I always looked up to my grandfather when it came to investing. We grew up lower-middle class, with echoes of the depression in the background. My family, for the most part, fled from Nazi Germany leaving whatever wealth existed behind. After serving in the war, and taking over two years to recover from malaria, my grandfather busted his hump to achieve success.
From him I learned the ethic of hard work, and planning for the future.
It’s why I was so surprised, when hanging with my grandmother and she started talking about “the market”. She knew her financial situation exactly as well as my grandfather. While perhaps not as interested in the numbers, she had a great grasp of what they had, where it was spent, and the income they got from various pensions and social security.
I model my own marriage in this manner.
Not only because if something happens to me my wife needs to know. But because in order for us to achieve our family goals, we need to operate in concert.
Our goals reflect our values, so our conversations about money start with our values. From there the conversation drifts through our dreams and objectives, and ends with tactics — both short term (spending, budgeting, priorities) and long (investing, and talking about how to communicate about the sensitive topic of money).
One tactic we’ve developed to align our spending and savings habits is to be deliberate. It’s OK to splurge or to change priorities, and even to make unilateral decisions. These changes should be deliberate. Realize what you’re doing, what you’re spending, and why. Don’t just “bleed money” and end up without enough to, for example, pay tuition when it comes due in 11 months.
By the way, as I’m writing this I want to share that we don’t have a specific amount that we are each “allowed to spend on our own” because we’ve learned to trust each other over time. Because we talk about money, and because we talk about how money relates to our values and goals, we can trust that we each make deliberate decisions in that context. Of course, and this is not trivial, we also both work and have pretty equal incomes — so we are able to honor our independent needs while not sacrificing the family’s.
Fidelity, my favorite brokerage, has done a study how couples communicate about money. Not surprisingly, couples don’t talk enough about retirement. In fact, in many cases, couples didn’t even know each others’ incomes! I find that shocking. There are two sides of the money equation, what you spend and what you earn. There’s no way to spend well without knowing what’s being earned. No. Way.
Want to get started on a better path of communicating about money?
Why not take my free email course together with your spouse? If you do, remember I’m always here with answers to your questions.