The following is a guest post that discusses the importance of talking about money. This is one of my favorite topics. My experience is that those couples who are able to discuss finances tend to be the strongest. Secrets about money lead to mistrust and big problems down the line. Let’s see what Shane has to say on the matter.
Anyone who has ever been in debt, or even just run a little short of money will tell you that being in that predicament caused them a lot of stress. We hear stories about people getting divorced over money. People even kill themselves over money. In many cases, talking to someone could have helped the situation. Whether it’s your partner, or a CERTIFIED FINANCIAL PLANNER™ Professional, like Neal, talking through the issues can bring resolutions and changes in habit that can make your financial situation better.
Talking about your money, and the money situation you are in is often difficult. The bad money habits we have are hard to admit to. And many of us are often afraid of what the person we are talking to will think of us. But, bad money habits, like so many other bad habits often require the aid and support of those around us to help us change.
Talking about Money with your Partner
Talking about money really should begin before your partner becomes your partner. When the talk during dates becomes more serious, and you start talking about weddings, kids, and houses with white picket fences is also the time when you should start discussing finances. Getting all of the details out about how each of you handle money can help eliminate any surprises when you’re beginning your life together.
Most people, however, never have that conversation. They move in to that nice new house, together, and suddenly find out that one of them is a shopaholic. Or has thousands of dollars of debt. That’s no way to start your lives together, but it happens everyday. Being open and honest after the bombshells may save your relationship.
Early discussions should establish how much debt each of you has, what you really make, and what goals/plans you have for your money. Should you keep separate accounts? Who’s debt should you pay off first? Is being debt free a goal you both share, or do one of you think having some debt is O.K.? Getting those details, making compromises, and creating a unified plan for your future is very important. After all, you’ve already dedicated yourselves to each other, this is only a small part of it. But, it can easily destroy the relationship if you don’t take care of it.
Talking about Money with a 3rd Party
Sometimes, even as single people, we need to discuss our money situation. We need a 3rd party to look at our finances with an unbiased eye, and help us to sort out the kinks in our plan. Even talking with a friend about your money can help. But, whomever you decide to talk to has to be someone that you’re willing to open up all of your finances to and share why you are where you are.
Most of us won’t want to get that intimate, financially, with our friends. That’s where an accountant, or, ideally, a financial planner comes in. Planners deal with personal finances all day, every day. If you’ve done it, they’ve likely seen it before. Once you’re books are out in the open, you and a planner can have an honest discussion about your habits, your goals, and where you need to make changes to obtain those goals.
Talking about Money Honestly
You should talk to your partner about your money. And you should talk to a good 3rd party that you trust about your money. But all the talking in the world won’t do you any good if you aren’t honest. If there’s anything that you hold back, or hide from either your partner or the 3rd party, it can completely derail all your efforts. You wouldn’t take off on a cross country drive without a full map, or fresh maps in your GPS, would you? You don’t want to take off on a financial drive without a full map either. If your partner is supposed to work with you to find a path that you both can be happy with, or if your 3rd party is supposed to help you design and follow that path, they can’t do it accurately without a clear picture of what your financial map looks like. Opening up your finances and being completely honest is the only way to provide that clear picture.
Have you ever been completely open and honest about your finances with a partner? With a 3rd party? Why? If not, isn’t it about time you were?
This was a guest post written by Shane Ede. He is a personal finance blogger who owns and writes Beating Broke, a blog that started as a journal of his journey to beating the condition we call broke. He writes regularly about debt, frugality, and saving money through smart money moves, like talking to your partner.