Finance! They are already complex enough as an individual and even harder when another person who has their independent ideas is involved. Given how personal and challenging it can be to make financial decisions on your own, it’s no surprise that working with a partner on this regard can be a lot more difficult.
Whether to combine, split, or share the funds – the system Amanda Clayman, a financial therapist based in Los Angeles calls the “one pot, two pot, three pot” method really depends on the best interest of you and your partner. Whichever you choose, there are five qualities that are important to maintaining a healthy relationship when it comes to making financial decisions, says Clayman
- Equality- Both partners should have an equal say in monetary decisions.
- Inclusivity- Both partners should be included; you can’t opt out or pushed out while making any
decisions. - Transparency- If there are any privacies like separate bank accounts or any boundaries that are
negotiated and understood - Flexibility- Be open to change and “change your money habits as needed.”
- Sustainability- whether your financial health is not overly dependent on 1 partner.
5 Actions to take as couple to form solid financial Decisions
1. Define your worth in money
These five qualities can serve as “guides to making sure you’re on the same page,” says Kleiman. Once you know the importance of these qualities, she says, “Here are five actionable tips to help you and your partner work towards those qualities.”
Seeking your worth around money- This includes your values in terms of how you make money, how you spend it, and how you interact with it.
Focus on revealing who you’re and what your financial goals are as opposed to what you think is wrong with your partner. Example- “It’s important to me that my money do XYZ”. Make sure that you address such values starting with word “I” as it shows personal ownership suggests Clayman.
2. Communicate
Talking about money matters can be difficult and even awkward. Clayman suggests implementing active listening techniques for those this doesn’t come naturally.
For instance, if your partner is talking you can summarise them what you think they had just said and ensure that they have completed their point and then you can talk suggests Clayman.
When engaging in Money talks it’s most important to do with a commitment to be disciplined in your speech, taking lead and responsibility for yourself and then listening to your partner’s point of view.
3. Make sure that you make a concrete ask for what’s important
According to Clayman, it’s really important to make stubborn ask for what’s really critical. However, you may not want to say something like “It’s really important to me that we save money” as it sounds too vague.
Instead “what I hope to do is save 2000 more per month”; suggests Clayman.
Even if you both agree to save it doesn’t mean you criticize every purchase that your partner makes. Money is something very emotional. When we “more savings” it often focuses on the typical part or the emotional part as savings feels good and makes you less anxious. However, this is necessarily not how your partner might take. So, it’s very important to make that feeling or value into something more concrete.
4. Compromise! Compromise! Compromise!
If you don’t agree with your partner’s idea of saving 2000 more per month analyse what your partner’s money is going towards. Attempt not to see at the circumstance in terms of what you’re giving up, either. Try to incorporate as many values as a couple in the process. It may come down to 1500 but think of it as giving to ourselves instead of thinking as what we lose.
5. Practice & keep track
It’s not a 1-time process. It’s not like you discuss once where, how and what we’re going to do with money, and it’s done.
This is more like a continuous work with your partner. There needs to be a regular follow-up regarding this to make sure that it’s conforming to the five principles mentioned earlier says Clayman. This is more like a base to ensure that such conversations are happening rather than running in the background without any attention.
It’s often important in the beginning to ensure monthly that the committed expenses & spending allocations are in adherence to you expected to be. This way we can analyse if there are any predictable changes. Make sure that you track periodic fluctuations that may come in.
Make sure that both the partners are involved in such conversations at least once a month. To make your monthly financial conversations enjoyable try a change of location suggests Clayman. For example if you go to a coffee shop and bring your computers and papers it could feel like a quality luxurious time together and relaxation.
