The 5 Step Master Plan to Talk to Your Spouse or Partner About Money

Transcript:

On this episode of the Personal Finance Podcast, we're gonna give you the five step master plan to talk to your partner about money.

Woo. What's up everybody? And welcome to the Personal Finance Podcast. I'm your host Andrew, founder of Master money.co. And today on the Personal Finance Podcast, we are gonna give you the five step master plan. To talk to your partner about money. If you guys have any questions, make sure you hit us up on Instagram or Twitter at Master Money Co.

And follow us on Spotify, apple Podcast or whatever podcast player you love listening to this podcast on. And if you wanna help out the show, leave a . Five star rating and review on Apple Podcast, Spotify, or whatever other platform you are listening on. I cannot thank you guys enough for leaving those five star ratings and reviews.

I truly, truly appreciate them. So if you're getting value outta this episode, I cannot thank you enough for those five star reviews now. Today we are gonna go through a five step master plan for you to talk to your partner about money. Now, this is incredibly important and I'm gonna read you some statistics here that we have on relationships and money and how imperative it is to get your money right when it comes to relieving stress on your relationship.

Now I am no relationship expert. Yeah, boy is just a money guy. But at the same time, what I do wanna show you is how impactful this can be, and I'm gonna give you some things that my wife and I have done to help ease this transition, especially if you are newly married or learning how to handle money with a partner.

Or you've been married for a long time and money's just always been an issue for you. Or maybe you are happily married, money has not been an issue, and you wanna avoid that ever happening to you, then this is the podcast for you. I'm gonna give you the frameworks on how to set this up. I'm gonna also give you frameworks on how to put systems together so that you can make sure you stay in communication about money.

This is one of the most important things that you should be talking about. It should be your kids. It should be money. It should be making sure you're in full communication in this relationship so that you can. Ensure you have financial success because dealing with money with a partner is hard. Let's get real about this.

It is a very difficult thing to do. There is two different opinions dealing with the same sum of money, so you have to make sure that you can put together a plan where you both are on the same page. Now, let me get into some of the stats here and some of these stats I got from wealth pursuits, but they're from all over the internet.

So married couples who fight about financial issues have about. $30,000 in consumer debt. So what this tells me is if you're in debt, it puts a strain on the relationship, and that's where you fight more is if you have consumer debt. 48% of all couples with $50,000 or more of consumer debt agree that money is the top reason for arguments.

This is from Ramsey Solutions. 48% of couples agree that if they have a ton of debt, that is the reason why. And in one third of all people surveyed say they hit a purchase from their partner because they knew he or she would not approve. So what most experts call this is financial infidelity, whereas you're buying a purchase, maybe it's a major purchase, maybe it's something small and you're not telling your partner about it because you don't want them to find out.

87% of people who say their marriage is great say they work together with their spouse to set long-term financial goals. 87%. This alone should be one of the main motivators to getting your money right together. Your boy's gonna save marriages today with this system. We're gonna show you how to save a bunch of marriages by doing this together, making sure that you are putting together a plan where you both.

Are on the same page. There's an average increase of 16% per year in combined wealth among people who are married. This is a cool stat. Now the reason why I think this stat is cool is cuz I think in a relationship you should be motivating each other and uplifting each other to build wealth. And I think this happens an increase of 16% per year in combined wealth among people.

If I didn't have my wife involved in my life, I don't even think I would push very hard when it came to early on in my twenties, she was the one that pushed me because I had a little bit less motivation than she did early on. Married people accumulate wealth faster than singles, and this is much faster at a rate of 77%, so that's not a motivator to get married and you like money.

I don't know what it is. Having a yearly income of $125,000 or more lowers the likelihood of divorce by more than half. About 51% compared to households with an annual income of $25,000 or left. So earning more saves your marriage. That's what this stat shows, and this is from the Atlantic. Earning more money over $125,000 combined in the household lowers the likelihood of divorce by 51%.

This is a crazy stat that a lot of people never talk about arguing over. Personal finance issues every week increases the likelihood of divorce by more than 30%. If you argue about money a lot, you gotta stop that. You gotta get on the same page and make sure that you are doing this together. About 80% of all married couples in the United States share at least part of their expenditures and earnings.

That's compared to 20% who keep everything completely separate. That's from Ally Banks. So if you're thinking about combining your finances or not, That's one thing to consider. 41% of married couples with consumer debt argue the most about money. So really, debt and income are two of the biggest factors when it comes to creating stress around your money.

