How to Talk About Finances with Your Spouse – Episode 237

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[00:03] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler. Welcome to the Prosperity Podcast. Today we have our co-host, Kim Butler. Are you there with us, Kim? Yes. Happy, happy Monday. Yes. It is wonderful, isn’t it? So, today we’re going to dissect and talk about one of the most difficult conversations any couple has, and that’s talking finance. So we want to hear Kim’s insight on how couples can develop good communication when it comes to finance. Yes, this is a big question, isn’t it? And we know that the number one, I believe, reason for divorces is often listed as money.

[01:03] So yeah, let’s head that problem off early, early, so that it just doesn’t ever come up. And really, you already said the solution, it’s talking. Talking finances requires talking. And yet, at the same time, we think, oh my gosh, who has the time to do that? Well, include the kids. As a couple, include your kids at age-appropriate levels, of course, and with progressive information as they get older, and with a very clear understanding that this is private and we don’t share it. And so, there’s going to be some things that you probably shouldn’t share. You don’t want to accidentally hear your kid spout off your salary to the friend next door or what have you, but there are definitely things that you can include

[01:51] your children in, and I really, really encourage that. We’ll maybe do another podcast someday about kids and money more specifically. But back to the couple, it starts with just having good information, and it doesn’t have to be overly detailed. But you, from a cash flow standpoint, must have a sense of what’s coming in every month and what’s going out. And like I said, it doesn’t have to be overly detailed unless it does. In which case, if you are really feeling like you’re struggling and that there’s way more month at the end of the money, then you probably do need to get in and get the detail. But that’s fairly easy in today’s world with programs like Mint.com and You Need a Budget, etc. And I’ll give just our listeners a little hint in that we are going to be coming out

[02:45] with a new program for handling personal finances because the current programs that are out there, like Mint and You Need a Budget and Quick and QuickBooks, etc., etc., none of them handle life insurance very well. It’s like they don’t know what to do with it. And it’s so easy if you understand what you’re doing, but they clearly don’t. And so they don’t have a good spot for it. So anyway, people can just be on the lookout for a way that we will use to help people handle their money a little bit better in a technology way. And then you take that technology and you use it to have the discussions. So one of the things that’s important, as I said, is being clear on money in and money out. That has got to be on everybody’s mind all the time in a way that they can then make

[03:37] good decisions with regard to spending money. And so, for example, are we going out to eat tonight? Do we go to the local cheap Mexican restaurant or do we go have steak or whatever your decisions are? That kind of decision can be made just by talking. And one of my favorite things to do is to get a sense of importance to the person. In other words, it would go like this. Like, I’d like to go have steak tonight. Okay. On a scale of one to five, is that like five? I really want to go out and I really want steak and it’s really important to me. Or one, no, I just want some food. And so that way you can take the things that are really important. You know, let’s switch it around. You know, I would really like to buy this table for the dining room or whatever it is.

[04:36] Okay, you know, give me a sense, one to five, like how important is that to you? That way, like I said, we can spend money then on the important things rather than just having a approach that is not thought out at all and not discussed at all. And I think bringing in the one to five scale enables discussion to occur and nobody gets to judge. Like, there’s not a judgment as to whether steak or Mexican is better. It’s just for you, for this time, for this particular issue, how important is it to you? Is that making sense? That does make sense. That’s actually a pretty good approach. That way it seems like it can avoid a lot of arguments or disagreements and it clears up understanding. Absolutely.

