Transcript

Wiser Financial Advisor – Get Ready to Rumble. How Married Couples Can Avoid Fighting About Money

Hi everyone, welcome to the Wiser Financial advisor show with Josh Nelson where we get real, we get honest and we get clear about the financial world and your money. This is Josh Nelson, founder and CEO of Keystone Financial Services. Let the financial fun begin!

Today, our topic is going to be fun. It’s called Get Ready to Rumble, How Married Couples Can Avoid Fighting About Money, which is what I call helping you try to avoid fights about money. I’ve been in a lot of meetings, and believe me, over the years there have been meetings where I’ve wanted to crawl under my desk because things got so tense between a husband and a wife. According to Investopedia, this is the number one topic people fight about in marriage. Money! So it is worth talking about, because if we can take some tension out of the conversation and provide some kind of framework to move forward, this is key to having a better relationship.

Thanks for joining me today. Overall, the thing that we’re trying to do here is make better decisions about money. That’s what The Wiser Financial Advisor podcast is about: learning and gaining wisdom from people who have walked before us so that we don’t have to learn everything by trial and error. We can accelerate our progress by learning from other people. I’ve got 25 years in this industry now, which means I have tens of thousands of hours of experience working with people’s finances and seeing what works and what doesn’t. Also, you get the benefit of the people I’ve learned from.

The first thing I’m going to talk about today is understanding the root causes of why people fight about money. Ultimately it does come down to different values, different approaches, maybe different backgrounds. From a background standpoint, where did most of us learn about money? Probably our parents. While we were growing up we saw things, whether they taught us overtly or not. Out parents taught us either a good example of how to handle money, or they taught us a bad example. In a lot of cases, when we’ve talked to clients about their family financial backgrounds, they say, “You know, the reason why I’m so financially successful is that I saw how my mom and dad handled money and they just blew it. They didn’t do a good job saving or investing or managing debt. And so I resolved that I was never going to do that.”

Personally, I was lucky. Both of my parents were great examples, from an investing and a budgeting standpoint. So I’m very blessed to have had that, but not everybody has that example. What we learn as kids is not how we have to proceed, though. Certainly, lots of people had great examples, then turned out to make poor decisions themselves, and vice versa. At any rate, when you come into a relationship, you bring a basket of your own values and backgrounds and experiences. Values are important, because people may approach things differently as far as what should be done with money.

Building a solid financial foundation comes from having open communication. Unfortunately, this can go really negative. By the way, financial infidelity means that you’re hiding money from each other. It’s a concerted effort to actually hide money, hide spending, hide debt. After 25 years, I’ve seen it all, so I can tell you how important it is to have open communication. You want to not only make yourself understood, but seek to understand what the other person values and finds important. When it comes to a relationship on pretty much any topic, when you’re coming into it together, you’re deciding to be one. You go in one direction. And ultimately it does come down to compromising. It’s very unlikely that you’re always going to see things exactly the same way.

Certainly, Sarah and I do not always see things the same way. We love each other and we love our kids and we’re very committed to each other, but sometimes we don’t agree, right? We might see things from different perspectives. So it’s very important that both of you seek to understand each other. At least that’s a good foundation for making decisions going forward. It all comes down to having a shared vision, and sometimes that shared vision comes from compromise. If you were doing things completely on your own, you probably should have stayed single, right? If you’re coming into a relationship with another person, that means that you’re choosing to go forward together. That means setting goals, creating a budget, talking about how money is handled, how debt is handled, how estate documents are handled, how insurance and employee benefits and taxes are handled. And looking at all of those things together and coming up with a plan is not just a one-time thing. It’s an ongoing process because the rules change over time and your circumstances change.

Having some type of cadence for revisiting these things will bring many benefits. The more often you talk about them and the more often that you’re seeking to understand the other person’s point of view, the less likelihood there is for misunderstanding or for things blowing up. When there ends up being a major fight, things go downhill with money. We certainly don’t want things to go in that direction.

It’s about that solid foundation. But how do we come up with a plan? How do we move forward together effectively? Communicate means that you are checking in regularly with each other; you’re actively listening and avoiding blame. It helps to try not to say things like “You always…” or “You never…” Doing that means you’re attacking the other person. And the second somebody feels judged, they’re gonna shut down. That’s just the way we are as humans. If instead you’re using “I…” and “We…” and trying to understand from the other person’s perspective where they’re coming from, things will go more smoothly. Reflective listening means repeating back what the other person has said. That might seem really basic, but repeating back what you’re hearing from the other person will help. Then the other person feels heard. Sometimes, that is all that needs to happen. And of course, you want to be heard too. It goes both ways. Then you can highlight the areas where you have common ground. If there’s common ground, you can also highlight the value of compromise and the fact that, hey, you figured something out together here that you can both either be happy about or at least live with it and not have tension going forward. Sometimes we do have different opinions, different priorities—and that’s part of the package when you get married.