Those two factors alone, which we talk about here a lot, are major factors in any person's life on having a healthy financial life. The likelihood of divorce increases by 45% among couples who think their partners spent money irresponsibly. So if you're not on the same page and you think one person is spending irresponsibly, you don't have systems set up to make sure you handle this.

And systems is just a word to say you don't have a plan in place. To handle this stuff. It's a 45% increase of divorce, but I have a bunch of other stats and most of 'em come to the same conclusion. Debt and income are the two major factors. So today what we are gonna do is we are gonna talk through how you can actually avoid all of these things all at once.

And I'm gonna give you this systematically how to set up a money meeting, and I'm gonna tell you how often to have it. I'm gonna tell you what to talk about. I'm gonna tell you some of the scripts that you should be having when you have conversations with your partner. I'm gonna show you how to listen to your partner and how you can actually think through these together as a team.

This is what we're talking about today. So if that's something you're into, let's get into it. All right, so what we're gonna do is we are gonna set up a money meeting, and we're gonna set up a money meeting at a certain frequency so that we can start to get on the same page when it comes to money. Now, I know this sounds like something that's not fun, but there's a lot of things that you can do to make it interesting, make it more fun, and make this process enjoyable for both parties.

Now talking about money, the main motivator leads to less divorce, less divorce situations. By talking about money. You have to talk about this. This is a very important thing if you. Push this and suppress this down and never have these conversations, it will never go well. Number two, it also leads to having more money because you are both on the same page, you are following the same systems.

When my wife and I started to do this, immediately our finances turned around because all of a sudden we were on the same page and not just wondering what the other person was thinking all the time. And number three, it also leads to a quicker retirement, meaning that you can retire so much faster because your goals are aligned and you get to do exactly what you should be doing.

When it comes to building wealth. So between those three things, if that's not enough of a motivator for you, then I don't know what type of life you want to have. So the first thing we're gonna do is we are going to start with why. So you're gonna set up this money conversation, and you are gonna approach this with a mutually beneficial position.

So maybe one person is more interested in money than the other. I, in my situation, is way more interested, obviously in money than my wife is. My wife could care less about the numbers and building wealth and all these different things. She likes to talk about investing and stuff like that, but outside of that, she could care less about some of the other things that I talk about.

In fact, I probably bore her to death with some of the things that I talk about. If you're the money person, here's one thing that you could do. You could say, Hey, I wanna work on our finances so that we can build our dream life together. Can we schedule a time to meet weekly? To talk about money so we can achieve our goals and our dream life.

This is part one. You want it to be beneficial for both parties. What you don't want to do is sit down and say, Hey, we need to look at these spreadsheets. We need to look at our investments. This is not working out. This is not going in the direction that I want it to do. That is never what you do because nobody wants to sit down with somebody else and look at spreadsheets.

Nobody wants to sit down with somebody else where they hammer in numbers into their brain. Nobody wants to do that. So instead, what we are gonna do is do it from a motivational standpoint, which both parties want anyways. So there's a bunch of motivators that you can put into place. Maybe your goals in your dream life are to travel the world.

Maybe you wanna buy your dream home. You wanna have this amazing home. Maybe you want a bunch of land, or you wanna have an amazing apartment in the city, or you want to have this amazing second home and a vacation home where your family can build memories. Maybe that's your big thing is you wanna buy another home.

Maybe you wanna achieve financial freedom as fast as you possibly can. That could be a third motivator. Maybe you wanna pursue a passion or a hobby. Like, for example, for me, I love playing pickleball. If I could play pickleball every single day, well that's a great life for me because all of a sudden I just picked up this new hobby.

I can pursue this passion hobby and have a great time while doing it. Maybe you wanna spend some quality time with friends and family. Maybe you wanna start working on work that fulfills you while getting these financial goals put together is going to help you. Do that. Maybe you wanna get healthier and maintain a healthy lifestyle, have more time for your healthy lifestyle.

Well this is going to help you do that as well. Get that flexibility with your time and your energy, or you wanna learn new skills and languages. These are all just ideas of motivators that a lot of people have. So you find what motivates you, what motivates your spouse, and you guys come together to put together a plan of what is your dream life.

I want you to write this out. What exactly is your dream life? Because once you have this in place and you know what you want to do in life, You can put the money planned together because that's what money is truly there to do. Money is there to bring us freedom. It is to reduce our stress, reduce our anxiety, and give us freedom.

That is what money is there to do. Don't get it twisted. It's not to do anything else besides buy your freedom. Or be utilized as a tool to do what you want. This is the amazing power money has in putting together a plan together is the way that you can achieve that. Most people wanna travel the world or they wanna travel to a bunch of places.

