“People who are in relationships are more than twice as likely to claim that they are a saver but their partner is a spender, according to a new survey by SunTrust Banks, Inc. (NYSE: STI). Twenty-eight percent of 1,339 people surveyed said that they are a saver and their partner is a spender, but only 13 percent admitted that they are a spender and their partner is a saver.”
“The SunTrust study suggests that differing views about spending lead to relationship stress. According to the findings, finances are tied with annoying habits (both at 24 percent) as the top stressors among couples who experience relationship stress.” (SunTrust Study)
The finger pointing found in the SunTrust study is common. We have likely all experienced a form of this at some point in our relationships.
Recently, a friend asked if I had advice on how to work with a significant other regarding finances. This is tricky. I know a financial review is not every couple’s dream date night, but after seeing many relationships destroyed over financial issues, I know how important it is to be in sync.
To ensure success in your mission, utilize these three fundamental principles taken from the book, “Extreme Ownership” written by Navy SEALs, Jocko Willink and Leif Babin.
- Extreme Ownership, “The fundamental core of what constitutes an effective leader in the SEAL Teams or in any leadership endeavor.
On any team, in any organization, all responsibility for success and failure rests with the leader. The leader must own everything in his or her world. There is no one else to blame. The leader must acknowledge mistakes and admit failures, take ownership of them, and develop a plan to win.” (pg 29)
Do not become the person in the SunTrust study pointing blame at your partner for financial trouble. Take Extreme Ownership of securing your household’s financial success. Part of your role as leader is ensuring your teammate understands their role in the mission. Statements like “this stuff just doesn’t interest me”, “I just don’t understand it” or “he/she takes care of everything” lead down a dangerous path. Many of the divorces I’ve witnessed regularly started with financial ignorance. While it is appropriate to delegate duties based on strengths, as a leader, it is your responsibility to ensure your partner understands how their actions impact the outcome. I think you will be surprised to find the support that comes from a partner that truly understands how they share in the development of the household. The best situation is when two leaders emerge, both taking Extreme Ownership of the household’s success.
- Alignment of Values and Goals, “In any organization, goals must always be in alignment. If goals aren’t aligned at some level, this issue must be addressed and rectified. In business just as in the military, no senior executive team would knowingly choose a course of action or issue an order that would purposely result in failure. But a subordinate may not understand a certain strategy and thus not believe in it.” (pg 78)
I always prefer to have both members of a relationship involved in the financial planning process to ensure values and goals are aligned. Some people push back on getting their partner involved, which is usually just code for “I don’t want my partner to know what I am spending money on”. Think of what is being given up? Two members working in sync toward the same clear objectives, versus two independent agents keeping the other in the dark – who do you think has a better chance of success?
If you both agree that funding your child’s education is the primary goal of the household, avoiding going out and buying that car you can’t afford becomes that much easier. Your desire to cook at home to save for the wedding ring can easily be mistaken for, you never want to go out anymore, you’re boring! Isn’t it often the culmination of little things that drives us crazy? Clear communication early on can save you from a downfall in the future.
Even if you don’t want to receive, or give, full transparency into your partner’s spending, there are actions you can take that are better than working in silos. For your major goals, you can work together using joint accounts. Then, create a guilt-free spending account that is just for you. You want some new Allbirds or a mani/pedi – take it from your account without batting an eye. My wife and I use this process with great success. Rarely do we ever bother each other about the other’s spending because we know we have joint accounts and processes in place to achieve our major goals.
- Simplify, “Combat, like anything in life, has inherent layers of complexities. Simplifying as much as possible is crucial to success. When plans and orders are too complicated, people may not understand them. And when things go wrong, and they inevitably do go wrong, complexity compounds issues that can spiral out of control into total disaster.” (pg 140)
After I earned the CERTIFIED FINANCIAL PLANNER™ designation, I was excited to put what I had learned to action with my clients. After reviewing their situation and hearing their goals, I would eagerly lay out the ten different ways in which I could help them and the different steps we could take to get there. I would then be rewarded with…. blank stares and unreturned calls. I learned I was making an already daunting experience sound like an exhausting process by overcomplicating everything. My attempt to showcase my expertise was a complete turnoff.
The ability to simplify complex subjects is perhaps the truest form of expertise. Simplicity is also the best way to ensure you and your significant other remain on the same team and on track to meet your shared goals. What are you asking of your partner? Is it clear and concise?
If I were to lay out just three priorities they would be:
- Automate your finances
- Avoid a credit card balance like the plague
- Invest early and often (in yourself and with your money)
We can then spend time building off of these fundamentals.
Lastly, be patient. Life sets you up for a wild ride and there are always opportunities to learn and adjust.
“Almost no mission ever goes according to plan. There are simply too many variables to deal with.” (pg 145)
I highly recommend reading Extreme Ownership. Easily one of the best books I have read.