Money and Relationships: How Financial Literacy Can Help
They really had to put everything on the table, share their feelings and reveal any uncertainties about the financial particulars involved. For instance, would they consider all assets acquired before the marriage separate and those acquired after marriage joint? Would they sell their current homes and move into a new one? The kids and estate planning were a particular concern. Cynthia said it was hard at that time in life to let go of some patterns and attitudes, but having a mutual understanding of how they wanted to handle their finances was absolutely essential. And they agreed to not only listen to each other but also learn from each other's experiences. That takes a tremendous amount of openness -- and togetherness.
Longtime Partners Need to Break Old Patterns
According to an article on Phys.org, the financial literacy gap often widens in long-term relationships. That's what happened to Laura and Alex. Alex, an accountant, just naturally handled all their finances. They'd been together since they were quite young, and Laura at first didn't seem to care. In fact, she wasn't really interested. But as the years went on, Laura began to feel too dependent on Alex as well as resentful. There were really two problems: Alex had to relax some of his control, and Laura needed to be willing to learn. It was difficult at first, but once Alex agreed to include Laura in more financial decisions and Laura began to understand more about their income, savings and investments, the air was cleared, and each felt more confident in the other.
A Financial Plan Helps at Every Stage of a Relationship
Every couple has unique financial challenges, but one common way for all couples to get on the same page, learn together and solve their financial problems together is to have a financial plan.
When it comes to financial literacy, a financial plan can be an outline for understanding some basic concepts. That's because it deals with your complete financial picture: goal planning, cash flow, budgeting, debt management, saving, investing, insurance, taxes and estate planning. Ideally, you will work with a financial planner, although an informal plan that you and your partner create yourselves can also increase your financial knowledge and give you financial direction. And it's something couples can revisit over time to make sure they're still in agreement.
Make a Year-End Date to Renew Your Financial Commitment
The end of the year is a traditional time to look back at what we've accomplished and look forward to achieving new goals in the future. Why not make understanding more about your finances a mutual goal for you and your partner? You can think of it as increasing your financial literacy or as a way to fulfill your dreams. Either way, you'll be doing it together -- and that's the most important thing.
Carrie Schwab-Pomerantz, Certified Financial Planner, is president of the Charles Schwab Foundation and author of "The Charles Schwab Guide to Finances After Fifty." Read more at http://schwab.com/book. You can email Carrie at email@example.com. The information provided here is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.Copyright 2021 Creators Syndicate, Inc.