darts at a dartboard, and it isn't going to work. And I don't want you to be a part of those 22% of individuals who just maybe don't ever talk about money, and then it becomes an argument and then it deletes two really expensive attorneys. So take the time, sit down, break your paper into four quadrants. Or if you need a lot to process, grab four different pieces of paper, there might be a lot that you need to process in this conversation. But do this activity first, before we go into some of the other resources and things that you can, should consider talking to your spouse about?

Shannon Foreman  11:22  
Okay, now that you've done that activity, and maybe even pause the podcast, and did it live, while we were doing this conversation are you are listening to this podcast? Now I need to talk about behaviors. And really realize, again, look inside ourselves, not at the other person, this is an activity where you need to look into yourself and not point fingers. What is it that you are doing? And how do you operate with money? So are you a spender? Are you saver? Are you somebody that emotionally spends? What are some of the triggers for you, when it comes to money? Start to think about the behaviors that have developed from your previous life, and how you're going to rewrite them. What do you need from your partner in terms of accountability? Are you somebody that emotionally spends Are you somebody that spends when you're up late at night, and maybe you're getting served some ads on social media? Or are you you know, doing things where you're maybe aggressively saving and feeling like you can't ever have any fun in life, too, there are two extremes to things and we can find a middle ground. So after you've kind of dealt with some of those behaviors, you're able to come back to that conversation again, and tell each other what you need from each other. Again, separating out who's pointing fingers at Hope. Once you've dealt with your money stories, and your behaviors, we can start to get to some of the more strategic things that are important as well. A lot of times in different households, we are going to have debt. This is like the big purple, pink elephant, whatever color you want to assign to sad elephant that we don't necessarily always talk about, maybe it's student loan debt, maybe it's a mortgage, maybe it's debts, credit card debt, maybe it's a car loan, maybe it's business debt, there might be debts out there. And we've got to roll back, pull back the awning or the curtain and be honest with each other, maybe you manage your finances separately, totally fine. You can manage your day to day finances separately and still have an open communication about where you're at. If you're married, you should still understand where each other is at from a financial standpoint, so that you're not getting yourself in any troubles. Because if something happens to the other, likely the other person is going to be responsible for it. So you need to make sure that you have a good understanding of what's happening. So debt, what what is happening with it? What are you doing to repay that? How are you going to create a plan around it so that you're not achieving more of it? For instance, if it is credit card debt, then that's revolving and chances are that it's starting to if you're spending more on the same credit card, you're not making much leeway interest rates are high on those types of things. So if you're making a small payment, it might not meet making any leeway. And sometimes you can sit down with a you know credit counselor, you can sit down with a banker, financial advisor, someone who can provide you guidance on the best way to repay that and what is the smart way to do it like are you going to pay the highest balance first? Are you going to pay the highest interest rate first? What makes sense for you and your behaviors again, with money? How do you feel like you're achieving something? And if you need some of that accountability from your loved one, how do you want to receive it? What is the best way for you to receive those things? Another piece of the strategy types of things is that income might be misplaced in a household. So one person might make more than the other responsibilities might lie differently in a household, perhaps one of you stays home and takes care of the children, which, by the way, I think that that's an unpaid position, and you get paid. And then one of you is working outside of the home. Or maybe, you know, one of you is an executive type level, and the other one is a director, but you still have imbalances there, it's important to understand what are some of those emotions that go with things. So, um, I was gonna put Jim foreman on the spot when it comes to this podcast today. But he had a hard day with the kids. And he was like, I don't I don't want my brain to work right now. But we were going to talk a little bit about what does it mean, when we talk about that in our household, I once had a friend of ours tell me that because I was the financial breadwinner in our household that Jim felt less like a man. Mind you, Jim had never ever said anything like that. And

