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The importance of financial frankness in relationships

By Charlotte Wood

Seeing as my Clients share so much of their financial thoughts, feelings and information with me, it felt like high time that I did the same. So, I thought I’d start by sharing some details of how we manage our money as a family.

I feel very fortunate that my husband and I share similar views about our finances.

We were upfront about money matters from very early in our relationship; I distinctly remember him mentioning his salary in conversation on our second date. Not to show off or boast, but because he was incredibly open about it. I also recall being surprised by the timing of his revelation – I may have even said something along the lines of, “What? We’re not meant to talk about things like that yet!”

Funny, isn’t it? It felt uncomfortable to have someone being so honest about money, yet that’s what I recommend all my clients get into the habit of doing!

We’re often secretive about what we earn and what we own. It’s generally considered taboo or indiscrete to discuss how well we are doing financially or share our financial hardships. Perhaps it is a British thing – but I know I felt uneasy at the time, hearing a man I’d known only a short time share such personal financial information without knowing we would marry and become a family.

Retail ‘therapy’

Money can be both divisive and inclusive. And really when we get down to it, it’s not about pounds and pence, numbers on a spreadsheet or a bank statement – money signifies freedom and security. It can demonstrate love, status or power. We may use our money to show or deal with our emotions. The phrase ‘retail therapy’ may fill us with joy or dread, depending on our experience, perspective, and disposable income.

Personality and life experience often shape our attitudes toward money. Some people are natural savers, looking to the future and valuing self-sufficiency. Others are big spenders, taking pleasure in shopping and buying. The narrative of our childhood and our parent’s attitude to money will have influenced our own. We may take on the same limitations or be inspired by the aspiration of our early role models.

Money doesn’t grow on trees

Do you remember being told, “Money doesn’t grow on trees” if you asked for something? If you learned that money is a scarce resource, you might spend your life acting under this limiting belief system. It will feel intuitive and difficult to challenge.

Living with a partner who has a frivolous or self-indulgent attitude to money can, very quickly, have a significant, detrimental impact on our financial situation. Finding out that your life partner has been racking up debt can feel like a betrayal, perhaps as significant as physical infidelity. In extreme cases, financial fraud and financial abuse within a relationship can have devastating consequences.

One reason for the openness around money in my family is that my husband and I have financial job roles. We are also cautious individuals and can easily fall into a scarcity panic trap when anything unexpected happens. Through conversations with friends and family and my experience as a Financial Planner, I know that it’s rare for people to be so honest about their finances. I advocate for financial frankness in all family relationships.

A pragmatic approach

Many couples find it difficult to talk about their financial disagreements calmly and open-mindedly. Deeper issues, such as self-esteem and self-control, can weave themselves into conversations about bill paying, spending and saving.

Gauging your partner’s thoughts, feelings and attitude around money and debt early on in your relationship is incredibly important. I’m not suggesting you need a printed Experian credit score report hand-delivered on the second date! Financial difficulties are not always foreseeable and can be caused by challenging personal circumstances. Equally, reckless behaviours and failure to deal sensibly with debt should be a huge red flag. Of course, we know people fall on hard times and may have had to make difficult decisions and being pragmatic here isn’t about punishing or judging people who, through no fault of their own, face money worries. A balanced viewpoint is sensible.

Equally valuable

It’s okay to want financial security. By this, I don’t mean the expectation of ‘being looked after’ or relying on someone else to support our lifestyle – simply, that another person isn’t going to make decisions that will hurt our lives without our input. A significant part of finding and feeling that security is, in my opinion, transparency and understanding your financial situation as a couple.

Regardless of what we each earn in a month, my husband and I have the same amount of ‘fun’ money to spend how we wish, outside of our joint finances. We pay ourselves the same fixed amount of money monthly to our personal accounts, to do with as we please. He usually spends his on board games and nights out. I spend mine on coffee, cake and cocktails.

This financial arrangement recognises our individuality. We see ourselves as equal in our loving partnership. The contribution we each make to our family isn’t purely financial. Our solution feels truly equitable and limits arguments because we can be ourselves without judgement. Many family units have all their money in one pot and spend it from one pot. This may work for you but certainly wouldn’t work for us. Our financial arrangements give us the separation and autonomy we need while ensuring we can pay the bills and enjoy family life.

Communication is key

Communication is crucial to family dynamics in all ways, and of course this extends to money too.

Frank, open conversations about money are vital for building and maintaining a healthy relationship with your partner. They’re also a good way to model to our children what a healthy relationship with money can look like, and household accounting early on in their lives.

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