The vast majority of people find it difficult to talk about money with partners, friends or family. At the root of this issue is something called money shame. To have effective conversations about finances with others, we have to understand money shame and how to overcome it. Today, I’ll not only be discussing money shame, but we’ll also talk about financial incompatibility, the beliefs you have about money that are getting in your way and, as always, my top tips for moving past all that and finally having effective conversations about your finances with the important people in your life.
9-minute read
Whenever I meet with individual clients or couples, I always talk about money at some point. What amazes me is that I’m often told that I’m the first counselor or coach they’ve ever had who asked about their finances, budget or spending habits. And I think this is a great example of how money is such a taboo subject that even therapists aren’t generally asking about it!
It’s not like I’m doing financial planning with my clients, but to not discuss money seems insane! I mean, it’s a huge stressor to the vast majority of people I’ve ever met, even if they’ve got plenty of it! You’d be amazed how many wealthy people have just as many screwed up issues regarding money that bleed into their relationship as people with no money!
In fact, in a recent survey, almost 65% of couples said that they’re financially incompatible with their partner! How can that not cause strife and issues that have nothing to do with how much money you have? People hide money or purchases, lie about debt or feel resentful that their partner isn’t pulling their weight or contributing fairly.
Let’s Talk About Money Shame
When couples try to discuss money, there’s often blame and defensiveness. At its root, this is due to something called money shame. How much you earn, what you’ve spent money on in the past, your debt, not having savings or retirement or even the fact that you’re still spending above your means all add up to feeling shame about money in our lives.
In her excellent TEDx, author and money coach Tammy Lally says:
“What I’ve learned is that our self-destructive and self-defeating financial behaviors are not driven by our rational, logical minds. Instead, they are a product of our subconscious belief systems rooted in our childhoods, and so deeply ingrained in us that they shape the way we deal with money our entire adult lives…And so many of you are left believing that we’re crazy, or stupid, or just bad with money. This is what I call money shame … the intensely painful feeling or experience of believing that we are flawed and therefore unworthy of love or belonging based on bank accounts, debts, homes, cars, or job titles.”
The Money Beliefs Holding You Back
This money shame shows itself in beliefs we carry from childhood into adulthood about money. What we don’t realize is that there isn’t one right way to be with money; it’s all about preferences and beliefs that are so integrated that we don’t question them.
Belief #1: We have to combine our money or we’re setting ourselves up for a breakup.
It was common in previous generations to have one account. This grew out of the fact that women weren’t even allowed to have their own credit cards until 1974 here in the US and often weren’t working outside the home. So, there was one income and men usually decided how it was spent. Things are different now, and although many couples still have joint accounts, others keep separate accounts, and some have both. There’s no one right way to do it. You can do whatever you want as long as it’s fair and doesn’t create resentments. In other words, everyone needs to agree, not just the person making the (most) money.
Belief #2: It’s your debt.
These days, people are getting married later and more women are going to college so many individuals come into a marriage with student loan or credit card debt. Individuals in a couple think it’s the other person’s debt, so why should I be responsible for decisions they made about money before we got together? The problem with this is that it creates inequity within the relationship as well as a separate approach to money and life right from the get-go.
If you’re looking to build your life with someone and even thinking of having children with them, this “mine and theirs” mentality is going to keep showing up and create more and more distance and resentment between the two of you. To me, it’s like getting into a relationship with someone who already has a child. Would you have nothing to do with that kid? I mean, they made that decision before you got together!
I’ve talked over and over (and even covered it in my own TEDx) about the importance of being a team. There are no “you” problems and “me” problems; everything is a shared “we” issue because you’re a shared resource. Instead of thinking of it as “his debt,” think of it as “our debt.” Brainstorm how you’re going to pay it off together. If her debt is really this big a deal, then maybe that’s a deal breaker and you shouldn’t be together. But, if you’ve got the person of your dreams in front of you, I think you’re crazy to let something like money get in the way. In the end, money isn’t the thing that’s going to make for a happy life. It’s the quality of the person you choose. And if you can’t find a way to solve this issue together, you’re going to have trouble figuring out future problems as a team.
Belief #3: Labeling one as “good with money” and one as “bad with money”.