Shannon Foreman  16:15  
this friend was projecting his own insecurities on our marriage. In fact, don't really love to be a stay at home dad, he, if you ask Jim, he will tell you, he's counting the days of when he can be. Now he loves his job, his real estate and gives him a level of flexibility. But he also would like love to see my business grow. He's my biggest cheerleader, he has never been one to compare what his paycheck is to my paycheck or feel less than he wants to bring money to the table, he wants to make sure that he's an active part of our household, and definitely has been that. For instance, when I've taken big wild chances in my careers, like starting my own business and leaving something he's provided that level of stability in our household. And so you need to have those conversations that might feel a little uncomfortable, but like what is the emotional attachment to the things that produce income for your household and the responsibilities. For instance, I've also had individuals who have, you know, one, one of the parties is staying at home and raising the children. And the other party is out working outside of the household, or in the basement, like many of us are working nowadays, due to, you know, time constraints, and we're constraints and that going back to the office, that means said, there can be guilt lying in, in each situation. I've had the non working spouse who non working spouse who's raising children, very much still a working spouse, she's working in a different capacity, can we please clarify that? The the home working raising children a hardest job in the world, individual say that they feel, um, valuable in their household because they aren't bringing an income in. And that can hurt. So how do you level that off? How do you establish within your relationships, the element of no guilt associated by the income that's coming into your household? And maybe you still keep finances separate? But one person is taking care of the household? Then what is the other person's responsibility? So how are you mate making those key pieces of communication open? So throughout this whole conversation, what do you think the key element is, when it comes to having these conversations? It's having them it's simply communicating, and being able to talk about what is the things that are happening in the past or happen to you affecting the behaviors that you have? And the feelings that are associated with some of the things that are happening from a debt standpoint, from an income standpoint, from a saving standpoint, from an investment standpoint? What are your concerns? What are your goals? How do you have those conversations, and what I find very frequently, is when you bring a partner into the room, like a third party, and you express to that individual, what you want to be able to talk to your spouse or partner about, sometimes it's easier to have other person deliver some of those messages. How can you start to take on these conversations with a partner that and then when you had that first conversation with someone else in the room, it becomes a little bit easier as you get home and you can talk about things in a more, you know, relaxed atmosphere, although I would hope that anybody that comes to my office feels a relaxed atmosphere when we're talking about these things, but still to that point of being able to kind of just ripped that base they'd off with somebody else and start the conversation. So the last piece that I'll talk about is again, just clearly communicating what everyone's roles are. So a lot of times we have, you know, day to day finances that need to happen and long term finances. And in fact, a lot of times I get asked, what is it that we should be prioritizing? Well, both, and you're gonna hear me say that a lot, both, and you need to try to prioritize both. So for instance, in our household, we can't both do everything, we kind of need to be able to one of us each have one, have a responsibility, and then communicate going forward. So we, Jim handles the day to day expenses, paying the bills, making sure things are paid on time, and making sure you know, we've got the cash flow and the bank account and, and letting me know, like where we are at right. I also check things on a pretty regular basis. But I trust Tim, to make the payments and elect things. And if I have questions, I'll ask, but we've established that relationship, we've tried many different things throughout our, you know, over a decade of being together. And this seems to be the piece that works the most. That being said, it's always a work in progress and life changes. And you need to make sure that you have that constant communication to touch base with and see who needs to be doing what that being said, the long term peace, investing, saving, goal planning for the future, guess who that relies on? Well, just so happens, it's kind of my profession. So I do it. But one of you might have an interest over the other. But I wouldn't say put all of that on one person, be able to divvy up responsibilities so that people understand in your relationship, who is who be very deliberate. Maybe it's even creating a spreadsheet of who's responsible for what, or maybe it's sitting down and having a weekly conversation with each other, to understand what's going into what's coming out.

