Most Replayed Moment: How To Talk About Money With Your Partner! The Mistakes Most Couples Make!

0:00 Uh I had a conversation a couple of days ago actually with um James Sexton, who's the divorce expert. He's a divorce lawyer by trade, but he knows more about divorce than anybody else. And he said to me there's two things which cause people to end up in his Office. going through a divorce, number one is cheating, infin infidelity. And the second thing is money problems in the relationship. So I find it especially sort of pertinent to have this conversation with you about

0:29 Um, because clearly one of the things that is most likely to end my relationship or or I guess prevent me getting into one is this financial avoidance that most of us engage in. You've interviewed hundreds and hundreds of couples about money on your podcast. What have you learnt about our relationship with money in relationships from that? I've learned that fifty percent of the people I talk to do not know their househome.

0:54 Ninety percent of the people I talk to who are in debt. Do not know. How much debt they're in. And one hundred percent of the people I talk to in credit card debt. also have trouble saying no to their children.

1:09 Isn't that shocking? Each of those things, fifty percent do not know how much income they make. Because most of us are simply living. by looking at our checking account, and that's it.

1:20 The debt part. Kinda makes sense. Why would you want to know how much debt you owe? You don't really want to think about it, so you ignore those emails and envelopes. And the Credit card debt part.

1:31 That is really interesting. The idea that If you can't say no. Suspending. So you've racked up a bunch of credit card debt. The same principle applies to saying no to kids.

1:43 For me, when I discover these, I find them absolutely fascinating. But the good news is you can also change these things. And what's the difference between men and women? In terms of spending habits in a relationship, secrecy, avoidance, arguments. Well

1:58 Let's start with the roles. Men always describe themselves as providers. Always. That's what we are taught. It s exists in culture. The problem is, of course, what happens when they are not.

2:12 the top earner. Which is happen happening increasingly more now. So when I often ask them Who are you? financially speaking, if you're not a provider. And they're just stumped.

2:23 But there's gotta be something more than simply being a provider. You can be in provider. And you can be a nurturer, you can be a provider, you can be a helper, a leader. There's so many different ways. Um Often what you'll see with women is

2:37 discussions about a secret bank account. Keep a little money aside. Just in case. We have to remember that in the US. Many grandmothers were not allowed to open up.

2:49 Their own Bank accounts. That happened in Two generations ago. And so there has been

2:56 Uh rightful message that has been passed down orally. Keep a little bit of money aside just in case. Whether it be physical abuse, financial abuse, divorce, etcetera.

3:07 And I totally respect. That message I Don't think You should have a secret account.

3:13 I do think you should have an account that is yours only. But no secrets in a relationship. What about arguments as it relates to money in relationships? the cause of the arguments. Is it someone spending too much? Is it hiding money? Is it something else?

3:29 Very small extreme. Biggest. phrase that I get from couples is He or she's a spender.

3:39 And I'm a saver. So it's creating this identity that they're a spender, I'm a saver, or They don't want to talk about money ever. Why can't I get them to finally sit down with me and get on the same page? That's a phrase that's tossed around everywhere. When I ask them what is getting on the same page.

3:58 The answer is I don't know. I just want to talk about it. So when it comes to money. Yes, there are the numbers that we need to understand, of course. But what I often tell people the way you feel about money. Is highly uncorrelated. to the amount in your bank account.

4:13 That is why I speak to so many multi millionaires. Who still worry about money. They think if I just have fifty thousand more, five hundred thousand more, five million dollars more. Well guess what? I've had all those folks on my podcast. And they still worry about money.

4:27 That means there's two things you need to do to master your relationship with money. One, you got to know your numbers. This is a language you have to learn the basics of personal finance. Two You have to master your money psychology. That means you need to change the way that you talk about money.

4:44 and behave with money. So that you can ultimately change the way you feel about money. You do those two things. You're gonna have a very healthy relationship. With money.

4:53 We'll go into all of those things and how you do them. Um on this point of gender roles. Obviously society has changed in the last couple of decades in terms of equality and more women are in work at higher level. positions in corporations in the C suite, earning much more money. This is caused. A shift.

