7 ways to get your partner on board financially

By Bill Jackson March 16, 2023 9 mins read 236 Views

[Editor's Note: We’ve long said that the best possible asset protection for your family is a regular date night with your spouse. But sometimes busy couples need a little more guidance. That’s why 2023 WCICON speaker Dr. Kate Mangona wants to help with the Making Marriage Work program that you can join today! The program consists of eight weekly workshops where couples can strengthen their relationship, learn to manage conflict, and create shared goals. Start creating a deeper relationship with your significant other by signing up for Making Marriage Work today. It could be the key to your lasting happiness!]

By Dr. James M. Dahle, WCI Founder

A common issue for high earners and the middle class alike is how to get your partner on board with a personal finance goal. Maybe it's getting out of debt, thinking about FIRE, budgeting, or just being a little more frugal. While there isn't always both a “spender and a saver” in a relationship, there's no doubt that two partners are never going to be perfectly aligned on the spending/saving continuum. Even if they were perfectly aligned, they would have disagreements about what to spend on. Today, we're going to discuss seven ways to get your partner on board the financial train.

Katie and I have been married for more than 20 years, and we became financially independent multi-millionaires before age 40. I think we're now allowed to give advice on this topic. If you want to be financially successful, there's no doubt that your partner has to be on board. Here's how to do it.

#1 Work Together

I'm amazed at how many people try to do the “finance thing” on their own. They do all the budgeting, all the money transferring, all the investment selection, etc. They never actually talk to their partner about it. Sometimes they put their partner on an “allowance,” and the partner isn't even aware of how much income there is or how the money is invested. This is a recipe for disaster. While chances are that your partner is never going to be quite as interested in finance as the person reading this article, I don't think I can name any financially successful couples where it was really all done by one person. You must work together on this. This is far more important than your income, savings rate, or asset allocation.

That doesn't mean that each partner must do precisely half of the financial chores, but both partners need to agree on the major points of the financial plan and be willing to do their part to make sure the plan is followed. At a minimum, there should be general agreement on how the money is earned, saved, invested, spent, and given. The less interested spouse needs to hear periodic reports on where the money is and what is happening with it.

Like with anything, there will be compromise. A couple that can talk about and compromise on money can also overcome the other big disagreements/challenges of long-term relationships—sex, in-laws, religion, and child-raising. (By the way, when evaluating a potential partner for a long-term partnership, compatibility on most, if not all, of these issues makes a huge difference.) Often, people come to me with what they think are financial problems but are really relationship problems. Solve the relationship problem, and the financial disagreements will take care of themselves.

#2 Focus on the Why

Too often, when trying to get their partner on board, people focus on the mechanics—how to budget, how to invest, etc. In reality, the place to focus is on the goals. Until someone understands “the why” of personal finance, they will not have the motivation necessary to plan and to follow the plan. Once they buy into “the why,” decisions about the small things will always be evaluated against “the mission statement.” At that point, the discussion becomes, “Do you still care about [the why]? Well, what do you think we ought to do in order to still get there despite [the current issue]?” rather than “Why did you spend $180 on a single pair of shoes you'll wear once/a hockey stick you'll use once a year?”

If your partner won't even have this conversation, well, I'm sorry to say your partner is psychologically a child, not an adult. They need to understand that you don't intend to remain married to a child long-term. A partner who won't even talk about these issues with you should first get the option to discuss them with a marriage counselor before discussing them with their divorce attorney or their next partner!

Everybody's “why” is different, and sometimes partners don't even have the same “why.” But they love each other and so the other person's “why” becomes important to them.

For example, a big “why” in my life was the opportunity to quit being at work at 4am. I knew when I chose emergency medicine that evenings, nights, weekends, and holidays were part of the deal. But one of those things bothered me a lot more than the others. I never liked staying up all night, even in medical school and residency. I find that weird feeling around 4am (low cortisol?) particularly unpleasant. I was willing to work hard, spend little, and function as my own financial advisor to quit doing that earlier than most docs in my specialty. After 13 years, at age 41, I was in the financial position to pay someone else to work my night shifts. Katie also prefers I don't work nights because I'm more useful during the day and she doesn't have to keep the kids quiet while I'm sleeping. But because it was important to me, it was important to her. Her “why” is far more likely to revolve around traveling internationally with her children before they leave home.

Whatever your why is, focus there. If you really care about each other, you'll care about each other's “whys” and work together toward them.

