Am I with the right financial partner?

Some say one of the biggest financial decisions we ever make is who we choose as a life partner.

I used to not believe that.

I used to think that my choice of university degree, professional career and country to live in where my biggest financial decisions.

And by many accounts they of course are.

But ever since Carlos and I decided to tie the knot and get married, I’ve been rethinking my beliefs.

And in this article I’d like to share with you:

1.       Why our choice of who we share our life with is more financially impactful than we might realize, and

2.      How do we know if we are choosing the right financial partner.

Rather than quoting stats and generic observations from the internet, I’d like to share practical insight I gathered from coaching sessions with real people, and from my own experience in my relationship with Carlos.

My partner can make or break my financial future

The other day I was coaching someone who recently separated from their partner.

Looking at their net worth and monthly cash flow, we were doing a “before and after” comparison: how did the separation affect their finances?

The comparison first surfaced the obvious: net worth slightly shifted, because ownership of the previously jointly-owned apartment now moved fully to the other partner. Assets decreased, but then so did the mortgage. Expenses went up because now rent is higher than the previously shared mortgage payments.

On paper, the immediate math looked tough. But when we dug deeper, we saw something less obvious.

Every month there was an automatic transfer to a private investment account.

I asked since when is this automatic transfer running, and how did it come to be in the first place? The answer: “I saw my ex investing automatically every month, it seemed like a good idea, and so I decided to do it too”.

This decision to ‘imitate’ a partner was taken a few years back, and now my client has a growing private investment pot for their financial independence.

These are the kind of subtle ways our life partner can gradually make or break our financial future: through habits we adopt from them, through new beliefs about money.

They can be for the better or for the worse of course. And it’s important to be aware and discerning of which kind is happening to us.

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Am I with the right financial partner?

Think about the kind of person you wish to spend the rest of your life with.

What kind of qualities would you be looking for? It’s probably stuff like: is respectful, loving and caring, driven/ambitious etc.

What about qualities around money?

If you’re unsure or completely blanking out, here’s five I’d recommend considering: 

1.      I can talk to my partner about money, without stress, guilt or shame,

2.      I can observe my partner being intentional and conscious with their money,

3.      My partner has clear financial goals, and is actively putting in effort to achieve them,

4.     I also see examples of my partner being generous with their money, spending it on others without expectations, and

5.      I trust my partner with my own finances, trust that they would manage my assets and liabilities as if it were their own.

Notice how communication is top of the list. That is not by accident.

I have seen it time and time again in sessions with couples that financial progress is slower and more clunky without a stable and constructive way of communicating around money.

This is why we start the coaching process here, aligning money values and creating a habit of regular and even pleasant (yes, it's possible!) conversations around money.

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Am I a good financial partner?

Here’s where the tables turn.

How do you fulfil the requirements you have for your life partner around money?

Are you the kind of person who has a positive influence on others’ financial lives?

And I don’t mean the directly visible one necessarily, such as supporting someone financially.

I am referring to you setting an example: are you the kind of person who shows that they know what’s going on with personal finances, talks about their financial goals and how they’re working towards them, who is generous with money and has aligned it with their values?

And most importantly: do you have a positive relationship with money? Do you enjoy it, get excited by the possibilities it can offer, actively study it and grow it?

Or do you get stressed about money, avoid it, or are passively engaging with it?

Before we can ask of our partner, we have to ask of ourselves. Hold ourselves to a higher standard, get ahead with our own financial lives and grow our own money mindset.

Once we become the person who deserves it, the rest comes naturally as a result.