5:12 I should say. In the sort of typical gender roles and assumptions of w what what each gender is supposed to be doing in couples. And I'm wondering now, with more women earning more money In many cases they're gonna be earning more than their Husband. in heterosexual relationships. Have you seen new dynamics and new issues created because of this, in terms of like I don't know, insecure men feeling emasculated or the woman not being happy that she's contributing more? And I asked this because I had someone on my podcast a couple of uh months back who

5:44 Said to me that I think it's seventy or eighty percent of women expect That their romantic partner. Will earn more than them. But that gap is closing now because women are earning more and more money. I'm just wondering if you've seen in those couples scenarios where the woman earns more and it's causing problems. I've seen it all the time.

6:01 I've sinned all the time. I think that we see different gender dynamics. Um, I recall one episode where I spoke to uh a young woman and her boyfriend. She was around forty years old. She made way more than her boyfriend. Care to guess how much she makes.

6:18 Per month. Twenty thousand dollars. two hundred thousand dollars per month. She has a business. It's doing very well.

6:27 She's around the age of forty. Now her boyfriend was never taught about money when he was growing up. Most people are not. He never learned about investing. Certainly no one was telling him about a Roth IRA when he was twelve years old.

6:41 And he had started his own business and he was on the upswing. He's making a few thousand dollars a month. Good for him. She's making two hundred grand a month. Her parents started talking to her about investing when she was five years old.

6:53 So here we already see a difference, not just in gender, but in socioeconomic status. Okay. And Over time that progressed. So they come to me and she says I want him to pay for dinner occasionally.

7:08 Fine. Super reasonable. He even said No problem. I want to. So he would take his credit card out. And he would offer to pay and she would say no.

7:18 I want you to contribute more to your IRA. So in many ways she wanted him to pay. She wanted to feel taken care of, which is totally reasonable. But when he Offered.

7:29 She said no. So this is the kind of thing that I often see, which is I think I want one thing, but when I get that thing, I don't actually want it. It doesn't make me feel the way I thought it would. I want to earn fifty K more. I think that'll make me feel safe.

7:45 Oh my God, I am earning fifty K more. It doesn't actually change the way I feel. So I worked with this couple. And I helped them.

7:53 Understand why they both felt this way about money. And You know, from the outside it's like this is so irrational. You if you make more, just pay more. If I were in that situation, et cetera, et cetera. None of that stuff matters. When you are in the couple in that relationship.

8:09 You will feel a certain way and we gotta work with you individually, not what everybody else says. In the end. the conclusion that they came to was She wanted him to occasionally pay for dinner, but she also wanted him to

8:22 Fill up his IRA. So this is what they did. Every so often before they went out to dinner, she would give him her credit card. And she would say here, I want you to pay for it tonight. And he said Cool. He understood it.

8:34 They went out and that's what they did. Now to us sitting here, we're like This dance makes no sense. Why don't they just do it this way or that way? Guess what? Every single one of us. has some irrational thing we do with money.

8:48 Every single one of us. And I think that we are ready to actually have conversations about how we are irrational. Money is not just dollars and cents on a page. That's why you don't feel good about money, even when you have more than you ever thought you would. That's why you worry about money, but you have never read a single book on personal finance. We are all irrational, including me. And when you get into a relationship. You gotta acknowledge that.

9:13 And then you gotta say, Hey, what is our vision of a rich life together? Let's build that. If it means we do a little dance about the credit card once every two months Fine. Do we both feel good? Is it fair?

9:24 Then I'm good with it. What's going on there with her? Because it it sounds like there's this battle between her mind and maybe her heart or it's almost like the social expectation is coming in, but then her brain is saying no, invest in the IRA. And an IRA for anyone that doesn't know in in the other part. It's a retirement account. A retirement account. So she's saying invest in the future, but also buy my dinner. Well, it's the same it's the same. We all have these things that society has told us.

9:49 But then We don't quite agree and we're not sure what to do. Last time I was here we talked about how You don't necessarily need to buy a house in order to live a rich life. And in my case, I have rented for the last twenty years by choice.

10:03 And I made more money renting. and investing the difference than I would have by buying a house. And this is shocking to people. Like we saw the comments last time. People went Berserk.

10:14 How can you talk about renting? You're just throwing money away on rent. And this is something we have been Fed. Constantly. For generations that in order to be successful.