Another point is the fact that sometimes it’s important to be clear on boundaries and responsibilities as far as what people’s roles are in the relationship. What I’ve seen personally is that usually in any couple, one of the two people is more interested than the other in financial planning, investing, budgeting, debt, making tax decisions, and things like that. Usually one person is kind of the point person who takes care of the day-to-day budgeting and paying the bills. They keep track of the money and maybe the other person is a little more interested in the longer term planning. Both need to be on the same page so everybody’s clear about what’s happening, but dividing and conquering can be a useful thing when you’re coming together and forging a stronger foundation than you would have had on your own. Certainly, Sarah and I are stronger together than we would be on our own in lots of areas. That doesn’t mean we always agree. But having to work through tough stuff can make your relationship stronger than it was before. It’s helpful to divide out those tasks, in all the areas of financial planning: bill paying, budgeting, long-term financial planning encompasses lots of things like taxes, insurance, and estate planning. There are many different discussions that can come up and sometimes those can be tense, but that doesn’t mean it ends badly. In fact, in most cases people figure it out. We talk through it, and despite some tension we’re able to move forward and figure out a plan.

In most cases people do better with a coach. That’s why people like Tiger Woods and Phil Mickelson still have swing coaches. In fact, they have multiple coaches that they still work with, even though these are the best golfers in the world. They still have coaches because they realize that they cannot see themselves, regardless of technology and so forth. They spend a lot of money on cameras and things. They can dial in and measure everything that they’re doing. But sometimes it takes somebody else who’s able to give you a third party perspective, someone who cares about you and wants you to be successful. In this business, hopefully your coach is a fiduciary. Certainly at Keystone Financial Services, our fiduciaries have a vested interest in making sure that you’re successful. So they are going to be giving you advice that’s in your best interest, not their best interest. That really is the key. Use a Certified Financial Planner. That’s the gold standard in our industry. You don’t want an investment person that is just a product person or somebody selling insurance. Not to say any of those people are bad people, but really a Certified Financial Planner is like a head coach. They know what’s going on, they know the entire plan and they have a track record with hopefully a lot of years of working with people and knowing what works and what doesn’t.

I would strongly encourage you to work with a Certified Financial Planner, especially if you want to up your game. Maybe you want to get to a better place than you are right now and figure out what that next level is for you. I would recommend you sit down with a financial advisor or even a counselor. Yes, sometimes this gets to the level of going to a licensed therapist when it gets really emotional. Maybe financial infidelity has occurred. It could be that somebody has been hiding money or hiding debt. I’ve seen this happen over the years, and it’s devastating to the other person when they find out. And they will find out. Believe me, that’s not something that anyone is going to be able to hide forever. So, don’t hide stuff from your spouse, financially or otherwise. But if it has already happened, that probably means that a therapist needs to be brought in to help work things through. There’s been a breach of trust there.

Having experience helps a lot. We’ve seen it before. We have probably seen your situation, whatever it may be, and we know how people have been successful at working through it.

I’ll end here, but really it does come down to understanding each other so as to come up with a basis where you can say, “Hey, we agree on this and we’re moving forward on it.” Then putting a plan into place and using professionals as needed, people that you can bring on to your team to help you strengthen your relationship and achieve your shared financial goals.

Thank you for tuning in to the Wiser Financial Advisor podcast. We certainly appreciate it whenever you share these episodes with your friends, your family members, your co-workers. Also, if you could help us out by clicking subscribe on your favorite podcast service, whether that’s Spotify or Apple, wherever you’re listening to this so you stay up to date with our podcast episodes. When you give us a rating, that always helps us too.

If there’s anything we can do to help, we are here as a resource. We are located at www.keystonefinancial.com . You can e-mail us directly at communications@keystonefinancial.com if you’d like to have somebody reach out to you or schedule a time to talk.

Hope you have a great week and God bless.

The opinions voiced in the Wiser Financial Advisor show with host Josh Nelson are for general information only, and are not intended to provide specific information or recommendations for any individual. To determine what may be appropriate for you, consult your attorney, accountant, financial or tax advisor prior to investing. Investment advisory services offered through Keystone Financial Services, and SEC registered investment advisor.