Who talks about money? I bounced off the title idea with a few friends and their reactions were along the same lines. Research shows that money is among the top 3 reasons for couples to fight, the other two being sex and their difference of opinion regarding raising kids. So why are we so averse to talk about money?
But think about it, if you have decided to take the plunge and commit yourself for a life of togetherness, this is a talk which will stand you in good stead. Knowing your would-be partner’s attitude and aspirations towards money and being comfortable in the fact that they are broadly similar to yours is something that you must take time out to check.
While we are taught complicated trigonometry formulas in school and college, there is absolutely nothing about personal finance ever taught in school. Most of us grew up never hearing our parents discuss money casually and hence are uncomfortable initiating these conversations. I have seen women go through hell, thanks to their spouses’ diametrically opposite outlooks towards money and their limited role in managing household finances.
A few years back, I got a distress call from a young woman, couple of months into her marriage. She was bright, very well read and was doing extremely well in her job. While her partner was of a similar profile and their families were also of the same background, they couldn’t see eye-to-eye on money matters.
He believed that he would take all the decisions regarding money and did not feel the need to discuss any of it with her. He did not even think it was important to keep her informed of the decisions taken. She was hurt and couldn’t figure out why someone who was otherwise quite caring and considerate turn into a completely different person when it came to money.
For him, it was just a way of life because his mother was never involved in any of these decisions, whereas hers was a financially-savvy woman taking her own decisions and that is what she wanted to emulate.
Another client of mine was in a similar state of disbelief. She had an arranged marriage and while everything was okay pre-marriage, post-marriage she realised her husband was extremely secretive about money, so much so that after 7 years together she had no clue how much his salary was!
He did not want to touch her money and insisted on living a frugal life while saving for the future from his income alone. While she was not extravagant, she did want to enjoy a decent lifestyle and indulge in experiences which gave her pleasure.
She was painfully aware that it was possible to do all of this and still build a financially secure future if they could work on their combined income. After trying her best to be accommodative, she finally decided to part ways. She still shudders at the thought of how possessive he was with all his material acquisitions.
Another soon-to-be-married couple were on the same page on everything, it was quite obvious to me that they had similar backgrounds and values and seemed compatible. That said, they were uncomfortable discussing money.
They had chalked out a plan, drawn a monthly budget and decided to pitch in 50–50 for all the household expenses and each one would not be answerable to the other on what each one did with their surplus.
Being married for 20 years and having interacted with several couples and having had deeper discussions about money, I knew that there could be some grey spaces in such a plan.
What if, post-marriage, one of their parents/siblings needed financial help? Was it only one person’s responsibility or would it be a combined decision?
If they decide to start a family and one of them decided to take a break to care for the child, what happens to contributions? Could they really be comfortable if one of them was extravagant and spending on things which the other one could not relate to? These are some questions which definitely need answers.
Apart from initiating conversations and building comfort, it may help if you pay attention to how involved their family is in these decisions. Discuss how things are different in your family, this will ensure you build comfort and are not awkward talking money.
Exchange credit reports, which can be insightful and help you understand the person much beyond a few discussions. It would also be a good idea to together meet a financial planner who specialises in pre-nuptial counselling on money matters, to help take out some of the awkwardness which one might have.
In western countries, such discussions before marriage are common and couples even have pre-nuptial agreements. While in India we might still culturally not be comfortable with pre-nups yet, this is a discussion that you should not put on the backburner.
To know a person fully, it is important to know their attitude towards money. This is a critical step towards being truly ready for your happily-ever-after story.The author is a Certified Financial Planner and Founder of Finwise Personal Finance Solutions.