Communicate: What does your Future Look Like?
Brennan McCarthy, CFP®
Like everything else in marriage: communication is key. Having an open line of communication with your spouse about what money stressors are hanging over your head is a key part to financial planning. Even more importantly, do you regularly discuss your personal financial goals with your spouse? If you're working with a financial advisor that hasn't helped you facilitate these conversations, it's probably time to find a new one. Ramit Sethi, the author of I will Teach you to be Rich, talks about this step more broadly by asking, “What does your rich life look like?” Or in more concrete terms, how would your life be different if money wasn’t something you had to worry about? Among many other things, here are a few questions I often find spouses (especially new and expecting parents) differ on:
- Is having a nice, new car important to you?
- Picture the home you plan to raise your kids in. What does it look like, and where is it?
- Would you like for one spouse to stay home with the kids, or send them to daycare?
- Is sending the kids to a private school important to you?
The not-so-secret to making every relationship work is communication. This means getting aligned with your spouse on what you’re each striving for on a financial, personal, and relational level. What does your Rich Life look like? As newly married couples quickly learn, marriage isn’t a one-way street. It requires a lot of give-and-take from both sides to foster a healthy relationship. The American Association for Marriage and Family Therapy outlines the most important way to avoid miscommunications in a marriage is to regularly “renegotiate expectations of the marriage, be open to change, and be willing to compromise.” When it comes to personal finances, it means talking about what your future life looks like with your spouse. It also means that each spouse will have his or her “non-negotiables” when it comes to money. Part of the give-and-take of marriage means compromising on a "non-negotiable" item your spouse is adamant about for the sake of the relationship.
For example, if one spouse's "non-negotiable" is that they want to live in a 3,000 square foot home in the suburbs, it could mean less resources for other important goals-- maybe it means you'll need to drive around a beater car for another few years until the wheels fall off instead of buying a newer car. Maybe it means renting a run-down 1-bedroom apartment for an extra year or two to allow yourselves to save enough money for the down payment. Or maybe, you'll find that there's no way to make a purchase that large with your current income. Do you need to find a higher paying job that could help support a lifestyle like that? What are your non-negotiables?
What I find in my financial planning work with spouses is that these conversations are often not had until I sit down with them to ask the questions.. If you’re not aligned on the direction you're heading, both spouses will end up feeling unacknowledged. These feelings lay the groundwork into what Dr. Jordan Peterson calls the 4 “Horseman of the Apocalypse” for failed marriages: criticism, defensiveness, stonewalling, and contempt. A relationship that lacks strong communication leading is heading down a dark path towards a failed marriage if it's not quickly corrected. The first sign is criticism: when each partner simply blames the other for something, instead of communicating how it makes them feel. Criticism is the start of the cycle, and eventually leads the opposite spouse to respond with defensiveness. Defensiveness generally rears its ugly head in response to criticism through an abdication of responsibility for any issues in the relationship. This eventually leads to responding to the criticism by hurling criticisms back at the other.
While criticism and defensiveness are very ugly traits to see in a relationship, they naturally happen from time to time in any long-term relationship, so they’re not unrepairable. In fact, arguments in a relationship indicate that you still have an intention of trying to improve your situation. When the actions in a relationship turn to contempt and stonewalling, it's very challenging to get that ball to stop rolling down the hill. In fact, it’s unlikely the relationship can be repaired without professional intervention if it reaches this point. Contempt often reveals itself when one partner expresses clear disdain or disrespect to the other partner. This usually occurs after a long period of failed attempts to communicate, and sometimes even comes out as sarcasm. The final stage is stonewalling-- when one or both partners completely shut down and withdraw from each other. This is the final stage because it often indicates that the spouses have given up on the relationship, or at least given up on trying to fix it. When I think of a real example of contempt and stonewalling, I think of how our Congress operates-- many of them will simply strike down a bill regardless of what it says because of who the author of it is. They don't want to hear the potential benefits, because they'd rather sit in their echo chamber of colleagues and believe everybody wants the same thing they do.
In financial cases where I see these traits on display, it's almost always caused by one spouse being the "spender" and the other the "saver." It starts with accusations and criticisms ("Why did you buy that without telling me first?!?"), leads to defensiveness ("I didn't feel like I could tell you because you're always mad when I want to buy something important to me"), and eventually devolves into a broader argument at that point unrelated to the initial question. If not stopped there, it becomes a frustrating recurring conversation where neither spouse feels understood, and the conversations gradually just stop from happening ("She's going to buy non-essential things whether I say something or not, so I'm just going to stay quiet"). This builds up resentment and mistrust, and quickly becomes the recipe for a toxic relationship.
How can this be fixed before the relationship leads to contempt and stonewalling? You guessed it, communication. I like to work through what I call the "Money Values" exercise with all new clients to get to the bottom of what's important to each of them. These discussions are incredibly important for me to understand what my clients want but can be even more valuable for each spouse to hear the other's thoughts on what they feel money can truly do for them.