10:24 You must Buy a house. So when somebody like me comes around and says actually you should run the numbers because sometimes renting can be better. People are shocked. Same thing with

10:35 Um if you want to be taken care of. Or you want someone to treat you, or you want someone to pay for the first date. Same thing when men come and they talk about being a provider. But in certain relationships where they actually earn less I'll say to them.

10:50 If we look at the numbers, you're not the provider. So who are you? And they're stomped. And that is when we need to start grappling with the idea that maybe what we were told Is not exactly true for us in our situation today, and that's okay.

11:06 Do you think it causes more problems when the in terms of the relationship dynamics and that sort of a masculation and you know that the man not feeling like a provider when the woman earns more money than the man. framework than we're used to. Yeah. When we think about my parents, for example, my mom stayed home with us, my dad went to work.

11:27 single earner. Simple. Everybody knew. Where they stood, what the rules were, it was very simple. It's very difficult to do that today.

11:36 Housing is historically expensive. Health care is expensive, especially in the US. And so You have two people earning. In

11:45 In urban cities you have young women earning more than men in their twenties. Lot of us are trying to figure out What does this role mean for me? and for my partner and for our relationship. I wonder if a lot of men are just choosing to remain.

12:00 Single until they kinda worked on themselves because I think actually that's probably the path I would have taken if I'm being completely honest. Well I kinda did take is I didn't have a relationship until I was able to Really provide.

12:13 Oh the P word. Yeah, and where did that word come from? Provide. Like watching my father, watching movies, everything. Exactly. Yeah, no one ever says like you are a provider. But we learn it from a million different uh perspectives. And yeah, I hear a lot of guys. I mean, when I uh was living in New York and I had a lot of single friends,

12:34 Topic of conversation was I'm not ready to get married. I need to get to a certain point in my career first. But you have all these words for it. And Deep down. there's a feeling that we're often expressing, you know, maybe I'm not ready, maybe I'm not enough, maybe I need to do X, Y, Z before I do the thing that I want.

12:55 And so Part of what we talk about when it comes to relationships and money is like let's actually Shine a light on that. Let's not be shy about it. If you want someone to pay for your dinner Fine.

13:05 That's totally fine. Let's have that conversation. If you want to be the sole earner in your household. Okay, let's see what it would take. And Too often we Don't have those conversations, we just dance around them for fifty years.

13:20 My answer is Doesn't matter. It would be nice if the person who suggested the date pays, but I think we spend way too much time focusing on the first date. And way too little time thinking about the next fourteen thousand six hundred and twenty five days.

13:36 It's like a Couple who's obsessed with the wedding. Fine, you want a nice wedding, great. What about the marriage? Same thing with money. First date, okay, we can have that conversation.

13:47 But aren't you more interested in How Your partner. Thinks about money? And talks about money, are they a cheapskate?

13:54 Are they generous? Are they abundant? Did they grow up the same or different than you? That is something we don't talk about. Meanwhile we have five million YouTube videos on who's gonna pay on the first date. We are missing the real point. The point of money in a relationship is not just about the first date.

14:10 That's fun for cliques. But it's about Do we see money the same way? Do we connect? Are we gonna be rowing in the same direction, or are you gonna be doing that? And I'm doing this and we can never get a line.

14:23 You can only make a first impression once, right? And if you are a guy. This is just how I feel anyway, if I go on a date A first date with a Women's

14:32 And we have a wonderful day. We you know, it's a nice restaurant. And then it gets to the end of the day. And then I turn to her and say, Shall we split the bill? I can even say it with a straight face, frankly. I couldn't I definitely couldn't ask her to pay. Yeah. I just I just could never. And If I think if you anonymously polled ten of my female friends and said, How would you feel if on the first date the guy asked you to pay?

14:55 Mm-hmm. I think privately they would say That's a bit of a turn off, that's a red flag, that's an ick. I think probably that's true. And again goes to the power of Socialization.

