AVID Chat #65: 3 Tips For Handling Money In RelationshipsInsights Behavioral Finance AVID Chat
In the many years that our team has been practicing financial planning, we’ve worked with a long list of couples to help them set shared financial goals, and create a money management system that allows them both to thrive. Our experience has shown us that, in general, there are three key tips to follow when managing money as a couple.
Short on time? Here’s the outline of this video so you can jump to the section you’re interested in!
00:07 What are money scripts?
2:10 Tip #1: Money Scripts in Action
05:00 Tip #2: Have Open Communication
5:40 How to Keep Communication Open When One Person Handles the Finances (Or Acts as a “Point Person”)
08:30 Why Both Members of a Relationship Need to Know What’s Going On With Your Finances
09:35 Tip #3: Have a Plan
10:27 How to Make a Plan Together That Balances What Each Person Wants
Tip #1: Know your money scripts.
Just as everyone has a love language, everyone has a set of money scripts that inform how they feel about money, and how they use it. These often come from when we’re kids, and your money scripts may clash with your partner’s. Understanding your own money scripts, and your partner’s, can help you to see where each other are coming from when making financial decisions, and ultimately reach a compromise.
Tip #2: Keep communication open.
It’s pretty natural to have one person in a relationship manage the finances. As people sort who takes one what task, usually one person prefers money management and are happy to take it on. However, that doesn’t mean that the non-financial person gets to remain in the dark! Keeping open communication about what’s going on with your family finances is critical.
This doesn’t mean you have to have long financial meetings. Instead, aim to check in with one another about goals and cash flow semi-regularly in a more casual way. The “money manager” can talk about what’s going on with various accounts, and the two of you can discuss shared goals – both short and long-term.
Tip #3: Have a plan for your money.
Once you understand your money scripts and have an open line of communication, the two of you can partner up to make a financial plan. This might mean working with a team like AVID Planning to help you clarify your goals and build a strategy, or it could mean partnering together to create a system for managing your cash flow, paying down debt, and working toward your other goals until you’re ready to work with a financial planner.