Since Money is one of the top reasons why marriages break up to begin with, it's time we put a stop to these uncomfortable conversations and take back our loving, supportive relationships!
Carlos and I are so passionate about couples talking about their finances openly. When we get into our finance-speak in public – whether it’s discussing our food budget or how we invest our money - some people are either offended by it or pleasantly surprised that we’re so open about everything. I guess to us, it’s just so second nature to talk about our finances that we don’t make a big deal about it.
Some are probably thinking, “Well, easy for you to say, you don’t have any big financial burdens!”
Yes, and we’re very fortunate that we’ve been in a good situation. But if we were in less-than-desirable times financially (knock-on-wood), the fact that we are so used to discussing how to handle our money, I’m confident that we will be able to brain-storm and find a solution to the problem easily.
“But how do we get from not discussing our money to being OPEN about discussing our money?”
Well, that’s a wonderful question. Now, let’s talk about Money!
At the root of talking about money is Communication. As a couple, you’re only as good as your ability to communicate through your differences. As with all things, getting on the same page is the key.
The 5 Steps to a more Financially-Fit Relationship:
1. Individually write down all the important financial goals that you have, both short-term and long-term.
It’s important to do this separately at first because it’s good to know what each one of you comes up with. You might just be surprised at how similar or how different your goals are. Some of these goals might include:
- buying a car
- saving for a down payment on a house
- traveling to Europe for your anniversary
- starting an investment account for retirement
2. Talk about why each one of your goals is important to you.
For example, Carlos is passionate about his music, so one of his goals is to build a home studio to record music that he's producing. Of course, that’s going to cost thousands of dollars to make it happen, but because I know how important this is to him creatively, I support it. We just have to come up with a clear plan of how to make it happen without sacrificing our other priorities.
This step is critical in your financial relationship. Getting a deep understanding of what motivates and drives your partner is a great thing. You can help each other achieve your financial goals – no matter how big or small they are. I don’t know about you, but I’d rather be saving and working towards something that I know Carlos and I want instead of going through the motions feeling like I’m not really making a difference one way or the other.
3. Talk about what’s getting in the way of achieving your goals.
In Sales & Marketing 101, this is what you call “sandwiching the negative”. You’ve just gone through all the things you want now and in the future, and naturally, your brain is just full of serotonin – “the happy chemicals”. Now it’s all about facing some of the things that are getting in the way of you achieving all the goals. Don’t worry, this is just a temporary un-happy conversation. But it is critical to lay all your cards on the table. You can’t move past to the really good place without first tackling these hurdles.
One of our big financial hurdles is our student loan debt. I remember when we finally had “the debt” conversation while on our Engaged Encounters retreat. All told, we had just over $37,000 left in student loan debt. (Thanks, UCLA!) It wasn’t the easiest conversation to have, but we were relieved to get it out of the way.
Other examples of things that you need to flesh out include:
- credit card/consumer debt
- delinquent payments
- car loans
- child support payments
- tax liens
- credit scores
4. Develop a strategy to tackle the challenges head on.
One of our favorite Paulo Coelho quotes is, “Thinking about the suffering is worse than the suffering itself.” If we just think about the problem, we often go towards the worst case scenario. But when we are actively coming up with solutions to deal with the problems, we are taking ownership our lives and finding a way to get to a better place. That’s a very empowering feeling!
Going back to our student loans - we knew that we had to prioritize paying this off in the most expedient time-frame possible. Since Carlos’ loans are a lot less than mine were, we came up with the plan to pay it off first. We diligently made sure to pay at least double what the minimum payment was every month. As luck would have it, we had a windfall of our work bonuses coming in on the same month! Wooo hooo! Instead of putting some of it towards savings (or blowing it off on a weekend in Vegas), we decided that we would put all of it towards knocking out Carlos’ debt. There’s something about paying off debt that feels so good and we knew that the sooner we knock it off, the better!
5. Don’t forget to celebrate the big and little victories along the way.
We felt so accomplished once we wiped out Carlos’ student loans. It was a great exercise in goal setting and discipline. Once we tackled the debt as a couple, we felt invincible. That’s the type of energy we want in our relationship – we know that we have each other’s back and we know we can do anything that we set your minds to if we can find a way to do it together!
This is the last piece of “sandwiching the negative”. This is when you celebrate each other for the real accomplishment that you just achieved. Wiping out debt (or any other financial hurdles) is a HUGE thing. Find a way to celebrate it – whether it’s going on a celebration date or having a movie night. Never underestimate the power of positive reinforcement. This will give you all the energy you need to make the bigger goals happen!
So how did the frugalweds celebrate wiping off Carlos' student loans? Well, we're a little unconventional in our celebrating, but we ultimately decided to roll over what we were paying towards Carlos' loans into our life insurance policies. It might not be a crazy way to celebrate, but being financially secure for our future is a huge goal for us. In a weird way, we could not have celebrated it any other way!
Finances can be a challenging part of anyone’s life. But if you break it down, piece by piece, you might just find that it could be a really rewarding part of your relationship. Once you’ve addressed all the other negative hurdles in your relationship, you can find time to plan for the really good things – like finally taking that trip to Europe that you’ve been dreaming about!
What steps have you taken to discuss your finances with your partner?
*Thank you to our friends over at CrazyMoneyCouple for inspiring this post!