I hear this one a lot from my clients. “She’s not good with money.” “He’s a spender, and I’m a saver.” No one is “right” or “wrong” with money in a relationship; you just find different things important. Everyone is a “spender” in this life. You just spend on different things and judge what that means based on how you were raised and what you believe about money (there’s that money shame again). The key is to figure out a budget that works for both of you.
It all comes back to what you believe about money in general. Some people see money as a means to feel safe and secure, while others see it as a tool for experiencing their life to the fullest. Neither is right or wrong; it’s all about beliefs and preferences.
Belief #4: What they don’t know can’t hurt ‘em.
Hiding money in a relationship is more common than you might think. Sometimes it means lying about how much something costs so you don’t upset your partner ($200 on a pair of shoes?! $3000 for a watch?! $20 for a block of cheese?!) Other times it’s not telling your partner when you work overtime and have some extra money (“I worked the extra hours, so it’s really my choice what to do with it”) or something as big as hiding assets (“I’ll just keep this nest egg separate so I have some insurance”). Keeping money secrets in a relationship undermines it, pure and simple. If your partner doesn’t like something, you need to find an agreement and budget for it. These conversations are key to an open, emotionally close relationship. Secrets around money create distance.
Belief #5: You’re equals so everything should be split 50/50.
Remember that equality and equity are two different things. If you’re making 30% more money than your partner, then they shouldn’t be responsible for 50% of the bills. Splitting” bills needs to be on a percentage basis or some other terms that feel equitable. Also, being the sole breadwinner or being the one who physically pays the bills doesn’t mean you get to make all the decisions. You’re still equals when it comes to deciding how to spend the money earned in this household. If you don’t want to share your money (and the power and control that comes with that), then you probably don’t want to share much else.
Tips and Troubleshooting
As I said earlier, it’s rare for a couple to have exactly the same financial goals or even the same ideas about what to spend and what to save. In a survey of financial advisors in the UK, more than a third said the biggest reason for tension between couples during financial planning meetings is disagreements over lifestyle goals. This is why getting to those beliefs and bringing them out into the light of day is so important!
So how do you set those important conversations up for success?
Tip #1: Be Transparent
It’s important to put all your cards on the table as early in the relationship as possible. Be clear about your expectations, wants and where your finances stand. Ask questions such as:
- What’s important to you when it comes to money?
- How do you most like to spend your money?
- How do you decide what to save?
- How much debt do you have?
- Any assets?
- Do you have a budget? If not, how do you decide on spending and saving?
- What do you expect from a partner when it comes to money?
Tip #2: Don’t SAC. Ask Questions
When you want to have any type of money conversation, it’s the same as having any kind of conversation about your sex life: be prepared and open. Sex and money are hot topics for many couples, and I think it’s because most people don’t allow themselves to get really vulnerable when they have these conversations. Instead, shame is at the helm, which results in a ton of defensiveness and anger.
So, go into the conversation with the following ideas:
- Try to learn something, not prove something.
- Check your own beliefs at the door. Go in with the idea that your way of dealing with money isn’t any more right than your partner’s.
- Don’t SAC (offer Suggestions, give Advice, or Criticize). Instead, ask Collaborative Questions such as “Can you tell me more about x?” or “If this was a great money conversation, what would I say first/last to you?”
- Listen like you’re wrong.
- Try to identify and discuss money shame or beliefs that are holding you back.
- Listen to episode 124, How to Listen Without Getting Defensive or Hurt, which details my seven-step process for having an effective conversation with tricky subjects like this.
Tip #3: Have a Monthly Financial Meeting
Sitting down together and creating a budget and then reviewing your budget and savings plan month to month is critical for creating a feeling of being a shared resource and team as you approach finances in your relationship. By sitting down each month and going over your budget and goals, you’ll find yourselves collaborating as a couple. A large survey showed that couples who make their financial plans together fair much better than couples where one person is in charge. Not only do they get along better and report higher satisfaction, but they’re more likely to have money left at the end of the month, and are more likely to save.
Research and Resources for Relationships and Money: How to Have Effective Conversations About Your Finances
Dr. Abby Medcalf TEDx talk: The Real Reason Relationships Fail
The 5 Signs of Healthy Relationships
