Crayon Conversations: Money Conversations with Your Partner

20 Sep

Crayon Conversations is your chance to hear from the experts in the field, dive deep into their area of knowledge and ask your own questions. Sign up here to find out about our upcoming conversations.

In this conversation, we speak with Lynda Moore, founder of Money Mentalist. Lynda is a mother of one, an accountant by training and now a money mentor coach. Talking about money is tricky for so many of us and Lynda shared her insights from having helped hundreds of couples regain power or finances.

This conversation has been edited for length and clarity. Watch the original recording here.

Steph: How did you become a money mentor coach?

Lynda: I had an accounting practice, and I noticed with my clients that when things happened in life, they stopped looking at the numbers. When my own marriage ended, I responded exactly the same way. This got me curious, so I went back to university to study psychology. It turns out that 80% of our relationship with money is actually mindset-based and 20% is about the numbers.

I started working with my mentor David Kruger, which enabled me to turn my own financial life around and I became a certified coach. I still love numbers, but I use them in a very different way and wrap psychology around money to understand why we do the things we do. Often it’s how we behave with our money that makes the numbers work or not work.

Steph: What does a healthy relationship with money as a couple look like? And what about an unhealthy one?

Lynda: A healthy relationship with money is being able to communicate about it. And I don’t just mean the transactional stuff. A healthy relationship includes having those harder conversations about each other’s values, beliefs and vision for the future and a shared understanding of money's role in this.

You also have to know your numbers – what’s coming in, what’s going out, what you own and what you owe. I do not like the word budget; I call them money plans because it's an important part of your life plan. Money is part of your self-care, the same way you look after your health.

As for an unhealthy relationship, I can go back to my own relationship. We didn't talk about money at all, and I absorbed all the stress because I was our money manager. We just put our heads in the sand and carried on living a lifestyle that wasn't actually sustainable until it broke.

Steph: One in three Kiwis rarely or never talk about money to anyone. Where's a good place to start if people don’t feel confident talking about money?

Lynda: The easiest starting point is the transactional ones. For example, “Have you noticed this?” And then you might talk about the money situation of some friends or people in the media. If you try to bring it straight into your own household and you or your partner aren’t used to talking about money, it can feel very threatening because money can bring up a feeling of inadequacy.

Another great place to start is to identify your money personality. Often what tends to happen is we fall in love with our opposite. Five years on, those polarizations can start to cause problems.

Please never hijack a date night to start talking about money!

Steph: Money is the number one topic couples fight about and the second leading reason people get divorced. How do you break that cycle? And when you find yourself in the heat of a money argument, what can you do about that?

Lynda: First of all, is the argument really about money? Money is a really easy thing to argue about. Sometimes the argument really is about money, but sometimes money can be used as an argument to mask other things within the relationship. And those other things tend to be around self-esteem, power and control.

It's really hard in the heat of the moment to actually sit back and stop. The Gottman Institute has some amazing resources for handling arguments with your partner. Based on their research, 80% of our arguments will be the whole of our relationship!

The key is to reflect on the argument together to pinpoint what you were really arguing about once emotions have calmed down. This is only possible if you have a really strong foundation.

Arguments that are truly about money usually arise because two people are polar opposites. For example, one of you thinks too much money is being spent, and one of you thinks the other is being stingy. Or one person feels like they have no idea what’s happening and may not want to know even though their partner is trying to tell them.

Steph: For context, the Gottman Institute is a husband-and-wife research team specialising in couples. They have many wonderful resources, including a book called Eight Dates.

Money is so much more than the numbers - it represents control, power, independence, dependence, success and self-worth. How can couples handle a money imbalance in a relationship? For example, if one person earns a lot more or comes from a wealthier family.

Lynda: There’s no hard and fast rule for handling money imbalance. The key is to make a conscious decision, which many couples don't do.

Understanding how you each relate to money is a really important starting point. If you can, look around at examples of how others manage their money to get a sense of what might work for you. I've worked with some couples for whom I would never suggest merging accounts because of their personality styles, and then there are other couples for whom a total merge makes sense.

Steph: What are some of the ways couples can structure their finances?

Lynda: You want to start talking about money when you’re past that initial dating stage, and you're starting to look at longer-term planning – when the toothbrush starts moving! Start by observing your partner. How do they behave with money in a social setting? Are they the ones always buying the rounds of drinks? How does that make you feel? How does your partner respond when you do things?

I suggest you set up a small joint account and see how you go with managing it. You need to decide how much money you're each going to put into and what it's going to be used for (be really clear about this). This is your first money conversation.

When you start living together, you should have your first joint account that covers the fixed and shared costs, such as rent, power, insurance, phone, and internet. You’ll need to decide whether you both contribute equally or you adjust for different income levels.

A lot of couples will stay in that mode for a long time. The next step is usually triggered by a big decision such as starting a family or buying a house. You should be in a position of trust by then to know what each other earns and how it’s being spent. It really surprises me when my mortgage broker friends share that they get couples turning up in their offices and it's the first time income has been disclosed to one of the parties. If you trust this person enough to have a family or own a home together, you should be able to merge your finances. Not to mention, it can save quite a bit of wastage.

You always want to have pocket money - an amount of money each of you has to do whatever you like. It’s “free money” and outside of your money plan. The amount will differ from family to family. Pocket money is so important because it can help stop financial infidelity (see definition below). It doesn't have to be equal. Usually, the one who does most of the child management will need more free money because they tend to pay for more bits and pieces when they’re out and about with the child.

The only time that I would suggest that you do not merge is if:

You have some of the warning signs that you need to do more work on your money relationship as a couple (eg you don’t communicate about money)
One of you is in a lot of debt that needs to be cleared so that it doesn’t affect the credit rating of the other person
If there are any addictions one person is dealing with.

