Mixing Money and Marriage
Knowing how much your spouse earns might seem like a “no-brainer,” but a surprising number of people apparently have no idea, said Jean Chatzky in Fortune.com. A study by Fidelity Investments found that nearly 4 in 10 couples can’t answer the question; another 1 in 10 were off by $25,000 or more. Couples didn’t fare much better on other personal-finance topics. One-third disagreed about the amount of their assets, and nearly half couldn’t agree on how much they would need to save for retirement. “Why the disconnect?” Some of the cluelessness can be explained by the rise of freelancing and project-based work that makes incomes unpredictable. But clearly, a lot of couples aren’t having the Money Conversation.
“The hardest part is simply getting started,” said Kerri Anne Renzulli in Time.com. Money is near the top of the list of topics we’d rather avoid, outranking even death in a 2014 survey by Northwestern Mutual. To ease into the talk, try asking your partner about someone else’s financial situation or pose a hypothetical question; both are good ways to gauge your partner’s financial priorities without being confrontational. The first step to getting on the same page financially is “basic transparency,” said Chris Taylor in Reuters.com. Establish a joint bank account to handle everyday expenses and bills, and go over your joint of you contributes. For the most difficult topics, a financial planner or coach can help broach issues you’re not comfortable bringing up on your own.
“If couples can’t communicate effectively about their finances, it can jeopardize their ability to reach their financial goals together,” said Taylor Schulte in The Wall Street Journal. In too many marriages, one spouse handles all of the family’s finances while the other “is essentially in the dark.” Couples should set aside serious time at least once a year for a “financial round table,” an organized review of the household balance sheet and cash flow.
But there is a wrong time and place to talk about money, said Carl Richards in The New York Times: when you’re already angry, upset, or emotionally low. Then even opening a credit card bill can “lead to World War III.” If a money conversation is headed south, “stop it—immediately.” A small break or good night’s sleep will restore your energy to focus on possibilities, not obstacles. Better yet, get into a routine of having regular, thoughtful discussions about money when you’re both in a good frame of mind. “Stopping a conversation before it turns into a fight could be the best money decision you ever make.”
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