If that's you, money can help you do that. A lot of other people just wanna have freedom with their time so they can do whatever they want. If that's you, money can help you do that. And so coming together on this stuff is going to help you get to the point where you get exactly what you want in life.

How freeing is that? How freeing would it be to get exactly what you wanted in life? This is where it becomes extremely powerful to have these money conversations. This is not a chore. This is invigorating. This is enlighting because it gives you the things that you want in life. Now, here's some other reasons why you wanna meet, because you wanna have improved communication regularly.

Meeting means you improve your communication. You are both on the same page. Number two, you wanna have financial transparency. This allows you to build trust and promote openness in your relationship because you have this financial transparency. Number three, it helps you align your goals on your dream life.

Having this constant communication, whether it's weekly or biweekly, I recommend two to three times a week, which we'll talk about in a second. But having this constant communication helps you align those goals. Number four, it's gonna help you do a budget adjustment. Maybe one of you just thinks you're spending way too much money in one area.

Well, making this budget adjustment, it's going to truly help you. So for example, let me give you a good one. Over the last year, my wife and I have spent a little too much money for our taste on frivolous things that we could care less about. Random target runs random Amazon purchases, and obviously we know better to not do that, but at the same time, everybody slips when it comes to this stuff.

So we had a conversation to reel this back in. You have to do this constantly because you're gonna have mess up all the time. So reeling this back in just means you are more conscious about your spending so that you can take more dollars and spend them towards things that you love. That's exactly what making these adjustments is celebrating milestones.

Once you hit a big goal, maybe you paid off your car payment and you did your final car payment, you celebrate that milestone together, pop them bottles during that goal meeting, get together, make sure you're celebrating those wins. It reduces both of your stress cuz you're. Openly communicating. Now, if this turns into a fight every single time, your approach is wrong.

It should be reducing your stress, reducing anxiety for both sides. Also, it helps you adapt to changes and reinforce this teamwork and reinforce this conflict resolution. There's so many pros to this. I could go on and on and on, but these are some of the things that you've gotta think about when you do this now.

Number two, you have to pick the time and place. When you pick the time and place, you want this to be a comfortable location for both of you. It doesn't have to be in the same exact place every single time, although I think it should at the beginning. But as you start to get good at this, you can do it in a bunch of different places.

So one place that we do it is at the kitchen table, for example. So you don't wanna be lounging around the couch, laying out like you're on a chase lounge and one person's, the therapist and the other person's just laying there. But you want it to be a situation where you can have a full on conversation.

Maybe you could pour up a glass of wine, maybe. Beer. Maybe if you don't drink, maybe you have your favorite ice cream or your favorite treat, whatever it is, and you make this a fun thing, a comfortable thing, and have it in a place where you can also have really good conversations. Now, one thing to mention also is the time.

So you don't wanna do this at the end of the day when you both are dead exhausted, because that means you're just gonna skip it way too many times. So you gotta think through, when can we do this? Maybe early Sunday mornings, maybe. Early Saturday afternoons, something that sometime where you're not completely exhausted.

Now if you have kids, I know this is a much harder thing to do. I understand that. So maybe you could do it during your nap time on the weekends where you're a little more energized than you would be if you did it. At the very end of the day, think through how you can make this work and make sure it's easily repeatable.

Meaning you can repeat this and do it over and over again where things are not gonna get thrown into your schedule. If you do this in the middle of the week where you both are working from home, and then all of a sudden meetings get put on your calendar, this is gonna get pushed back days, then weeks, then months, it's not gonna work.

It's gotta be easily repeatable so that you're doing this over and over again. So avoiding stressful times, choosing a relaxed environment, make sure you eliminate distractions. So it's a time where there's not kids running around in the house. They're trying to talk to you while you're having this conversation.

Eliminate distractions is a huge thing. Keeping it casual up front is also awesome. Maybe you go to a coffee shop and you keep it casual in that kind of situation, or you go on walks as you get good at this and you're exercising at the same time as you're having your money conversation. Now. Also, one thing to note here is you wanna align this with your partner's energy levels.

So some people have really high energy levels at certain times, and they have really low energy levels at certain times. If you're a morning person and your partner's not a morning person, there is no reason to have this conversation in the morning. Or if you're a night owl and your partner's not a night owl, then there's no reason to have this conversation at night.

You can align your energy levels at the same time, otherwise it's not gonna work. All of these things sound like they're small details. Let me tell you right now, they. Matter. So think through this as you are going through this process, and then just make sure you have room for flexibility. So if we cannot make the meeting for any, which reason for this week, what day is gonna be our makeup day and at what time?