*Financial infidelity is when one person makes financial decisions and hides them from the other. There can be a huge financial fallout that can take a very long time to recover from. We all do little bits of financial infidelity. Maybe we buy something, tuck it away and then bring it out months later saying, “Oh this? I've had this for ages”.

Steph: When you go on parental leave, your income can drop, particularly if you’re the primary carer. How do couples navigate this temporary but significant income drop for one person?

Lynda: Planning. Get into the numbers and know where your money is going and what you can change. The earlier, the better. You generally have six or seven months to plan so don’t wait until you have this beautiful bouncing baby and discover it’s a struggle to pay the rent.

If you’re already in it, you must make some fairly short, sharp decisions about your expenses. Look at all your expenditure over the last couple of months to see where your money is going. Because we now heavily rely on cards, we lack spending awareness. From there, you can identify the waste to cut back on. What can we tweak? What can we change so we can still get some enjoyment, but it doesn't cost us as much?

Do you need all five streaming services? Probably three will suffice. Notice I'm saying cut it down, not cut it out. There will be things that you know you can cut out. Are you really going to have time to go to the gym in the next nine months? If not, put that on hold.

Steph: One thing that surprised me when I went on parental leave was feeling vulnerable and dependent on somebody else. If you find yourself in that position, what can you do about that?

Lynda: This is where your pocket money account comes into play. You still need to have that even if it’s not as much as before. It's also the teamwork of managing the money together and having a financial date once a month, giving you visibility.

Right now, there’s a lot of financial anxiety because a lot is going on, prices have gone up etc. The first thing I suggest to couples is to just talk about how they’re feeling and what they’re worried about now. As you have that general conversation, you may realise it’s linked to a money issue.

Steph: Is it ok if one person often takes the lead with money?

Lynda: If you’ve both agreed to that and as long as there's still communication and visibility, then yes it’s okay. One person will generally take on the responsibility to ensure the bills get paid etc.

If you're in a situation where the person who takes total control will not share the information with the other party, and you find yourself asking questions but not getting answers, then that’s a red flag.

Steph: If you're not the one taking the lead, what should you be asking or doing?

Lynda: You need to have access to the bank accounts and feel that it’s okay to be checking the accounts. I’ve had conversations with quite a few couples where one person has the login details but still doesn’t feel like they are allowed to access it.

Financial dates are also really important. Have a set time once a month to review your finances for 30-60 minutes. Initially, the conversations will be more transactional in nature, but as you progress, they’ll become more about planning. What's gone well? What are we planning for? You could try pairing it with something you enjoy planning for, like your next weekend away.

[This reminds me of temptation bundling]

Steph: If your partner is reluctant to talk about money, how can you get them on board?

Lynda: There are generally two sources of reluctance:

If your partner doesn’t want to know, then you can let them know their lack of engagement is causing you stress. Often that person doesn't know that having sole responsibility for all the finances puts a huge weight on their partner’s shoulder. They tend to be the “avoider” money personality and often don't want to know because it can make them feel incompetent or inadequate.
If you have a partner who won't tell you, then you have to put your own oxygen mask on first. Start being proactive about looking after what you can control. I worked with a couple in this situation. He didn't want to engage at all, so we put a plan in place that made her feel comfortable that she wouldn't lose the roof over her head. Once her anxiety about money was reduced, he started coming to the party.

Steph: How can couples be accountable for what they say in their money conversations?

Lynda: If one person does something with money that they said they wouldn’t, then either it's because they agreed to it when they didn't really intend to do it in the first place, or they agreed with the best of intentions but slipped up. On financial dates, you can ask questions such as:

I thought we had an agreement to do X. Did I misunderstand what happened?
How did we not manage to do this?
Did something change along the way that we need to address?

It comes down to debriefing, and it's possible that you may find yourself having a robust conversation.

Steph: One of the techniques I heard from Brene Brown was to use the phrasing “the story I tell myself when I see you do X is…”. It's a good way to convey how their actions made you feel, which might differ from their intention.

Lynda: That's right because we all look at things from our own money story. For example, you might be a saver and your partner is a spender and in the heat of the moment, it’s hard for them to resist. The 10-second rule applies: you need at least 10 seconds for the rational brain to kick in! We've had these habits for a long time, and you’re actually asking a lot to change that behaviour and money mindset. Change is a process. It's not an event. You’ve got to allow that process, tweak it and talk about it. Communication is the key.

Steph: How regularly should couples be talking about money and what tactics can couples use to meet in the middle?

Lynda: At least once a month. Run your household finances like a well-run business, which means you've got plans and you're monitoring, reviewing and talking about them.

One exercise I did with a client was drawing a vertical line on a piece of paper (representing a $ value spectrum). We took the example of going out for dinner. You might have Mcdonald's at the bottom and a super fancy restaurant at the top. You then each indicate where on the spectrum you’re comfortable with it being a joint expense, and where it becomes your own (out of your personal pocket money).

The line helps you understand in a visual way where you are both coming from, rather than just trying to talk about it. Where you mark the line will be a reflection of your money personality and your values. If you have something you’re both working towards, compromise becomes much easier because you're on the same path.

Steph: Thanks Lynda. Are there any resources you want to share if people want to take this conversation further?
Lynda: On my website, you can find the money personality quiz and two ebooks. ”Couples and money” can guide you to build the financial life you want together and “Spice up your relationship with money” is about your individual mindset towards money. You can also sign up for our mailing list to receive our newsletter.

Watch the Recording

Now for the important legal part: The information we provide is general and not regulated financial advice for the purposes of the Financial Markets Conduct Act 2013. Please seek independent legal, financial, tax or other advice in considering whether the content in this article is appropriate for your goals, situation or needs. The information in this article is current as at 22 September 2022.