Money Chatter – Talking About Money
NOTE: This article written by Tony originally appeared in the September 2016 edition of Grey Power magazine
Over the years of being together, couples have been able to steer their way through the myriad of life’s experiences, sometimes with communication regarding their personal finances or future money planning being left to another (later!) time.
Let’s face it, money is a difficult subject to talk about at any age or stage. It means different things to different people. Studies have shown that having conversations about money is one of the leading causes of disharmony and disagreement in couples so not surprisingly it becomes a subject easily put off until you absolutely have to.
We’re all wired differently when it comes to money. Each of us have been influenced, in part, by how our parents conducted their financial arrangements as we were growing up and by the habits and reactions of partners and maybe even friends.
Several years ago, I presented a seminar on life planning to a group of medical professionals. I challenged the group to think whether they had good ‘money communication’ with their partners. At the end of the presentation, one of the partners came up to me and said:
‘You’re absolutely right. I have been trying to get my partner to take some time to consider these important issues – but he’s always too busy. I am worried that time is marching on and we are not as well prepared as we should be.’ (they were both in their mid-sixties)
I have been trying to get my partner to take some time to consider these important issues – but he’s always too busy
Our experience suggests that this is a common situation – but the problem which faces people in this situation is – how do we ‘break the cycle’? Some people just prefer to act like an ostrich by putting their head in the sand, hoping the threat will go away. It seldom does!
As financial advisers, we never thought that part of our role would be to facilitate couples by helping to open the lines of communication. We have found that for any financial advice to be successful, clients need to be on the right wavelength – not just with us – but with each other. We have lost count of the number of clients we have worked with where we have first had to get them to talk (meaningfully) with each other regarding their finances.
We have found that sometimes it’s one partner that takes on the ‘financial lead’ which works fine as long as the other partner is happy with that arrangement & is kept in the loop. A study several years ago in the US found that just 28% of couples were ‘completely confident’ that either spouse could steer the financial ship into retirement.
Unfortunately, we have found that lack of communication can be a matter of real concern especially relating to retirement if both aren’t on the same page. Expectations of how and what retirement looks like is very individual. This can be from the timing of retirement to what they’re going to do in retirement. One partner might be happier to spend more lavishly during retirement when the other has a more conservative approach. Neither is right or wrong – they are just different and need to be discussed before resentment creeps in.
Also a big concern is that we’re living longer so those in retirement, or heading into retirement, are facing the dilemma that we don’t outlive our financial resources. We’re lucky that we have NZ Super as a base line for our over 65’s but what’s the guarantee that it will be there in its current form into the future. The Commission for Financial Capability recently announced that if the tax rates remain the same, from the mid 2020’s the Government will not have sufficient revenue coming in to meet its expenses. That’s a scary thought for a lot of the baby boomers coming into retirement. That makes it even more important that we can talk to each other about money and what the future holds before it’s too late to do anything about it.
But it’s not just in retirement that communication can be a problem. By this stage of a relationship, old habits have become entrenched. Earlier in a relationship, it is important to have good money communication but how do you do this?
Some people manage ok by themselves but some people need help. In days gone by, you could get help from your friendly local bank manager. You are much less likely to find this a good source of advice today. We believe this facilitation is now filled by skilled financial advisers so encourage you to get in touch sooner rather than later to reap the rewards open and honest money communication provides both now and in the future.
IMPORTANT NOTE: This article is of a general nature and is not personalised financial advice.
Financial Impowerment Specialist
Tony Walker is the co-owner of ImPower Limited. He is an Authorised Financial Adviser and Certified Financial Planner (CFPCM) and his disclosure statement is available free of charge on request by emailing Tony at or by calling him on 021 656 223.