That way, if it's missed, then you have that makeup day and time and you don't miss it every single week. Now, number three. The third thing you want to do is you want to set the agenda beforehand. So imagine leading a meeting at work and you had no agenda planned. That would be a disaster for everybody involved.

So you gotta have an agenda planned before you do this. Now this can be a simple one page sheet that you put together that you both look at. You can both work on a Google Doc every single week on what you wanna talk about. But here is your agenda. I'm gonna give you your exact agenda, and then you just put the specifics underneath here.

So the first thing you wanna do is review expenses. When you review your expenses, you wanna go through your recent transactions and your spending habits. So you can either go through your recent expenses, maybe you had a bunch of surprise expenses. My wife and I have noticed over the last six to seven months, we have had multiple surprise expenses every single month.

And I'm talking about big ones, like a thousand dollars surprise expenses every single month for the last six months. That's what emergency funds are for, but at the same time, it's been nonstop. So you wanna go through and kind of talk through some of those. And see what expenses have happened, what areas are you overs spinning on, what areas are you underpinning on and discuss potential adjustments that you need to make.

So that's number one. Review expenses. Number two, review your budget. Create your budget. Make sure you review that budget. Is your spinning on target or your categories on target? Do you have everything in place? And if you do a reverse budget, are you just saving enough off the top and then spending what is left over?

Do you have enough left over when you save off the top, look at those two things. Three. Review your upcoming calendar. What do you have coming up when it comes to bills? What do you have coming up when it comes to obligations? Have those two things available. One great way to do this is with Rocket Money.

So Rocket Money is not a sponsor of this podcast. I just like using it. It's a free plan and there's like a $3 plan that you can use also, but I use Rocket money all the time to see what bills are upcoming. Also what my recurring expenses are like do I have a bunch of subscriptions that I am not really wanting anymore?

So I go through that. I review that every month at the same time. And so that's a great way to do that is to review your upcoming calendar in Rocket Money Reviewer Investments. So you can go into Personal Capital, which is now Empower. You can go look at Empower. I'm still getting used to saying Empower instead of personal capital.

And you can review your investments, assess where you are, make sure your investments actually went in, are you on track for retirement? All those different things, and you wanna schedule when you're gonna tackle big items. Let me give you an example of this. Let's say for example, you've heard some of our Generational Wealth podcast episodes and you said, Hey, we don't have a will yet.

We gotta schedule a will. When are we gonna do this will thing? You're gonna schedule those big items to tackle those big items at a certain time during this meeting so that nobody can get out of it. You have it scheduled on your calendar and you just get it done. This is how you get financial stuff done, especially the boring stuff.

You get your taxes done this way, you tackle all these big things. You just schedule it, you get it done. That's what you do. You rip off the bandaid and you get it over with. This is how you do that there. And then brainstorm any changes needed. So when you do this, you wanna brainstorm and collaborate and identify any areas of your financial plan that may need modification.

You both need to agree on this, so making sure you both agree on this modification is key. And then put together action item. So if there's things you each need to do, who's gonna do what? Put together the action items in the action list so that next time you come to the meeting, those items are done. And then if you're getting action items, I would take those action items and put the date I'm gonna do 'em.

That way. You're not trying to do 'em all right before the meeting and then your partner gets upset because they did their action items and you didn't do yours. That always lays to conflict, so making sure that you do that ahead of time is incredibly important. Now, number four. I wanna reiterate something.

I want you to understand that this is a collaboration and you are building together. This needs to be a mutual plan, not just your. Plan. This isn't a meeting to tell your partner what you're gonna do. Instead, this is gonna be something where you both contribute to get a positive outcome. So how do you wanna do this?

Well, first, you're gonna have open communication. During these meetings, you wanna encourage honest and open dialogue. Number two, you're gonna have active listening. If you're the person who doesn't shut up about money, I want you to actively try to make sure that you are listening. More than you are talking.

You're asking questions, you're listening to what your partner is talking about, and you are taking in that information and utilizing that information so that you can craft a plan that you both love Joint decision making when it comes to making decisions on, are we gonna pursue financial dependence?

Are we gonna buy a bigger house? Are we going to go on more vacations? This has to be joint decision making, and I'm gonna talk about it here in a second. What you should do if you have differing goals, cuz everyone has differing goals, so you gotta have this joint decision making when it comes together.

And then number four, you're gonna have to have compromise. You can't just get everything you want. So each person has to have compromise when you have these conversations. And then once you have this compromised, then you can set common goals with this collaboration. Now what do you do if you have different goals?

