Life Transitions Equal Money Conversations
By Alana Heim, CPA/PFS, CFP®, CHDS
March 1, 2017
When life transitions show up, you may or may not notice that a money transition also comes into play. It is important to recognize that there will be a money transaction occurring during the biggest shifts in your life.
So what kinds of changes will you face in your lifetime? The following life transitions also correlate to major financial changes:
- Birth/Starting a family.
- Changing jobs/career transitions.
- Financial windfall or inheritance.
- Substantial change in income.
- Children off to college.
- "Boomerang" children return home.
- Caring for aging parents.
- Illness/Health issues.
- Estate planning.
Think about it. Going to college is a big change. Tuition is directly attached. Most people choose to plan ahead for this life phase. Money conversations are had well in advance so parents and children know which funds will pay tuition. Saving for college with 529 plans and prepaid tuition plans are very common. Applying for scholarships and taking out loans are additional options. People are not surprised by the costs associated with going to college.
Yet, when you decide to marry, you are typically very surprised at how often money is an issue in the relationship. During the "in love" phase, you are so wrapped up in your partner because of the high levels of dopamine in your brain, that you forget to consider money as a topic to discuss. You move in together, you split bills, you make assumptions of how things will be, and then a wedding comes into view.
The wedding is a hot topic of discussion because suddenly a lifetime of dreams are possible. The costs add up. A budget is discussed. Family members contribute to the dream wedding.
And then just like that, life continues on... as a couple.
Individuals are united as one, yet your finances remain separate and become the elephant in the room. You and your partner are unsure of how to speak about money. You only know what you encountered as a child raised by parents who had their own beliefs about money. Your only basis for how a couple should handle money stems from what your parents did.
Finances are a leading cause of stress in a marriage. It is known that many couples have money conflicts in their relationships. When two individuals with different money upbringings embark on a path of coupledom without discussing how to merge their moneys into the relationship, trouble easily ensues. Disagreements begin. Frustration grows. Financial infidelity appears. The relationship suffers as do the couple. It is easy to see why money can be the catalyst to a marriage ending.
With any life transition that you may face, it is imperative to have a money conversation with everyone who could be affected. For the parents and the college kids, a discussion must happen not only about how school will be paid for, but what the boundaries and expectations of parents and the child are for paying for housing, food, and other living expenses.
For the couple in a committed relationship, it is healthy and wise to discuss their beliefs around money prior to marriage. Having an open, honest discussion can bring the two of you closer together. You can begin to understand why each other behaves the way that you do, why you become emotional around money conversations, and how to acknowledge where the other may need insight. The discussion allows for the partners to see each other for your differences, and determine which methods will work best for the couple. You can set boundaries on spending, saving and giving. You can have financial meetings to discuss upcoming challenges, expenses and vacation requests. You can create financial dreams to fulfill your lifetime of love, happiness, security and freedom. You can commit to being a kick-ass financial team.
Money conversations can be difficult because they deal with emotions and issues from your past. Sometimes you may want to keep those difficulties in the past. However, when you can shed those memories, you can now move forward a little lighter, with more enthusiasm and more commitment to achieving your goals and dreams.
Life transitions will always be in your life. You get to choose how to plan for each of them. The more thought and effort in planning you put in, the less struggle you will encounter during the transition. When you can plan accordingly, you can avoid the common financial pitfalls that most people experience.
If you see any of these life transitions looming in your horizon, I invite you to please contact me. I would love to speak with you about the transitions you are facing and what next steps you can take.
I work with individuals and couples who need assistance with having their money conversations prior, during or after a transition has occurred in their lives. I facilitate these conversations and guide my clients to find clarity with their relationship with money. I provide financial therapy in these areas because I know how important it is for you to heal from them. I am passionate about working with you in this capacity because I know how deeply important this service is to your financial health and wellness.
I want you to have financial stability. I want you to heal from your past money issues. I want you to have money conversations that thrust you toward achieving your greatest dreams.
info@ProsperityAlignment.com ♥ 775.525.1355 ♥ www.ProsperityAlignment.com