15:05 Right. Culture is very difficult to change. We gotta admit that. We gotta acknowledge that. And when I was dating I paid for dates. So I don't have a problem with it. I like to be generous. I think that when you are in a relationship

15:21 You like to know that your partner is generous too. Now generous comes in lots of ways. It could be paying for dates, it could be Planning a trip. It could be being thought and, you know, buying extra toothpaste because we're running low. There's so many different ways to be generous. But

15:35 Generosity for me would be a value. Paying for a date. Sure. I paid for dates. I'm happy to, I like to do it. But Generosity to me is way more important to talk about that in a relationship versus the date itself. Because chivalry.

15:50 You know, this this idea that the man is to lead um in that regard and uh Yeah. Open the door and open the car door and pull out the chair. Yeah, but think about it. I agree with all that stuff. I um

16:02 I support it. But think about what message that sends when you tell men you're supposed to be chivalrous. But there's no real context, no no real teaching around it. And let's say you have a twenty-six year old guy now. Who's earning less than his girlfriend.

16:16 So he wants to be chivalrous. But For him, he's like Well, look at our bank accounts. And so what I wanna emphasize to people is you can be chivalrous, you can be generous Money is just a small part of that.

16:29 Yeah. Let's not over fixate on who's paying for topas. Okay. And let's actually think about the important things. When it comes to money, we are so obsessed with three dollar questions. People are obsessing over should I buy this coffee? Can I afford this appetizer? On and on and on about three dollar questions. We totally neglect. The thirty thousand dollar questions or the three hundred thousand dollar questions.

16:53 Is this person financially aligned with me? How do I even find out? Am I Investing. Five to ten percent of take home pay every month. Are we doing it together?

17:04 Um Do we talk about money regularly and proactively and positively? Those things matter, and they're actually worth hundreds of thousands of dollars. These three dollar questions, including who's paying for appetizers or should I buy a latte? Irrelevant. Fact, get get the big

17:20 Answers in life right and you can buy all the appetizers you ever want. What are the financial red flags in a relationship then? Number one is they don't want to talk about money. If you don't want to talk about money Red flag.

17:33 The biggest red flag of all. Because We could differ on how we see money. We can even have different values for a few things. But if your partner simply will not talk about money. You have a huge problem.

17:46 Why. If you can't talk about money, then you can't even understand where they're coming from, and they are not curious about what you want. So how are you ever going to get on the same page? Think about this. We need to have the conversation about money. The con as if it's one conversation. Would you have the conversation about raising kids?

18:08 No. You'll have thousands in your life. That's the way it should be. Money is very much like parenting. Not like

18:17 Uh, should we play pickleball or tennis today? Irrelevant. So we wanna have Lots of conversations about money. And that means we need to First of all, be willing to talk about it, and then we need to find a way to have fun doing it.

18:30 Why don't we? And who doesn't? Is it men? Is it women that don't do it more Moral. Who's not talking about money and why aren't they talking about it? It's not about gender. Couple it has nothing to do with gender in terms of who does or doesn't talk about money. There are Avoiders. That's one of four categories.

18:45 uh money types that I've identified. Avoiders. Hate talking about money. And they will use a series of conscious and unconscious techniques. to avoid talking about money.

18:56 They'll say things like um Uh why why do you always have to talk about money? Can't we just have a nice night out? Or You're so much better at this.

19:06 You just handle it, you're just so much savvier at this stuff. That's an avoider. Do they know their own financial situation? No. So they don't know their own financial situation and they don't want to talk about it. Correct.

19:17 We and by the way, we all have something like this. It could be our fitness, it could be our relationship with our parents. There's something in our life that we know we should deep down. But we avoid it. Yeah. And there's no There's no immediate consequence. Like if I don't Call my college friend.

19:35 It's fine, I could probably call'em tomorrow and you can go on and on and on like that. Until one day you can't. Same thing with our fitness. it's very easy to procrastinate on fitness or money because it's not like you're houses being taken away, or even your cables being shut off.

19:49 They'll probably be fine. Until one day. You hit this brick wall and it's not. Mm-hmm. So that's the avoider. That's the first money type. Yeah.

19:59 Next up. Optimizer. I have a soft spot because I am an optimizer. Optimizers We love to live in the spreadsheet. It's like, let me sit and calculate this, and what if I run a compound introduce calculation or a Monte Carlo calculation, and what if we do this, but not that?

20:16 I love Calculating everything. And left alone, I would sit there and do that for the rest of my life. Okay. The problem is you can take it a little too far. No.