[05:28] And then you go after the things that are important and you let go of the things that are not important. And I’ll use Todd and me as a good example. Food is very important to him. Food is not important to me. I could throw a protein shake in the blender and be as happy as a clam. But he absolutely likes spending money on food. Great. So I just understand that. And I know that that’s going to be a part of what we do when we can do it. Now, thankfully, we live in the boonies, so there’s not a lot of nice steak restaurants around easily accessible. But nevertheless, I’m well aware that that’s super important to him. I’ll switch the tables. So let’s say, for example, that you now want to get into discussions about investing

[06:15] or where to save money, that kind of thing. I think, again, it’s important to identify what’s important to the person. So for example, one person might want to be very security oriented, very protection of principle oriented, very, very peace of mind oriented. And so they need to state that and they need to, first of all, know it themselves, which is not easy. I will readily grant that. The more that you can ask yourself the good questions, how important is this to me and have that talk with yourself so that you’re clear on it in your own mind, then when you get together with your spouse, you can do a better job of having the discussion so that you get to be clear on not only your mind, but their perspective and their mindset on it as well.

[07:05] And then you can just go forward together if you feel like you’re on the same page, for example, around investments, or you can choose to split things up. You know, there’s nothing wrong with saying, hey, let’s say both spouses have a 401k plan that’s at work. You invest your 401k plan the way that you want to and I’ll invest mine the way that I want to. There’s nothing wrong with that. When dollars are commingled, for example, money comes all the way through into the checking account and now you’re making a decision. Do we, for example, use life insurance as our emergency opportunity fund or not? Then you talk through what’s important to you, you talk through what’s important to the other person and then you can make a decision together.

[07:49] That being said, I will readily admit that in many, many households, because everybody gets so busy, one tends to handle the bulk of the money decisions and it doesn’t matter if female or male, it just, I find that with a lot of our clients, pretty much one of them is handling the bulk of those decisions. That’s totally fine. I am not the kind of financial advisor that insists on having both parties present and both spouses in on the discussion. But what I do want to make sure happens is that the spouse that’s not interested, because that’s usually the case is just one of them is not as interested in it as the other. The spouse that’s not interested at least once a year should have a quick A summary of a list of assets, what we’re doing with our money,

[08:37] where the extra is going or if we’re having debt or having to work on paying it off, what progress have we made? You always, always want to be focusing on the progress. And so once a year, however it takes its form, a discussion should occur so that everybody’s on the same page around all of the areas of finances and that then the decision going forward again, even if still made by one spouse, can be a blend of the thinking of both spouses. That is a really good tip. Now, I think that for our listeners that maybe have the spouse or themselves, maybe they could create something like a special date or that’s something they do on vacation. I know it sounds crazy, but sometimes getting away from kids gives you

[09:25] clarity and opens that communication. Absolutely. Date night is a wonderful thing. I cannot recommend that enough. Todd and I try to do date night every Friday night. And again, in our small little town, it’s a simple dinner and frankly, a trip to Lowe’s is usually where we go because of his incessant desire for pieces and parts of things. But we at dinner have a chance to talk about those types of things. And you’re absolutely right. Sometimes getting away from it all and going ahead and getting a babysitter even on vacation is a fabulous idea. I was helping a friend recently who’s going through a divorce. So, you know, wish we’d caught him earlier. But he said, oh, my gosh, it’s so nice to just have a night to myself.

[10:11] No spouse, no kids, no nothing. And, you know, he’s, of course, sad about the divorce and they’re dealing with the kids and everything. But I thought, gosh, as married individuals, couldn’t we all just be proactive about getting the time that we want? So if it’s the two adults, if you will, going on a date without the children, be proactive, put it in the schedule, get the babysitter, make it happen. Or as in this case, if it’s truly an evening to yourself that you want, there’s nothing wrong with asking for that and saying, hey, to my whole family, this is something that I really need once a month, once a week, you know, whatever the time frame is. I just need an entire evening. Maybe it’s even at a hotel to myself to do what I want with nobody else

[11:02] bothering me, or maybe it’s a girl’s night out or a guy’s night out or whatever it is. Let’s bring that into the discussion of both the finances and just the general schedule so that it’s happening rather than just letting life happen to us all the time. And believe me, I know I get it. Though my children are not home anymore, I’ve lived through what just seems to be life in the fast lane, where it’s going so fast, it’s so difficult to get a handle on things. And yet, if you truly look at your time, you can do it. So if discussing finances is important to you, then put it on the calendar so that it will happen. If sharing information about your overall economic environment is necessary, and I believe that it is, for the health of your marriage,

