Money conversations can be difficult

This month we’re hearing from Jim…

Communication is a big piece in managing finances well together. “Best practice” in this area is periodic meetings with both partners at the table to discuss what are the priorities for giving, saving, and spending.

As I have worked with couples on this issue, the tension seems to be in how one person communicates to the other from an attitude perspective. Generally speaking, the “bookkeeper” or “saver” comes across as “lording it over” the “free spirit” or “spender.” (Sorry about all the quotation marks, but these are the terms I hear people assigning to their spouse, can you relate?) Many times, there is an attitude about one person’s perspective on money management that they believe is superior to the other person’s perspective, and it comes off in attitude, in body language, in facial expressions that offend their spouse. So how do you deal with this?

The best way to deal with it is;

to sit down together and decide what your long-term (i.e. retirement or late life-stage) goals for your finances are. These are serious discussions about your true beliefs, not whimsy. How do you want to live? What legacy do you want to leave? How will you take care of your family? Once this is agreed upon, and all points of view are valid in the beginning, you need to build a plan to take you there.

Now, building a spending plan each month to move you further along the road toward your goals becomes a bit easier. Every decision becomes a financial decision. Does the decision move you closer or further away from your goals? Inevitably, there will be some things that are out of your control and you will need to deal with them in the short term. This is why we encourage people to have an emergency fund. But generally, your spending decisions should be made each month to move you closer to your goals.

Here are a few simple steps to get you started:

1.      Determine your long-term goals

2.      Establish an emergency fund

3.      Pay off and stay out of debt

4.      Save for the future

5.      Give as much as you are able to help others (We like the 80-10-10 plan. Give 10% of your income, Save 10% of your income, live on the remaining 80%).

6.      Get help from wise counselors along the way

Remember, communication is as much about intent (feelings, attitude, expression) as it is content (what, why, how).

Lead on.