20:25 I don't think I've taken it too far. Perfect. Perfect on my spreadsheets. But my wife has taught me Enough's enough. We we've won that part.

20:36 Of life, let's focus on another part. Connection and fun and experience. And these people often thought of as boring. Yes. They are they are deep down they are boring. I was boring when I was sitting there thinking money is only about numbers. It's not. Money is about adventure and possibility and generosity. And you will often find optimizers. I'll give them a challenge. I'll give'em a hundred dollar challenge. Also you have to take a hundred dollars in the next week and spend it on yourself. They cannot do it.

21:03 They will spend it on their dog, they'll spend it on their kid, they'll spend it on their partner, but they will not do it for themselves. And I go, Why didn't you do it? Do you know that if you put$100 in an S P five hundred and you compound that for the next 45 years, it'll turn into this much? I don't give a shit. Spend the money. Because money is not simply meant to be hoarded. Right. It's meant

21:25 to create a rich life. And When you have optimizers The thing is they can get you to a very good place. They will probably have your account set up, dialed in. They'll be investing Great. They're gonna be very proud. Look at the compound interest returns.

21:41 All that is fantastic. but it can be taken too far. These are the people that die. And then you figure out that they had like nine million dollars some saving account. What a waste. They never tasted the caviar, but they've got Yeah, like people send these newspaper articles around like

21:55 Oh, local librarian discovered to have nine million dollars and I go, What a tragedy. What a tragedy to live a smaller life than you have to. I I want you to save, I want you to invest. But I also want you to Try a nice meal.

22:09 Or if you don't like nice food or you don't want a nice T shirt. Also fine. Get super generous. Give that money. S surprise the people around you. Tip fifty percent. So those are optimizers.

22:21 The third category is warriors. They love to worry. Typically they picked up worrying from their parents. Almost always, and their entire relationship with money is worrying. Are we gonna have enough?

22:35 What if we run out of money? What if we don't have enough to pay at the gas station? And Oftentimes it's very surprising'cause I told you that Fifty of couples don't know how much they make. Right. So they'll say like we need

22:48 More. We don't have enough right now. And I'll ask them, How much do you think you make? This just happened a couple of weeks ago on a podcast episode. They thought they made around seventy thousand dollars a year. Okay. We we add up all their stuff. They make a hundred and twenty thousand dollars a year. So I go, Well here you go. You you wanted to make

23:07 an extra 40k, you actually make 50k more than you thought. Do you feel any better? And she goes. No. Because the way you feel about money.

23:17 is highly uncorrelated. To the amount. in your bank account. So warriors worry. That's how they relate. They can't imagine

23:26 Any other relationship to money. And My job is to help them realize. First of all, let's actually look at your numbers. Let let me help you understand what it means. Do you have enough? What does it take to have enough? And then

23:39 can you start to develop a new relationship with money? It's almost like a new Taste bud. I'm never gonna tell you to Eat tomatoes if you hate tomatoes. But I am gonna teach you

23:49 Maybe you like okra. And we can develop a new taste for that. Finally. The dreamer. The dreamer

23:57 believes that success is one deal away. If we just close this deal, if I just get this thing And they tend to fall into get rich quick schemes. Lots of scams, MLMs, a lot of crypto shitcoin scams, like all this BS. But they are extremely resistant to

24:18 Calm. low cost long term investing. In other words, the way that most people build real wealth. They think it's boring. They even have little phrases like, Ugh, I don't want to be stuck in a nine to five like those suckers. I'm like, that sucker makes ten times what you make. What are you talking about? But they Have simply been surrounded with the idea one more deal.

24:38 And I'll finally make it. They must be hard to be married to. It's impossible. It's really, really difficult. Th they don't not only do they not want to talk about money, when they finally do talk about money, they're almost living in a different world. And often you will find that dreamers Can only dream because they are being subsidized. by someone in their life, usually their partner. And if their partner were to leave, for example,

25:01 The house of cards would collapse. And Actually that's usually the only thing that gets them to truly change. What you just listened to was a most replayed moment from a previous episode. If you want to listen to that full episode, I've linked it down below. Check the description. Thank you.

25:18 Uh Oh

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