[11:57] then once a quarter, once a year, whatever seems appropriate to you, block out a couple hours and make it happen. And that means for both spouses that you need to be committed to that because it’s no fun for the one that maybe wants to share if the one that is being shared with is frustrated and disconnected the whole time. That’s one of those give-give things that it has to happen in our marriage is you give 100%. And that means sometimes listening to things that we may not necessarily be super interested in, but it’s just wisdom to be at least remotely in the knowledge of our families, our households’ finances, so that we can be smart about it and be contributing to it together, even if most of the time we’re not dealing with it ourselves.

[12:48] I think you’ve shared a lot of wisdom and things that all of us can apply in our relationships. Now, the one last question that I have is, are there any suggested reading you have or audiobooks so that a person can give it to their spouse that’s not as involved so that they can learn a little bit more on their own time? Yeah, a couple of thoughts. First of all, you mentioned both reading and audio, and I love that because I think one of the most valuable things we can do as human beings is be clear on how we learn. And most people either learn by reading or they learn by watching or they learn by listening. And some people, there’s a fourth, sometimes spoken-of way, which is more tactile, like getting your hands involved.

[13:37] But as a general rule, most people will either read, watch, or listen. I know for myself, I’m a reader. I would prefer to read anything anytime versus watching or listening. It’s just how I learn. It’s just the way that works best for me. And so being conscious of that is so, so important. And in terms of specifics, I want to share one other thing before I answer that, and that’s that there is another option in addition to what we’ve talked about, and that’s to get a bookkeeper. And I will readily admit that we have had the best bookkeeper for over 25 years. Her name is Carrie. I absolutely do not know what we would do without her. And it takes the pressure off a lot of the discussions that would need to be had, because Carrie’s dealing with the bulk of it,

[14:24] and she has set parameters and knows what our priorities are. And so clearly, we had to have a discussion amongst the two of us before we were able to share those with Carrie. But that’s something that we can talk about maybe, or if somebody has specific questions, they can head them our way at hello at partnersforprosperity.com in the idea of hiring a bookkeeper. How do you do that? How do you start, et cetera? Because it’s just been a super helpful thing. You know, I think that having the bookkeeper, it does not mean that you fail. It means that you’re getting someone else on your team. And for our listeners, that’s something incredibly valuable to do. Absolutely. It was one of the first delegations I made

[15:04] after joining Strategic Coach. And I came from the banking world, like, and, you know, this was before computers, of course. I knew how to balance checkbooks. I knew how to reconcile credit card statements. But I did not like doing them. And so it just made it so much easier. It was just a choice of delegating my time that was better used elsewhere, not because I was above or beneath that particular activity, just that somebody else could do it so much better than I could. And then that enabled me to spend my time learning something else that was more important to me. So back to the books. Gosh, there’s just so many that I could suggest. And I really don’t have a good other one than what I’ve written

[15:50] in the top of my mind that would be a good what I would call personal finance book. So I guess I’ll just share the ones that I’ve written and, of course, the best one to start with because every family should start with their emergency opportunity fund. Like, I know everybody wants to get going on investments. But the fact is, if you don’t have your emergency opportunity fund started, you really shouldn’t be talking about investments. And the best place to store emergency opportunity money is the cash value of whole life insurance. So that means the best book to start with is Live Your Life Insurance, which is available as an audio book as well as a physical book. And it’s a short little read,

[16:31] and it will give you such great information about how life insurance works and how it can be your family’s emergency opportunity fund. So that’s Live Your Life Insurance by Kim Butler. Well, I think that’s a good plug. And they can go on Amazon. And again, you can read these on Kindle. You can order them or you can check out the audio books. Correct. Thanks. I think that’s a great stepping off point for our listeners. And in a next episode, we’ll even talk about how to incorporate the kids into finances. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.