This article is in continuation with my earlier article on “discussing finances with Parents”, where I have highlighted the importance of discussing money matters with one’s parents to avoid any financial issue later. In this article I will discuss , how important it is to discuss finances with spouse and how this will help you in improving your financial life.
The idea of writing this article came to my mind when last month one lady visited me for help in claiming his husband’s life insurance policy. His husband died last year and neither his spouse nor any of the family members knew that he’s having any life insurance policy. This is not the only case, talking money in family is still considered as a cultural taboo. Husband don’t discuss this as he symbolizes money as power and control, wife don’t discuss this as she feels that her husband knows everything, working couples don’t discuss their salary details, spending habits with each other as they feels it as intrusion in their privacy. But When it comes to family then one should understand that every decision anyone takes regarding finances have its impact on overall family financial matters. And financially speaking, it is very important for a couple to know about each other financial behaviour and take interest in family’s finances to make this relationship more meaningful. This is also for the betterment of overall financial picture. The whole Financial Planning can go haywire, if there’s no involvement of the spouse in deciding goals and proper implementation.
Importance of discussing finances with spouse
Your spouse can be your backup
In emergencies like health problems , your spouse can act your backup in managing the monthly EMIs, credit card payments , and other important payments that should not be delayed and which if not paid on time will lead to heavy charges and on other may hit your CIBIL score also.
Your spouse can be your referee
Where the goals are common and for betterment of both’s future than the financial discipline should also be shown by both. Husband can keep a check on household expenses and wife can keep a check on the credit card balances. This way both of you can involve in each other’s financial habit and suggest changes wherever required. This way you could be able to avoid some impulsive purchases like buying LED TV to watch DLF IPL or buying a designer sari etc.
Working together can make it fun:
Sit down and work out a master list of financial goals. Write down your long and short term goals separately, then match with each other and see how different or same you both think. Though many goals are common like Children education, house purchase, secure retirement etc. but many times you will find that some of your goals are different from that of your spouse. Go in detail and ask what your partner is excited about in coming years. Believe me it would be more fun if you commit to finding ways to help your spouse achieve his/her goal, comfortably.(Also Read Vacation Planning Case Study)
Take the first step of discussion on finances with your spouse
Money talk is very important for every couple. But managing a time to talk and that too on a boring subject called money sometimes is very difficult. You’ve got a career, family, kids, friends, hobbies etc. or some avoid talking money as it may push wrong button. But it’s also not advisable to wait for any financial disaster to happen.
I am a strong follower of holding a quarterly household finance meeting. It’s like a quarterly job review with less grilling and more understanding. Discuss your monthly budget, any surplus or savings, where you went wrong last month, what should be done to increase savings, what expenses can be cut short, how best you can make use of your bonus, where the important documents have kept, how to claim or whom to approach, what bills, EMIs etc. to be paid etc., share your concerns and many other things. You will find many topics to discuss once you open yourself for this activity.
But to make this meeting on finances with your spouse more meaningful and result oriented, do follow some basic steps as following:
- Don’t expect to perfect your finances, right away. The goal is to make incremental improvements overtime.
- Formalize the event and mark your calendars to show your commitment towards family’s finances.
- Chose comfortable settings avoid of distractions. And If possible try to reward your achievement (of meeting) with movie tickets or Dinner at favourite restaurants
- Be open to discuss and change wherever necessary. Understand managing household finances is a two person job.
- Accept equal responsibility and don’t play the blame game.
- Be honest and realistic about your financial position.
- LISTEN CAREFULLY, and don’t be judgmental. (Also Read – Helping your parents)
By talking openly about finances with your spouse and working together to resolve outstanding issues and achieve your goals, the two of you will be richer in ways that aren’t just reflected in your account balances. So now is the time, go and ask your spouse, “Let’s talk Money, Honey”.