1 Finance Money and Relationships Part 2

In part 2 of the episode "Money and Relationships," the host continues the conversation with Kalpesh about enhancing financial compatibility in a relationship. They discuss important aspects to discuss in the early stages of a relationship, such as financial situation, earnings, spending habits, savings, and liabilities. They also talk about setting financial goals and understanding each other's financial habits and awareness. The host emphasizes the importance of establishing financial compatibility early on. They then discuss post-marriage situations, where the couple may face challenges due to their different financial backgrounds and mindsets. The host suggests considering past experiences, trust, and individual financial awareness in shaping the couple's financial strategy. They also mention the importance of understanding each other's financial DNA and perspectives. They speak to a mental health therapist, Ayushi Shah, who advises initiating meaningful conversations about money a Welcome back to part 2 of the episode, Money and Relationships, navigating financial discussions with your partner. In part 1, I had an interesting conversation with Neha and Deepak, a powerful young couple who shared their approach to handling financial matters from the outset of their relationship. Also Kalpesh and Ashar, if you happened to miss that, take a moment to listen, I'll be waiting right here. Now I delve deeper into my conversation with Kalpesh, exploring how a couple can enhance their financial comparability and establish well-suited financial goals. So let's delve first into a little bit of an early stage of a relationship, I would like to divide it into two parts, first is the pre-marriage part, okay, the courtship period. Now as a couple starts getting closer to each other during this phase, there are very important points which they should start discussing, because I personally believe that if a level of financial maturity is attained at this stage, you know, with both the prospective husband and the wife, and if this bridge is crossed very early, you know, of a relationship, the couple would know their financial strengths and weaknesses from the very beginning. In Hindi, you might say that, neef bahut mazboot ho jati hai. What are the important aspects which can be discussed during this phase? Now first and foremost is that they should have a true representation of the financial situation. So just to put it in a lighter way that, you know, you could be earning at that point of time say 10,000 rupees salary when you are very young or 15,000 rupees, you cannot keep on throwing out parties for your partner and spending 5-6,000 rupees on every dinner or something. You should just be spending or telling your partner, this is what I am earning right now, this is what I am capable of, you know, spending on our enjoyment or whatever we are doing. Now that is a small thing what I am mentioning, but it gives a true representation of the personality of that individual person, that he is not going beyond his means and spending just to impress his prospective husband or wife, whatever it is. Second, they should be discussing if both of them are working, their present earnings, okay, that what are they earning right now. Third is their spending habits, they have to, you know, be very frank and open about it whether they are spendthrift or whether they are conservative and then try to just evolve each other's habits and come to a common platform or a common ground which is difficult. It is a little bit of a utopian thought but no harm in trying at all. Now also question to be asked is whether they have a habit of saving money, investing money or doing nothing with their money. And third is the existing liabilities if that person has on him or her because then, you know, he will be half the time just clearing those debts which he has and leaving no other cope for fulfilling that family's or their personal financial goals or dreams which are to be achieved post marriage and also their family's financial status needs to be understood. So then there is no issues which or expectations set from the beginning which might then be broken when they face the reality. Then the couple can start, you know, dreaming, aspiring about, you know, what they want to do in terms of financial goals, how would then they create wealth over a 20-30 year period, how much would they chip in on a monthly basis, then they would have children and again a host of other dreams and aspirations start. I completely resonate with the importance of establishing financial compatibility at an early stage and as you rightly pointed out, this sets the foundation for a strong financial future for the couple. But what if we are already past that stage? What do we do if we didn't have this conversation before marriage? So this then starts the story for the chapter number 2 which is then post marriage. What if a typical situation where it's an arranged marriage and they land up in front of each other and they are confronted with all these financial situations and challenges which every couple would probably face in today's times. This all again starts from the behavioral mindset that and I have seen that why does this happen? The unusual behavior is that it emanates from the past experience of their respective family behavior with regards to money. So say for example, the boy is coming from a family which is very, very conservative. His father, his grandfather have always been very, very tight about their money and investing and spending habits and everything. They only invest in FDs or something like real estate or very conservative and they have not seen the actual investing spectrum and the girl is coming from an exactly opposite type of a culture wherein her parents have been very, very liberal. She has seen her father probably invest in equity markets and be aggressive with his investing habits and taking risks and everything. Now what the point I'm trying to make here is that that traits will come into the respective boy and the girl automatically because nobody is that financially savvy by birth. Second is the level of trust which develops mutually between the two people as they face certain situations in life, the level of security which you feel with your partner. Now in today's times with due respect to that thought process, the boy and the girl would also like many people would say today that keep our finances separate and the third is a very important point with not many people touch is also like what I said is about the individual's financial savviness or awareness. So even if I'm an engineer or even if I'm anything remotely not doing with finance, is there a spark of personal finance which I want to learn and understand. So these three points which I just mentioned past experience of the family, the level of trust which the couple has between itself and the individual financial awareness play a very important part post marriage how things would shape up. Fascinating insights Kalpesh, discussions about finances lay the groundwork for a relationship and an ongoing dialogue with aligned expectations is crucial for the financial well-being of both individuals. This sentiment aligns with the perspective of Sankana Shah as well, the founder of Money Care Financial Planning. According to her, it is the financial DNA of the individuals that should be considered to determine the couple's financial strategy. So let me give my own example rather than anybody else's, I would be lifestyle driven, my husband could be growth driven, you know, security driven, the way we look at our finances would be very different. So if you put that