February 23, 2022

Talking to Your Partner About Money

Money can be a tricky topic, and talking about it with your partner can be challenging. Regardless, it is essential and ignoring it can lead to disastrous consequences. How do you navigate this complicated world of finance and love? Here are some suggestions:

1. SET UP A REGULAR TIME FOR THESE MEETINGS

Find times that work for both you and your partner, ideally when both of you are relaxed and can focus on the task at hand. Setting specific times also helps because you and your partner prepare in advance.

2. LISTEN AND DON’T JUDGE

One of the essential aspects of a relationship is listening to your partner, understanding them, and not judging them. So, it would be best if you carried this virtue into your money talks. It is normal for each of you to say something, the other may disagree with. Do your best to listen and not react emotionally.

3. SHARE YOUR VALUES

Good money decisions are made when both parties understand their shared personal values. Nevertheless, you will not comprehend such values if you don’t tell each other your values and what is important to you. This mutual understanding will help you both prioritize your money usage better and influence on your spending patterns.

4. REVIEW YOUR ASSETS, LIABILITIES, AND EXPENSES

Simply put, know what you own, what you owe, how much you earn, and how much you spend. It is useful to do this type of exercise every 3 months (or annually at minimum) and then graph your progress. Some couples may also benefit from doing an expense inventory, using a program such as mint.com; this can also be done manually using a simple spreadsheet.

5. WHERE IS THE MONEY?

You should also be able to ascertain where exactly your money is. Consider all your assets – cash, stocks, bonds, investments, cryptocurrency, This knowledge is essential for both partners. Make sure both partners know how to access accounts online, and the passwords for each account.

6. WHAT IS YOUR INVESTMENT POLICY STATEMENT?

It’s recomdended to have an investment policy statement (IPS) to guide your investment strategy. Simply put, the IPS is a GPS for your investments. If you have a financial advisor, he or she should help you draft an IPS. The IPS will also help protect you and your partner from making emotional decisions during peroids of market fluctuation.

7. WHAT IS YOUR RISK TOLERANCE?

It is pertinent for you and your partner to know how much risk and volatility you are comfortable with. This will also help guide your investment strategy. If you have a different risk tolerance than your partner, then make sure this is built into your investment plan in a way that is mutually acceptable.

8. DO YOU NEED A FINANCIAL ADVISOR?

A financial advisor can help you and your partner navigate your financial life, and guide you in many areas including investments, insurance, estate planning, and retirement planning. Be sure to choose an advisor you both get along with, and who pays attention to both of you.

9. BOTH PARTIES SHOULD BE REASONABLY INFORMED

In the event of a sudden emergency, it is important for both partners to be informed of the financial situation. Know where your money is, how it is invested, and how to access it. Make sure you are both adequately insured and protected against risk.

10. PLAN FOR THE FUTURE

Always plan for your future; never let it just happen to you. Have a budget, emergency fund, and plan for your investments and retirement. Know how much you need to save to meet your retirement goals. Invest regularly.

About Northfront Financial

Northfront Financial, based in Calgary, Alberta is a boutique full-service financial planning firm serving professionals and business owners. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst® (CFA®), Chartered Investment Manager (CIM®), and CERTIFIED FINANCIAL PLANNER™ designations.

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