Life Planning · The Street

Your FIRST MONEY meeting

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This is advice “for the rest of your life” – ah yes…that part…the part after your wedding.  And as important as your wedding is (or was), this topic is so much more critical to your long term happiness.  I promise, stick with me through my “Money Meetings” blog posts and you will:

  • create a basic money management system
  • create & implement a realistic budget, and
  • set some longer term goals along with a plan to fund them.

Most of what’s written for recently engaged and newlywed couples is so generic and overly-simplified that you’ll forget about it the moment you are done reading.  Not mine – I suggest specific action steps to get you started. And, though obviously not the only way to approach these financial challenges, I provide what I believe to be “a good way”, and a proven way.  Also, everyone’s personal situation is unique, and your specifics are obviously not a part of this “one-way” communication. So, take what you need, modify if you want, but DO IT.

As a Registered Life Planner, I’ve had an opportunity to work with many couples entering, modifying and exiting relationships of varying types – and never has a person said that the time spent discussing shared and individual goals, finances and budgets was not time well spent.

STEP ONE:  Please forward this or print it out and hand it to your significant other as a way of introducing the meeting and making sure you both start with a shared understanding.  You must both be open to the idea of discussing your financial future.  If you can not agree to discuss, I suggest hiring a counselor / CFP / Registered Life Planner to provide guidance to get you started.

And no, it is not “too late” if you have been living together for awhile already, or if you married one or more years ago and are now just getting around to this.  Now is always a good time. 

STEP TWO:   Agree on a specific day/time/location to discuss your finances for one hour.

This can be over a glass (bottle) of wine, coffee, tea — probably on a weekend, with privacy, and few distractions [cell phones and pets are uninvited].  Planning to discuss  while laying in bed just before going to sleep is bad.  Why an hour?  Having a specific amount of time will keep the meeting from creating too much anxiety and will, hopefully, keep you more-or-less on task.

STEP THREE:  You are going to write some stuff down — you need a dedicated resource to document these meetings.  Flip a coin for who takes notes first [there are 6 meetings, so you’ll get equal turns].  You are writing down, at a minimum:  date & time of meeting, agreements reached, commitments made (to each other and to yourselves), unanswered questions to research, to-do’s for next meeting & date and time of next meeting.  Yes, this is old school – I am requesting a college ruled, bound binder, not your phone’s note taking app.  No need to go get a “budget binder” or some overly-structured pre-formatted “system”.  You can do that later if you decide together that you want one.

The goal of meeting #1:  Agree on the framework you will use to manage your finances as a couple for the next year.  

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Why a year?  First, the topic of money may be emotionally charged for one or the both of you, and agreeing on an open ended commitment to an arrangement that may be both new, and a bit unnerving, makes it less likely you will reach agreement.  Keeping the door open to change by placing a one-year deadline on this will help.  And it is a good pattern to begin now regardless — by that I mean having regularly scheduled times to discuss & modify family “stuff” like money, budgets & long term goals that otherwise often don’t ever get discussed.  [Annual financial reviews are a great idea, and regular mini-meetings can help to course-correct before issues get too big, but I will address in meeting 6.]

I also am providing three basic “framework” options from which you will choose (though there are many variations that could work just fine):

Option A.  “Individual Account Option”  You each maintain separate checking/savings accounts into which paychecks are deposited.  You each fund a “joint account” with a specific amount on a recurring basis to pay “joint” expenses, paying individual expenses from your individual accounts

Option B.  “Joint Account Option”  You create joint checking & savings accounts into which all paychecks are deposited.  All expenses are paid from these accounts.

Option C.  “Hybrid Account Option”  You create joint checking & savings accounts into which all paychecks are deposited.  Joint expenses are paid from this account, as well as individual “allowances” you each receive from which you pay individual expenses and personal expenditures of your choosing.

Now notice – you are not discussing individual expense items right now – that’s a future meeting.  Your goal is to agree on and create just the framework that you both will use, for the next year, for transactingmonitoring and reviewing family income and expenses.

Now that you know the primary goal of this first meeting, here are important details:

Start your meeting by expressing to each other:

1.  your biggest fears about money;

2.  your aspirations for you as a couple regarding financial goals – 5 to 10 years out;

3.  what you believe you do well when it comes to managing money;

4.  what is the first weakness/past mistake that comes to mind when it comes to money and budgets.

This may or may not provide some previously unknown information, but it is intended to help you focus your thoughts and connect with each other.  There is no one “in charge” of this process – it is a shared responsibility at this point.  Listen with an intent to understand, not to reply, and no interrupting.

Then outline together what is happening with your cash now right now.  Just a quick summary of what happens currently with the money coming into the “family unit” [paychecks] & how bills are paid — both bills that may have both of your names on them as well as bills that have only one name on them — ALL bills. This is to make sure you both have the same mental picture of the “flow of things”.  Discuss “the why” of this arrangement, and your individual thoughts on how it is working and what could be done to improve this. This might provide some insight into why you each prefer one of the three checking account options over the other two, and may help create a shared vision as a couple.

Now you may (happily) find that you can easily agree on option A, B, or C, but often there will be some disagreement, particularly if talking about money is new to one or both of you or if there is a large difference in individual incomes and/or expenses (student loans, health related expenses, extended family obligations).

NOTE:  If you find yourself feeling uncomfortable during this — or any — money meeting:  Immediately announce that you are feeling this way & remind each other that neither of you [ and none of us – N O N E ! ]  is without issues when it comes to money.  {see points #1 & 4 above} Whether difficult or not, it is beyond important to know each other’s financial situation and pain-points when it comes to money.  Just get your “stuff” on the table – knowing it will be received with kindness and handled with care.

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That is it for meeting #1!  Next up – figuring out a budget.  Don’t let this meeting end without making sure you’ve agreed on what needs to be done next — your personal action steps.  New accounts need to be opened? Names added to existing ones? New checks ordered/debit cards requested (or destroyed!).  What information do you each need to bring to the next [budget] meeting?  And just when is the next meeting anyway?  And since it is all written down in your Money Meetings Binder, you both know just where to look if you forget… .

And remember – the goal of marriage is not to think alike, but to think together.

Questions or comments, please send them to me at derek@tsfavors.com.

 

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