Leslie Gardner, a Nanaimo, B.C.-based money coach, recalls a recent moment where she was sitting down with a married couple to talk finances and the wife was very quiet.
“When I asked her how she viewed their finances, she said she feels like she doesn’t know what is going on and fears they’re in trouble,” says Gardner, who works with Money Coaches Canada. The husband was shocked by her answer. “He said he had no idea she felt this way, he just didn’t want to bother her with finances.”
As it turned out, the couple was in great shape, they just hadn’t been communicating. “It changed their relationship for sure and they can see results towards their goals,” says Gardner.
But not all Canadians have reached this point of openness with their partners. According to a recent survey by CIBC only 35 per cent of Canadians who plan to marry or live common law say they’ve sat down and had a proper talk about money despite the fact that 99 per cent of those polled consider it important to develop a plan to manage their finances as a couple.
For those who haven’t had “the talk” 83 per cent admitted they were at a loss for how or when to bring up the topic and were going to “play it by ear.”
“The conversation should absolutely begin before marriage,” says Gardner. She points out that everyone has a different view on finance, often fuelled by their parents’ own relationship with money and handling finances.
“Some have fear that they will end up broke like their parents, some feel ‘things will work out’ without really having a handle on finances,” she says. “So a frank conversation around money beliefs, I think it’s crucial.”
On the other hand, not knowing your partner’s beliefs can create tension. Another survey, this one conducted by chartered accountants MNP in 2013, one in four married and common law Canadians say financial stress is affecting their relationship with 20 per cent of Canadian couples in general feeling strain in their relationship as a result of their current debt situation.
“It’s not hard to spot when finances are a marital issue, which in most cases it’s the main cause of their unhappiness,” says Gardiner.
Researchers at Kansas State University have found arguments about money to be a top predictor of divorce.
How to have ‘the talk’
While Gardner suggests having the money talk before marriage, regardless of when it occurs it should include some critical elements.
“All financial plans should start with goals,” says Gardner. These goals may obviously change over time but can include things like buying a house, starting a family and buying a new car. “Having a plan can keep you focused on the important goals and keeps you from overspending on items you don’t really need.”
It’s important to also include your individual goals in the plan.
“For example, a husband may want a motorcycle, a wife may want to buy clothes when she wants to without feeling guilty,” says Gardner. “Both goals can be achieved within a plan.”
The money coach often tells clients to “give their money some time” and have patience – time to look at the numbers, to save, to let the money grow and pay down debt.
“Once you know what you’re saving and working for, then you can implement this by having a realistic workable spending and savings plan… which is essentially a way to live within your means,” she says. “Our rule is you must be balanced at the end of the month, if not then it has to go onto debt… on a monthly basis that is not acceptable.”
Case in point: If buying a home is a goal, then she recommends walking through a “fake buy.”
“We come up with what it will cost monthly to buy a house including property taxes, home insurance, repairs and mortgage payment, then we deduct off what they are currently paying for rent and the difference goes to their ‘down payment’ account,” she says. “If it feels too tight each month, then it means buy a smaller home or save for a larger down payment… when they do buy a home it’s a very easy transition.”
Having strategies like this can help fuel open discussion, making talking about money less daunting and more rooted in practicality.
Ultimately, says Gardner, the goal is to see one another as a team. She points to her first example where the wife felt like they were in financial trouble when in reality everything was fine.
“When I see these kinds of clients, the first thing to do is to bring forth and acknowledge each partner’s concerns, fears, feelings without any animosity – bring it out in the open,” adds Gardner. “Knowing each other’s money beliefs goes a long way to marital bliss.”