Transcriber: zoe chen Reviewer: Anna Sobota
Have you ever tried talking to your partner about money?
How did that argument go?
(Laughter)
And exactly how many glasses of wine did you need to relax?
(Laughter)
At home we tend to talk more about sports and celebrities
than we do money and personal finance.
Money is such a taboo subject.
We tend to avoid it to prevent arguments and feelings of shame and resentment.
At the holidays we know
we’re never supposed to talk about sex, politics or money at the dinner table.
Well, that is unless you’re in my family.
(Laughter)
Money is one of the leading causes of stress in relationships
and one of the top causes of divorce.
Stress from a breakup creates trickle-down effects in all areas of our lives,
impacting our health, our work and our kids.
For 23 years, I’ve worked with couples and their finances at all income levels,
and I've had a front row seat to see how money impacts relationships.
In fact, I’ll get a call weekly or so from a client that goes something like this,
“Hey, Meredith.
I know you’re not my therapist, but ...”
If you’re already talking about money with your partner
and it just hasn’t been working, you may be doing it incorrectly.
There are five things to consider
when discussing personal finances with your partner:
contribution, transparency, values, equality and vision.
Let me start by introducing you to my friend Nadia and John.
Nadia was the main earner in the household or the breadwinner.
And in 2019,
over 25% of married women outearned their male partners.
Congratulations, ladies.
Nadia was paying for a house cleaner and a nanny.
But here’s the deal. Nadia was resentful.
She was resentful of the fact
that she couldn’t spend more of her hard earned income on herself,
so she created a secret bank account.
And a point came when she needed to talk to her husband, John,
about staying at home with the kids while she worked.
But she was so hesitant to have this conversation
because of conventional gender roles.
But we have a choice in how we measure contribution.
Just because one partner might make more or less than the other,
there are some things that an income statement simply cannot measure.
For example, how much is it worth to you
to have your kids safely picked up from school?
And exactly how many loads of laundry are equivalent to an annual bonus?
I went to Georgia Tech
and I still haven’t figured out the mathematics on that one.
Nadia didn’t need a secret bank account
if there had been a more open and honest dialogue with their husband
around her need for personal expenses.
She could have initiated this conversation earlier.
So important that both partners have a truly honest conversation
about each other’s income, expenses, assets and debts,
and ideally, it’s done without judgement.
This allows both partners to share what they make
and what they spend without secrets.
Without transparency, trust breaks down
and it’s difficult to move towards a shared financial future.
Next, let me introduce you to Drew and Sophia.
Drew worked all during college and he paid for school himself.
Then, went on to get an MBA.
His wife, Sophia, had taken on some student loans
and she went to a local community college.
When it came time for them to send their kids to university,
Drew felt it was important that their kids work
and helped contribute some towards their own tuition.
But Sophia wanted their kids, and felt like,
they should pay for everything for them.
Ultimately, Sophia decided that since Drew had an MBA,
he knew better on this kind of thing.
Ladies don’t do that.
Values typically come into play when we talk about money.
Personal history and our own experience with money
greatly influences the things that we do.
Financial value decisions aren’t only derived from a cost benefit perspective,
but also from an emotional standpoint.
It’s critical that decisions like this are discussed early in the relationship
so that both partners are aligned.
Research tells us that the partner with greater income, education or age
tends to hold more financial power in a relationship.
But it's important that we create equality for both partners,
regardless of these factors.
Each partner's voice should be respected and acknowledged regularly.
Finally, I want to introduce you to Jordan and Riley.
Jordan has kids and went through a messy divorce.
She's now in a relationship with Riley, who also has kids.
Things were going well
and they were beginning to discuss marriage.
But they knew before they got married
they needed to have the big money conversation.
Jordan loves her kids and wants to leave them a financial legacy.
But it was important to Riley
that she have financial security or wouldn’t run out of money
in the event that they got divorced or if Jordan passed away.
Although they have different financial goals,
they still have a vision of a shared life together.
The vision is important
because then you and your partner can work backwards
to help meet everyone’s goals separately.
There are tools and methods for both partners to get what they want together.
What do you both want to plan for in the future?
You can still have a shared vision, but have separate goals.
There are ways to make both work.
A bigger money vision conversation is critical for everyone’s future,
financial and emotional protection.
And as uncomfortable as it may be, a shared financial vision is so important
in any long-term relationship.
Contribution, transparency, values, equality and vision
create better dialogues around money.
And actually talking about money fosters knowledge and experience,
which creates a happier relationship
and ultimately leads to greater financial success for both partners.
If you’re already talking about money with your partner
and just aren’t making the progress you want,
consider setting up a standing monthly meeting with both for both of you
to update your balance sheet, your cash flow statement, review expenses,
and consider integrating some of these topics that we’ve talked about:
contribution, transparency, values, equality and vision
into bigger, broader topics.
And in case you are wondering,
it’s perfectly okay to do this meeting with a bottle of wine too.
(Laughter)
(Applause)