on paper and try to come as a balance, if the both of them are saving together, then the strategy is more taken care of, you know, you know, how much you should be spending, how much you need to save to achieve a particular lifestyle, and then comes the asset allocation, and then comes the product. From the goal perspective, you have to know, what is your financial DNA? How do you see finances as, which could be natural and learned behavior and both can differ also. Whether it's a couple or a family, everybody differs, it's their natural behavior that comes up. I mean, you have to know how do you perceive money as. Understanding one's financial DNA and recognizing the diverse perspectives within a relationship or a family is surely quite important. Now to go further deep into the psychological aspects of steering these differences, I spoke to Ayushi Shah, a seasoned mental health therapist at Comfort Couch. Ayushi, welcome to the discussion. Ayushi, from your perspective, how can couples effectively initiate and handle these money conversations, considering the inherent differences that may arise? Thank you, Ashish. To truly understand each other's perspectives about money, it's important to dive into meaningful conversations to begin with. When it comes to money, each of us has a unique story. It's important to dive into these narratives to truly understand each other's perspectives. Maybe think about the role money played in your life growing up. Was it a source of security or stress? You know, how were conversations around money, like investment, savings, finances, managed in your family growing up? Then reflect onto these aspects and how they've shaped your current financial attitudes. Then maybe sit down with your partner and openly share these perspectives and insights. It's not just about money or budget. It's about understanding the why behind our financial habits and frustrances. By doing so, you're not only understanding your partner's perspective well, but you're also respecting their financial identity. So these are some of the ways that can truly help us to understand the values that each individual may bring to the table. That's a valid suggestion. However, money tends to evoke deep, almost unconscious emotional responses in individuals, right? Given this, what recommendations do you have for effectively managing and addressing these emotions in the context of financial discussions? Yeah, I agree. Talking about money can trigger a whirlwind of emotions, from anxiety to stress, from excitement to hope. The first thing to remember is that these emotions are a very natural part of the conversation. The key here is to recognize and validate each other's ideas and opinions around these issues. If you find that a financial discussion is starting to heat up, maybe take a step back and understand the emotions that are at play. Are you anxious about future expenses, any upcoming budget issues? You know, maybe then share these feelings with your partner openly and talk to them about it. Empathy plays a huge role here. Try to see the situation from your partner's perspective and actively listen to their concerns. If the emotional temperature of the conversation is getting too high, it's completely okay to take a step back and come back to it when both of you feel more calm and collected around it. This does not mean that you're avoiding the tough talk. It just means that, you know, both of you want to make sure that you're in the right headspace and are trying to manage these conversations productively. By managing your emotional response this way, you're not only managing the conversations well, but you're also creating a safe environment for both the partners equally heard and understood in these different conversations that a relationship may trigger in your practical day-to-day life. And are there any techniques to handle these emotions better? There are a couple of techniques that come to mind. I think the first technique that can be really effective would be using I-statements. So, for example, saying, I'm so worried about our savings goal, instead of saying, you're not saving enough to your partner. This approach helps you to focus on your personal feelings rather than putting the blame onto your partner. It's also important to remember that, you know, scheduling these discussions can help very effectively. So, if both the partners are aware that a financial talk is coming up, they have a chance to mentally prepare and be ready for it, and, you know, in turn avoid like a surprise, you know, reaction to it. It's also always okay and important to remember that it's completely fine to ask for a third-party neutral help, whether that's through a financial advisor or a therapist who can offer, you know, impartial advice and can help keep conversations on track. These strategies, of course, are not just meant to, you know, keep calm during difficult conversations but are also, like I said, meant to create a safe environment where both partners have the chance to freely discuss any financial concerns or decisions they may want to take in and around the relationship. Some very important points shared there by Ayushi. Now, as I wrap up my discussions with all the experts on the show, let me share my recommendations for all of you. First things first, acknowledge that marriage is a union and so should be your finances. It's a partnership and that means embracing a significant portion of earnings in a joint bank account is a serious option to be considered. Now, address the disparities in your spending habits. Perhaps one of you delights in designer labels while the other finds contentment in economy store treasures. It's all about finding a middle ground that aligns with your actual income and not your wishful thinking. Recognize the diversity in your personalities. One of you might be a budget-conscious nerd while the other takes a more carefree approach to finances. Instead of weaponizing these differences, celebrate them. Collaborate on budgeting because at the end of the day, you both are on the same team. Salary differences should never translate into power struggles. Equality is the guiding principle. Conversely, don't let a lower income or a stay-at-home role diminish your influence. You're standing on an equal playing field and transparency is non-negotiable. Secrets and hidden purchases erode trust. Whether it's a hidden account or a concealed credit card, it's time to come clean. Rebuilding trust involves realigning with shared financial goals. Establish expectations together. Unrealistic goals often lead to conflicts. Your financial journey is unique, so chart a realistic course that accommodates both of you. Don't let societal pressures dictate your timeline. In matter of parenting and finances, collaboration is paramount. Discuss how to budget for your children's needs and, just as crucially, their desires. Consider introducing chores and allowances a valuable lesson in responsibility. Ultimately, constructing a sturdy financial foundation demands time, effort, and commitment to treating your spouse as a teammate. Remember, you chose this person for a reason. Embrace their skills, insights, and perspectives, especially the ones you lack. Investing for finances is a significant task, and the expertise of a qualified advisor can be invaluable. Then help us spread the message, and until next time, stay financially empowered. This is Temperament by OneFinance, produced by Wine Studio, and I'm your host, Ashish Chawla. Investment in securities markets are subject to market risks. Read all related documents carefully before investing. The securities quoted are for illustration only and are not recommendatory.