More information here:

Financial Conversations to Set Your Marriage Up for Success

#3 Don't Go Hungry

Just like dieting, it's important in personal finance that you don't feel deprived. Mr. Money Mustache prefers to do his shopping with a bike trailer. That would make me feel poor and deprived, but I'm perfectly fine driving a $2,000 car around for years. Your partner might not be OK with that. You might have to find your significant other a $15,000 car for them not to feel deprived. Just like a dieter won't be successful if they feel hungry all the time, a budgeter won't be successful if they feel deprived all the time.

Get your partner on board with your financial plan and then you can get her (or him) on board heli-skiing!

Now, if your partner feels deprived without a $2 million house, a $100,000 car, and a $10,000 trip every month, that's just not realistic/compatible with a physician's income. This view of normal needs to be corrected or the partnership is not going to be successful. However, in most situations, there's enough wiggle room to reach financial goals without anyone feeling particularly put out.

#4 Have the Spender Track the Spending

I'm embarrassed to admit this one took us a couple of decades to learn. In our relationship, Katie does most of the spending. You know, the actual act of shopping and handing the money over to the seller. For the last few years, our “variable expenses” have invariably climbed, often fairly dramatically month to month and year to year. It wasn't that big of a deal since our income was growing even faster, but in 2019, we decided to have her track the spending instead of me. This was attractive to her because then she didn't have to listen to me asking her, “What was this $400 purchase?” It was attractive to me because the number of monthly purchases has been steadily climbing over the last few years and it was a lot of work to keep track of them. But a really nice side effect of this switch was that we simply spent less money overall. The simple act of measuring causes a behavioral change. In science, this is known as the Observer Effect or Pearson's Law:

“When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates.”

When you're doing the measuring and reporting, it accelerates even faster!

More information here:

Paying Off Spouse’s Student Loans Together

#5 Hire an Advisor

A lot of people have asked me over the years whether I'm going to become a financial advisor. I always tell them, “No way.” One reason is that I prefer helping a lot of people a little bit rather than helping a few people a great deal. But the main reason is that I don't want to do the work that financial advisors do. If you ask them what their actual work entails, it sounds more like marriage counseling. They spend most of their time getting partners to agree on and work together toward goals.

However, if you NEED that service, why not get a professional to assist? In my opinion, 80% of doctors need, want, and should use a good financial planner and/or investment manager who provides good advice at a fair price. Some people think my estimate is way too low, by the way. If you want to limit the cost, use an advisor in a more limited way—to help you draft an initial financial plan and give periodic check-ups. But you are far better off paying a good financial advisor than not doing financial planning at all.

getting partner on board financially

Incidentally, we continue to update our recommended advisor page to make it much more useful, clear, informative, and standardized. If you haven't checked it out lately, please do so—either for yourself or as a resource for friends and colleagues asking for a referral.

#6 Take the WCI Online Course

Another great method of bringing your spouse up to speed with financial literacy is to take the WCI Fire Your Financial Advisor online course together. Despite its provocative name, the first unit of the course will teach you how to select and work with an advisor who gives good advice at a fair price. Even if you want to use an advisor, the course will help you to do it better. But the point of the course is to help you write your own financial plan. Taking the course together with your partner helps your partner learn to speak the language of finance and it practically ensures you will work together on your financial goals. It's also dramatically cheaper than hiring an advisor and much less risky given the no-questions-asked, 100% money-back guarantee.

Check out Fire Your Financial Advisor today!

#7 A Physician Income Covers a Multitude of Sins

St. Peter said that “Love covers a multitude of sins.” When it comes to personal finance, a physician's income covers a multitude of mistakes. Look at all the mistakes your peers have made, and many of them have still become multi-millionaires. Buying whole life insurance, hiring a crummy advisor, paying too much for advice, not saving, not negotiating a contract to ensure you're paid fairly, buying a house when you shouldn't have, driving an expensive car, being too comfortable with debt, screwing up your student loan management. The list goes on and on.

More information here:

Actual Money Fights We’ve Had (and How We Solved Them)

The list even includes not working together with your partner, at least for a while. You can screw up a whole bunch of these things and still come out OK. So, quit beating yourself up and use the greatest of your wealth-building tools—your high income—to get on track. Don't focus on the past but on the future. On the pathway to financial success, speed and direction matter much more than where you currently stand.

If you want to be financially successful and you're not single, you need to get your partner on board. Follow these tips to do so.

What do you think? What did you do to get your partner interested in personal finance and investing? How do you work together toward your financial goals? Share your successes and failures below!

[This updated post was originally published in 2020.]

The post 7 Ways to Get Your Partner on Board Financially appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.

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By: The White Coat Investor
Title: 7 Ways to Get Your Partner on Board Financially
Sourced From: www.whitecoatinvestor.com/7-ways-to-get-your-partner-on-board-financially/
Published Date: Wed, 15 Mar 2023 06:30:00 +0000