Q&A with Manisha Thakor, Co-Author of Get Financially Naked, Part 3
Welcome to Part 3 of the Q&A with Manisha Thakor, co-author with Sharon Kedar of the new book GET FINANCIALLY NAKED: how to talk money with your honey.
**Due to the length and detail of these answers, I’ll be breaking the Q&A into 5 parts, with 1 winner revealed at the end of each Q&A. Look for the subsequent parts to come in a few days. See here for Q&A Part 1 and Part 2.
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MommyMel – What is the best way to protect your finances before and after marriage if your significant other will bring debt or a bad credit history to the table?
Manisha – Before marriage – talk about it openly and honestly. Share a list of what you each own, owe, and your credit scores. Talk about what behaviors led to the numbers being what they are and how you might want to change going forward. My personal advice – do not combine finances or loan each other money. Discuss when you get married whether who is responsible for paying down that debt. There are no right or wrong answers. Some couples will decide that once married all previous debt accrued is a joint problem and you’ll work on paying it off together. Other couples (this would be my preference) would say what happened pre-marriage stays pre-marriage and each person takes responsibility for cleaning up their financial situation that occurred pre-marriage and everything post-marriage becomes a joint problems.
After marriage – If you’ve gotten financially naked before marriage, this part should be the easy bit. You know what the problems are, you know who is responsible for what. Now your goal is to make sure you both keep each other fully informed about the progress you are making on the game plan you’ve set. Additionally, because life happens, if there are any slip up, that you both commit to telling each other asap.
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Psychsarah – How often do Manisha and Sharon suggest you re-jig things in your financial life with your partner? I find that we’ve had tons of conversations over the years, gotten things pretty much figured out, but then we fall back into habits and arguments every now and again. Is there a timeline for a financial relationship “re-assessment”?
Manisha – In GET FINANCIALLY NAKED, Sharon & I suggest you have a “re-evaluation” conversation once a year. Personally, I recommend January as then you can do a full recap of the prior years income and spending along with a review of whether you met your savings goals and how your investments have done. If you have a volatile or uncertain income stream (you work for yourself or on commission) I personally recommend doing this exercise twice a year, in January and June.
The similarities between getting financially fit and getting physically fit are striking – keeping it simple and actually doing it are the two turbo charging agreements. So don’t beat yourself up for falling back in to old habits & arguments. That’s just human nature. The antidote is to set up a structure (family financial summits) once or twice a year to nudge you back on track.
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Paranoidasteroid – How can you create an environment where you can track your spending as a couple, but without making the other person feel like they have no privacy. This is especially important now that husband isn’t working. I don’t want to track everything he does, but I still want to track our money together.
Manisha – This is an increasingly familiar scenario – and let me start off by saying how great it is that you want to track your spending during this difficult time when one of you isn’t working. Human nature urges us to put our heads in the sand and your desire to track your spending is so much healthier.
My suggestion would be to do broad dollar categories. So at the end of each month, tally up how much money was spend via: (1) credit cards, (2) debit cards, (3) checks/ / auto bill pay, and (4) cash. The you will have a sum total of your spending which you can compare to your household income. If you are in the red, THEN you can go back in and investigate where you need to trim things back.
By tracking, for now, the aggregate flow of cash rather than the specific categories (food, transportation, housing, entertainment, etc) you can make sure you are not going in the red without making your hubby feel like he’s got a 24/7 reality TV camera aimed at his wallet. Over the long run and when you are ready, however, I recommend going back and doing a traditional category style budget.
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Jenn @ Paying Myself - How do you strike the balance when you’re cohabitating and/or married between accepting help and fixing your own financial mistakes (e.g. my boyfriend and I moved in together in the spring, and he has offered to help pay off my credit card debt)? How can helping each other out with past debts affect a relationship and how do you prevent it from becoming a problem? Any other words of advice in such a situation?
Manisha – Wow to be honest, that’s a tough one. It’s like being asked, “how many children should we have?” The answer is so highly personal. The best advice I can give is that if someone is offering this type of help it should be as a gift, not a loan.
Loans, love, and family tend to be a fairly toxic mix over the long run. And if it makes the recipient feel in any way obligated or beholden to the other person, think long and hard before accepting. This kind of offer is great if it comes from a place of unconditional love and a desire to put to rest past mistakes. Where it can become tricky is if the motivation is to control, dominate, or enable bad financial behavior. Only you will know which category the offer falls in. Bottom line, as a couple, you want this kind of help to be something you BOTH feel great about.
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Karin - My significant other and I have been together for almost two decades, and have always contributed 50/50 to expenses, savings and asset purchases. But I’m planning to return to full-time study next year to train for a new career, so will be spending some time out of the workforce (and living off my savings). I’d like to ask him to contribute more to our living expenses while I have no income, but after so many years of self-sufficiency am uncomfortable about even raising the subject. How do you start such a conversation?
Manisha - I LOVE this question, thank you so much for raising it. I’m seeing this situation happen a LOT. I think the way you raise it is straight up – you both love each other and want the best for each other over the long run. If what’s holding you back is feeling like asking for help would make you less independent – I’m here to tell you that asking to readdress the split of expenses so as to protect your hard earned savings is a POWERFUL act.
When I need to raise a tricky subject I remind myself of this wonderful quote, “Truth is the best antiseptic.” Just speak from your heart, acknowledge that it’s hard for you to even bring up the subject, and then put out on the table the proposal that you makes your heart sing. You two can discuss from there to find a solution that works best for both of you. So please, please, please – summon your inner power person and raise this topic. I’m rooting for you!
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The 3rd Winner of the Giveaway is Mrs. Smith! Congratulations. Please email me your name and mailing address to receive your prize.
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I Need a New JobSeptember 7, 2010
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Thank you! I found this post in particular very helpful (and not just the answer to my question)!
You know, the responses to these questions are so good, I went out and bought the book! This is great. I did want to say something about the questions regarding marriage and debt. Doesn't it matter what state you reside in?
P.S. If I don't win a copy, I'm definitely ordering one with my Swagbucks!