Money is a very crucial factor in a relationship. It is not just "a man's responsibility". Before and after marriage, women should not shy away from these discussions in the fear that it will project the wrong impression.
Dr Farah Usmani answered the question as to why women have not embraced financial management. Because they have bought into the narrative that has been fed to them. Women think they need to be good at math, or that it is unfeminine and impersonal to care about finances, and by showing interest in money, others will consider them greedy, shallow and opportunistic.
On this topic, one cannot ignore the brilliant insights of author and entrepreneur RAMIT SETHI, which I have reproduced below.
- UNDERSTAND THIS: You may be in love, but you may not agree about money.
Couples need not agree about money. In a marriage, one person would earn far more than the other. Or, one may spend more than the other. This is common. But there are other issues too.
I remember this Pakistani couple. The son was expected to pay for his parents’ wellbeing. They would just call him up and say, “We need you to send $5,000 over.” If you're approaching it from a Western perspective, you might think this is crazy. But anyone who has grown up in such a culture, understands the expectations and obligations.
When it comes to money, culture matters. Gender matters.
The good news is that you do not have to agree on everything when it comes to finances with your partner. For example, I like indulging myself at nice hotels but my wife does not really care about it as much as I do. That's OK. We can live our lives and live rich lives without us having to ever agree. There should be a way, though, where you can either reconcile the two or create some pretty clear boundaries. If one really wants to do that, then find a way to make that possible, at least occasionally. Come up with a joint process for what you both care about.
Too often, this is overlooked. It's neglected in the hope that it will work itself out over time. So couples sail through life, spending money, occasionally getting into fights about spending, papering over the fight, and then waiting for the next fight to occur. That's no way to live.
- WORK ON THIS: A shared vision on what makes a life rich.
A couple I recently spoke to were fighting over her overspending at Target. I'm talking about $50 in overspending, when they were on track to be multimillionaires. They had never considered that they could be rich. When I told her, “I've run your numbers. You're on track to be multimillionaires.” She said, “No, that can’t be.” I said, “Yeah, I'm looking at the math. You will be a millionaire.” And she was silent. She said, “Well, we're not rich.” I said, “You sure are. First of all, rich isn't just a number, but even with numbers you are.”
Their real issue is that they had no shared vision. No shared vision of what a rich life is.
What is your rich life? Most people never actually considered what that is. Almost 90% of the time, the answer is the same: “I want to do what I want, when I want.” I say, “OK, that sounds pretty good. What do you want?” And they go silent.
Often, I will find that one person who says, “That's a waste of money. We can't afford it.” I say, “How do you know that?” They just get silent. Because for a lot of people taking a vacation or enrolling your child in private school is not something they considered a reality when they were children. And so, they carry those same messages to their current self. What I want to do is look at their numbers and say, is that true? Can you actually afford it? If you truly can't, fine. Then, either make a plan so that you can afford it, and that could involve saving more, investing, earning more, negotiating your salary. Or it could involve saying we're not going to do that. But now we understand why.
I don't think that most people have vastly divergent goals. It's not that people have vastly diverging views on money. It's that they don't have a shared vision at all.
- START THE CONVERSATION: Ask the right questions, talk to a professional if need be.
We overlay these invisible scripts that we grew up with.
I recently had this couple where the young woman M, said, “I always expected a fairy tale-type of relationship. I expected the man to pay for me because I'm a woman.” Her boyfriend said, “I don't want that. I want something that's fair. I want a partner.”
They're approaching their financial lives from two totally different perspectives.
At one point, M said, “We should spend money proportionally.” She's earning less, so she should contribute less. I said, “OK, but one day, because of your job, you're going to earn more than he is. Will you still want to contribute proportionally?” She said, “No, 50-50 would be good.” At that point, I remained silent because each of them can draw their own conclusions.
In general, if there's one person in the relationship who is scarcity-minded or scarcity-oriented, it tends to be the woman. I have another example where the wife was hiding money from her husband. Turns out, her mom also did the same thing. So, a lot of times, we will find that these money attitudes and behaviours were passed down from parents. Invisible messages passed down in our culture about money and gender.
I remember a young woman who was very scarcity oriented. To her, safety meant being able to buy an apartment, be it Manhattan or Brooklyn, or anywhere. She obsessed over it.
I asked her why she would want to buy an apartment and pointed out the cost in various other ways. Turns out that her dad had lost his apartment in The Great Recession. The trauma that caused her to see her father lose their childhood home led her to conclude that, above all, she needed to own an apartment. “I want something that's mine.” When talking to me she finally made the connection between her obsessive need to own and why she actually felt that way.
My wife and I started talking about money after we got engaged. And it was extremely challenging. When we began having conversations about a prenup, we ended up seeing a therapist.
My learnings:
- I should have initiated these money conversations way earlier.
- Stop being Mr Spreadsheet. Talk about fears and hopes and dreams. Talk about what money really means to each of us. My wife wanted to feel safe and wanted to know that if anything went wrong, she would be taken care of. The numbers will follow.
Talk to each other. Ask questions: How did you grow up? How do you think about money? What word do you use to describe money? What makes you do that? Where did you learn that from? These are huge clues that tell us a lot about how we think about money. Take the help of a professional if need be.
The above information from has been taken from Ramit Sethi's interactions with Morningstar and Tim Ferriss.
Also Read:
Financial Infidelity: Cheating by any other name
7 myths regarding couples and money