Number one, identify where you have common ground. And then identify the differing goals. Now what I want you to do is when you have common ground, put those together. Those are good things that you both are gonna work on together. Then you're differing goals. For example, we had a question a while back where someone said their wife wants to buy a bigger house, but they wanna get financially independent as fast as they possibly can.

How do you handle these goals? We're gonna have to prioritize which one is more important. Do you want that freedom? Or do you want that bigger house to build memories and all these other things? In a lot of situations, you could do a little bit of both, or maybe your compromise is, hey, having that freedom is going to help us spend more time with our family.

We can build those memories and maybe even more. Whereas having the house, we're still gonna have be working our butts off and we may not be able to have as much time and as many memories if we do that. That's one situation where you can talk through that. I understand the difference between the two. Or maybe you put together a plan where you can have both, where maybe if one partner doesn't work and the other one does, the other partner picks up a job so that they can earn more money so that you can achieve both goals and everybody is on the same page.

So there's a bunch of different things that you can do, but prioritize which goals are most important. Put them in order on a piece of paper or on a spreadsheet, whatever you wanna do, and then establish a timeline for each one of these goals. Because if one is more important than the other, you establish that timeline.

You attack those goals. In order of importance first, because this is how you save for multiple savings goals. This is how you attack multiple financial goals. This is why the Stairway to Wealth is in an order. The Stairway to Wealth is in an order because I want you to do boom, boom, boom, one at a time, so that as you hit each one, then you can go to the next level.

And that is really how you accomplish your goals. If you try to do all the goals at the same time, it's gonna be very difficult, but put 'em in order of importance and make sure that you are working towards those. And make sure you're having these compromises, as we've talked about before. Then have that joint plan together and then regularly reevaluate that plan once you have it together.

So once you have that plan in place, regularly continue to reevaluate. Now I'm gonna create together a PDF for you guys where you can kind of go through these exercises. I will give you these steps for everything we've talked about this far in a PDF so that you can check that out. I'll link it up down below in the show notes so that you can see that.

Now, number five, this is the last step, is you gotta be consistent. You have to be consistent with these meetings. I know what you're gonna do. I know what most people do is they meet once or twice and they're like, ah, this isn't that fun. I'm not gonna meet anymore. I don't feel like it. Neither person feels like it anymore.

You have to be consistent for this to work. You saw the statistics that we talked about at the top of the show. It is so important to do this. I cannot explain enough. If you're in a relationship, it is so important to have these money conversations. One meeting will not help you. 3, 4, 5 meetings will really help you and consistently meeting once, twice, three times a month will be one of the best things that you ever did for your financial life.

I cannot explain how much this will ensure that you have success with your money. So, To ensure consistency, make sure it's fun. You can either celebrate milestones, you can gamify money, challengers, you can center money, conversations around what you can afford. You can center money, conversations about your dream life and how you are gonna work towards achieving that dream life.

There's so many different things that you can do, and it's not like you're gonna align perfectly overnight. This is one thing that you gotta know and anticipate upfront. Tailor your expectations. You're not going to align a hundred percent on overnight, but continuously having these conversations, continuously meeting and making sure that you're taking this slow over time, thinking through your goals.

This is your entire life here, so you can continuously have these conversations, develop your goals. Your goals will change. My goals have changed 10 times over from my twenties to now, my early thirties. They have changed a million times. Since we started these conversations, so making sure that you take it slow and peel back the layer slowly over time so that you can figure out how you can achieve the experiences and the goals that you want.

That's what this is all about. So listen, I'm gonna put these steps together on a PDF so that you can download that pdf, look at it, and use this to set up your own money dates and conversations. You can have my step-by-step guide. In addition, I'm gonna put together the list that you can utilize to have on your agenda.

It'll be in that PDF so you can put your agenda together very easily. And I'll even give you a sample agenda in there also. So if you guys are interested in that, make sure you check out the show notes and it'll be linked up at the top of the show notes for you to be able to reference and download. So thank you guys so much for listening to this episode.

I hope you learned a ton about how to talk to your partner about money. If you guys have any questions, make sure you hit us up on Instagram or Twitter, and don't forget to leave that five star rating and review. And if you got value at this episode, share it with your partner so that you guys can go through this together.

Share it with a friend as well who is struggling with money with. At their partner, and thank you guys so much for listening to this episode. I truly appreciate each and every single one of you, and all I wanna do is bring you as much value as we possibly can with this podcast. That's the entire goal. I want to make multimillionaires out of each and every single one of you.

So thank you so much for listening to this episode. We will see you on the next episode.