Shannon Foreman  22:04  
When I say what is going in and what is coming out, I mean income and expenses. And maybe you start that conversation there. Because everything that you're doing when from a long term saving investing standpoint is going to be reflected either on your pay stubs or in your bank account. And so you can have those conversations. And yes, I said weekly, because much like dating each other, you should be dating your money. And I say that a lot to people who are in relationships with another individual. And individuals who are in relationship with themselves, you should always be in relationship with your money. And by doing that, you need to date it. And so doing that date means making sure that it happens on a regular basis. If you do that, then maybe next time your actual date night isn't surrounded with the logistics of what life is. Because if you're running around crazy with life, and you sit down for that one date, a month or one date every year, depending on where you're at. You don't want to spend that time talking about like, Hey, where are all the bills being paid what needs to be going on, take that 10 minutes every I don't know, Sunday, and decide that you're going to sit down and have that conversation about what is happening in your financial situation. And if you've done the homework, like I asked you to at the beginning of this podcast, and establish what your wealth vision is with each other, then that conversation becomes a little bit easier. If you've had the conversation about the behaviors, and maybe what you need help holding each other accountable to end where everything is at, then that weekly conversation doesn't become again, and never should be a pointing fingers type of mentality. It should be a collaborative, strong, good clear communication type of conversation. What does that look like? Looking at your bills, what you're saving? What you're investing? What debt you're repaying, right. What else is needs to be a conversation? Is the income part of it? Is there an element of getting to the point of your wealth vision that maybe one of you needs to be making more income? Or both of you? Is there an opportunity for you to do that side note, we have an episode talking about just that asking for a raise and researching that on our money on our on your mind segment. So if you want to tune into that you can as well. But being able to have these regular conversations will allow you to see what's happening. And just like so many other things, it has to become a behavior, something that you're used to doing. And then maybe it doesn't have to be every week, maybe it's a once a month type of thing. For instance, Jim and I don't sit down every week we used to or if we have a very specific financial goal that we're working towards, we do but now we know where we're at. And we can have some of those conversations. We also both know what we're looking for. We're also both in a place where A lot of things are set on autopilot. And we know that these things are happening. And we don't have to sit down every week and babysit them. But we might sit down once a month and say, Hey, here's where we're at, here's our check in, this is what we look like. In fact, as you start to build some of those goals, nothing's cooler than sitting down. Okay? Maybe not. Nothing's cooler, a lot of people think things are cooler. But I think this is cool. I love being able to share our net worth, there's a personal goal that I have that has extended to Jim, for us to reach by the time I'm the big four Oh, and I love to be able to show that progress of where we're at, and how close we are getting to that goal. It's fun. And it's exciting. You kind of think of it as you know, when you were in grade school, and they'd have like that thermostat for fundraising. And they'd like color it in for where you are at to goal for different things. That's what it feels like. And being able to celebrate things like paying down debt, getting a raise, being able to save the way you want to can be healthier conversations. And if you do the behavior work on the front side of things, it does make it easier, but sometimes you got to be able to do the self work, the self reflection, and have a very healthy conversation with the person that you love. Right? The person you love. So I say this to you in meaning that it doesn't have to be a conversation of attacking, or I don't know this, but lead from a place of love with each other, making sure that you're establishing a really great strong new foundation together. Whether it's your first year of marriage, or your 30th year of marriage, this can always be a conversation that you can use as a refresher, and it's never too late to start these types of conversations. And well, I shouldn't say it's never too late, because 22% of people do end up declaring that this is a part of the why their marriage ended. So maybe it is too late, if you haven't had these conversations, but I hope that it's not for maybe the next relationship that you have now you know, what you should be doing with that next person? On your first date? No, I'm kidding. Don't do this on your first day. But have these healthy conversations. So let's kind of walk through in recap what it is that I think you should do, if you haven't done this already, and press pause during this actual podcast, although that would be kind of cool if you did. So first things first, you both need to sit down and write out your money story. Remember the four quadrants? If not, you can fast forward back and replay it and listen to it, then you need to think about what is it that has created behaviors for myself? How do I act with money?

Shannon Foreman  27:53  
What are the things that are healthy? What are the things that I would love to be able to improve on? And how does accountability look like for me, not what somebody else wants to give me in terms of accountability, but how does it look like for me? And then you're going to take those things and rewrite that wealth vision together? From there, then you can start to implement the strategies like maybe it's better understanding where debt is where income is, what are the emotions that are associated with those things? How are you maybe going to ask for a raise? When is it that you guys are going to sit down and have what many in our industry refer to as a money date, so that you can create that healthy conversation around money. If there is, as I talked earlier, an opportunity to bring in someone else for you. Maybe it's your financial advisor, maybe you're in search for a financial advisor, we love to be able to assist you at forethought planning, if you need that third party to sit down and help have some of these behavioral conversations, because maybe you're just afraid of how it's going to sit. Well then employing a financial advisor might be specifically somebody who's very passionate about behavioral finance is something that should be on your checklist. And having that conversation I'm sitting down with your partner. And doing that can simply be like, Hey, I think it's time that we have a healthier relationship with money. What would you think about having somebody help us have that conversation, so that neither one of us feels like the other one is attacking or is negative or doesn't feel good about the conversation, but in fact, we come together and feel really great at the end of it. That could just simply be the start of the conversation. And if you're ready to do that, simply go to forethought. backslash wealth assessment, and we will absolutely love to sit down with you and have a conversation about the two of you having a better relationship with your money. because you are both worthy of well. The views expressed here are those of the participants and not those of forethought planning advisors, pride or LPL. Financial all investing involves risk including loss of principle. No strategy assures success or protects against loss securities are offered through LPL. Financial and member of FINRA and SIPC advisory services offered through advisors pride and SEC registered investment advisor LPL Financial Advisors pride forethought planning and the guests of the Thrive Forward podcast are separate and unaffiliated parties

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