SMART MONEY: Have the Talk
By Brad Brain
I am married to an amazing woman. My wife Holly is also a financial advisor. That’s how we met, at a financial planning conference.
Now, you might think that, with two financial advisors in the household, that all of our own personal financial affairs would be textbook. Everything up to date, on time, on budget, fully planned out and executed to perfection.
Yeah, not really.
I can assure you that there are lots of things that our family could do a little differently too. Which is what gave me the idea for this week’s column…
One of the things that you will hear is the importance of talking to your family about money. Seriously, this really is important.
So it is interesting that, in this household of professional financial advisors, a little while after marriage something financial came up and it left me thinking, “Hmm, probably should have discussed that by now. Oops!”
Which brings me to my point. We can all agree that talking to your family about money stuff is just a smart thing to do. But, if even two professional financial advisor spouses can procrastinate on this very important thing, then you can see how easy it is for regular folks to forget to make time for the money talk.
Why did Holly and I take our own sweet time on discussing our own finances? Its not because we don’t think it is important. We are unanimous that it is very important. It’s just that Holly and I always seem to have something else that we either want or need to do at that moment.
Just like you do.
That’s how procrastination works. We know we should do something, but we put it off.
The purpose of this column is two-fold. The first is to reassure you that even professionals are not perfect, so don’t beat yourself up too much. But the second, and the most important reason, is to encourage you to fight through the procrastination and make the time to have those important conversations about money with your loved ones.
The number one reason why couples fight is about money. The number one reason why couples get divorced is a breakdown in communications.
For some reason in our society talking about money is sometimes frowned upon. But if you want a healthy relationship with your spouse, you best not have money secrets.
It’s not uncommon for spouses to look at money differently. This can be a significant source of stress and irritation. Maybe one spouse thinks that a night out is deserved, but the other spouse can’t enjoy the evening because all they are thinking about is the bill that is coming at the end. So talk it out.
It’s more than just looking at money differently. It’s also not uncommon for someone to assume that their spouse sees things as they do. Things that they feel are obvious. Meanwhile the other spouse is oblivious to the source of concern.
And why wouldn’t they be? After all, they don’t look at money the same way that you do. But you can imagine the potential for hostility when one spouse is oblivious to what their partner thinks is obvious. So talk it out.
It's important to know that not everything about money is a right or wrong answer. Take perception of risk as an example. One spouse may be conservative, the other aggressive. That doesn’t mean that one is right and one is wrong, but they are different. So talk it out.
One of the things about life is that inevitably it ends. 100 percent of the people who read this column are going to die. That doesn’t mean that you should stop reading though. 100 percent of the people that don’t read this column are also going to die.
Despite this inevitable certainty, half of the population does not have a will. Your will is the document that speaks for you when you are not around anymore to tell people what you want done with your stuff. Its important. It’s necessary.
Even for the people that have wills, some of them are no longer relevant. I have seen lots of wills that talk about the guardianship of the kids if something happens. Except the kids are fully grown adults now.
If your will hasn’t been updated in many years then its likely not going to be as efficient as you may think. A will is not a one-time document. It should be updated as your life evolves.
And even for the people that have current wills, it’s still good to talk to the family beforehand and tell them what you are thinking. I have had clients pass away with a will, and terrible family fights still occur because someone did not understand what Grandma’s will meant. So talk it out.
Most families in Canada don’t talk about money as much as they need to. Even mine.
No excuses, have the talk.
Brad Brain. CFP, R.F.P., CIM, TEP is a Certified Financial Planner in Fort St John, BC. This material is prepared for general circulation and may not reflect your individual financial circumstances. Brad can be reached at www.bradbrainfinancial.com.