One definition of intimacy is “something of a personal or private nature.”
Wealth is one of the most intimate, personal, and private components of our lives. Our wealth involves so much more than how much money we make, save, and need for retirement. Wealth is a critical, all-encompassing aspect of our lives that affects our mental and physical well-being, our careers, our lifestyles, and our relationships. When we connect well, and deeply/intimately, with our loved ones on money issues, it makes it easier for us to connect on everything else.
Yet, as discussed in previous blog posts, money continues to be a somewhat taboo subject among Americans. A 2023 study found that 62 percent of Americans don’t talk about money. This is unfortunate because talking about money helps everyone in the family, including children, to get on the same page, financially speaking.
Each family member has goals and dreams, and the best way to address them is to discuss financial priorities as a family.
The “2024 Couples and Money” study from Fidelity reveals a need for couples to improve their communication and to share decision making to manifest financial harmony within their relationships. More than one-third of couples reported disagreements on their upcoming major financial goals.
So, how can couples and families move from not discussing money at all to sharing “wealth intimacy”? Here are five tips for achieving wealth intimacy.
1. Discuss money before you get married
According to AICPA research, nearly 73 percent of married or cohabitating Americans say financial decisions are a source of tension in their relationship.
The best time to start discussing money with your partner is before you get married. You and your partner need to discuss how much debt you’re each carrying and what your financial goals are for the future, for example. Having these discussions early in your relationship will get you in the habit of talking about money and your differences surrounding it.
During these discussions, set some joint goals — decide which purchases and experiences you will both save toward — but also set individual goals. And speak up! It is easy for resentment to set in when one partner seems to be getting all his or her needs met while the other one is not. Also, decide on your short-, medium- and long-term priorities. Build a budget together, and meet regularly to discuss how to rein in expenses. Interview financial advisors and choose one you both feel comfortable with, if neither of you is already working with an advisor.
Couples who align their financial goals have the opportunity to thrive more than their single counterparts.
A recent study found that married people had 93 percent higher wealth per person than singles — and that wealth constitutes more benefits than simply combining the wealth of two people. Having a partnership opens up a wider range of financial strategies for building wealth.
True wealth can add up when both partners save money over time. For example, let’s say a couple makes $100,000 a year and invests 25 percent of their income — which they derive, in part, from sharing a mortgage on one home and sharing other expenses in marriage. Let’s assume they earn 6 percent on their investment. In 30 years, that couple will have more than $2 million.
2. Increase transparency through disclosure
When we make the choice to be more open with our family members about money, that transparency begins to help everyone voice their opinions, concerns, and dreams. To make this happen, the adults in the room must agree to disclose financial truths that we might have avoided discussing in the past.
Increasing transparency through disclosure reduces the all-too-common “top-down” control dynamic that is prevalent in many families, with the parents dictating who will know what, and when. Of course, you want these disclosures to be age appropriate. Discuss topics that are easy for your children to understand. You can increase the complexity of those situations as they get older.
One of the questions parents sometimes ask us is, “When should we disclose to our children what our assets are and our plans for wealth transition?”
We really like it when people ask us this question because too many people avoid the topic altogether, and then the children, whether adults or not, learn all these important details in an attorney’s office once their parents pass away. When you increase wealth intimacy over time, your family members will have time to make plans of their own, based on what they might inherit from you.
There is no good reason to keep your will, estate plan and other documents a secret!
3. Be compassionate with one another
Each of us develops a relationship with money, and a mindset about it, based on the environment in which we grew up. We pick up ideas and beliefs about money from our families of origin, our close friends, and others. Many people aren’t even aware that they have certain beliefs about money, and therefore, they aren’t aware that they are taking those beliefs into their relationships.
Because our beliefs about money are so deeply embedded in our psyches, it can be easy for us to think we are right about certain money issues. When this happens, it’s tempting to try to influence those around us to have the same beliefs.
But this is unrealistic.
For example, we’ve known people whose childhoods were filled with the admonishment from their parents, “Money is the root of all evil. People who have money are greedy and selfish!” With this mindset about money carrying them into adulthood, it’s no wonder these people who are now adults have a difficult time saving for the future.
The first step in turning such negative beliefs about money around is to be aware of them. And that is more likely to happen when we open the communication lines and discuss money. It is important that we agree to show compassion toward one another and to avoid judging anyone or making them feel guilty or shameful about money beliefs or past money mistakes.
Life never goes as planned. We each have a unique journey. Being compassionate toward ourselves and each other allows us to course-correct with wisdom, love, and mutual respect.
4. Increase your financial literacy together
Financial literacy is the ability to understand and various financial skills and to use them effectively. As they say, “Knowledge is power.” The more knowledgeable you are about financial concepts and products, the greater your chance of achieving financial success.
One way to get on the same financial page with your spouse — and children, if appropriate — is to increase your financial literacy together. Sit down and make a plan for increasing your financial knowledge in the next year. Read Tyson Rays’s latest book, The Total Relationship, discuss what you both learned from it. Watch our monthly Up or Down videos to gain perspective on the markets. Meet with your financial advisor together, and take a list of questions with you to discuss.
Key components of financial literacy include budgeting and expense management, saving and investing, debt management, retirement planning, insurance and risk management, and understanding financial products. Make a plan to learn more about each of these important financial concepts together.
5. Prioritize retirement together
Saving for retirement is one of the most important financial journeys you will take in your lifetime. It is extremely important to have open discussions with your partner about your respective retirement priorities.
We can’t count the number of couples we’ve counseled who never discussed this important topic until they were a few years from retirement. Then, when they did discuss retirement, the two partners realized they had entirely different priorities. This stressful and upsetting situation can be avoided if you begin discussions about retirement early in your relationship.
Of course, you will have different priorities! You and your spouse may not want the exact same things out of life or retirement.
Like all other money-related and other discussions, a successful retirement requires compromise on the part of both partners. What if one partner wants to retire in Italy, but the other wants to retire near the grandchildren? The first step in coming to a resolution is for both partners to be open and honest about their wishes and dreams. With compassion, mutual respect, and open communication, you can resolve such conflicts and find a way for both partners to achieve what they want.
Let your children know what your retirement plans are as well. Again, there is no need to spring surprises on them.
If you need a neutral third party to guide these discussions, consult your advisor or a family wealth counselor. Sometimes it helps to hear a new perspective.
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Increasing intimacy in our relationships can deepen our connections and help us understand one another better. If you’ve never considered “wealth intimacy” an important part of this process, we hope you will give it some thought. Let us know what you discover in the process. And, as always, our team is here to facilitate any financial discussions you want to have with your partner and other loved ones.
Any opinions are those of the author and not necessarily those of Raymond James. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
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