When it comes to relationships, Keisha Blair knows opposites can attract. And those opposing views and behaviours can sometimes be around money.
Blair, founder of the Institute on Holistic Wealth and author of “Holistic Wealth,” says she and her spouse, Lindsay Blair, have their own unique financial personality types that can sometimes complement each other, and at other times stand in opposition.
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Using her book’s personal financial identity framework, Blair describes herself as a “risk taker.” This is someone who “prefers to take on more risk in an effort to accumulate more assets and investments, and with a view to further certain financial and lifestyle goals,” she says.
Lindsay, on the other hand, is a “minimalist” type. This is someone who prefers to live simply, is frugal and more risk adverse when it comes to investing and debt. He’s the type to change his car brakes himself to save $500 dollars, Blair says.
Blair and her spouse prioritize open communication to ensure their differences don’t cause relationship problems, but a point of tension can be that Blair has felt restricted by her spouse’s hesitations toward risk.
“I have to temper my excitement because we have to agree on certain things,” she says. “He likely sometimes feels like, ‘Here she goes again’ rattling off the next exciting investment, and it’s not at all exciting to him. It’s actually more nerve-racking … that conversation sends off alarm bells. For him, living a minimalist lifestyle with zero headaches is his end goal.”
Blair has learned to plan these conversations ahead of time with all the math worked out to show her husband how a particular investment can fit into their goals and spending plans.
“For the minimalist, this helps a lot in lowering their anxiety,” she says.
While Blair and her partner have the language to communicate and understand each others’ differences, not all couples may reconcile their different money mindsets and behaviours so easily. And, couples who don’t deal with these differences may experience more friction.
“You need to address money differences head on and try to get on the same page. If you don’t, resentment can build on both sides,” says Shannon Lee Simmons, a certified financial planner and founder of the New School of Finance.
“The higher the financial stakes, the higher the emotional stakes when it comes to being on different pages with your money.”
Right now, as many Canadians battle with a higher cost of living and a coming recession, any existing money matches can feel heightened, she says.
Some couples may find that one person wants to “batten down the hatches” by putting all their financial energy into paying down the mortgage debt or adding to their emergency fund, while the other partner has the mindset of “this too shall pass,” she says. “A difference in risk tolerance can really showcase itself in these times.”
Natasha Knox, a certified financial planner and founder of Alaphia Financial Wellness, says the first step couples need to take in resolving different money outlooks is to set an expectation that they’re each going to examine how their own behaviour is contributing to any issues at hand, such as arguments, communication breakdowns or secrecy.
“Each party will be working on themselves. It’s not reasonable to enter any kind of process expecting to change your partner. That just does not usually end well,” Knox says.
If each partner makes that commitment, then they need to each explore aspects of money they have always assumed to be universal truths. Those could be opposing views such as “some debt is normal,” or, alternatively, “all debt is bad,” for example.
Ryan Becker, director of adviser engagement at CI Global Asset Management, says it’s important for couples to reflect and discuss where these money mindsets come from, which he attributes to inherited attitudes, personality traits and life experiences.
“Money patterns we observe in childhood are the primary source driving our financial decision-making later in life. These become inherited attitudes,” he says. For example, Becker has memories of his parents working overtime to deliver flyers and Sears catalogues for extra cash. That recollection of scarcity and the need to work overtime has influenced Becker’s own behaviour, even if it’s not actually a financial necessity.
With personality traits, those more inclined to engage in risky pursuits, like sky diving, are typically willing to take on more risk with their money. When it comes to life experiences, pivotal shifts can influence future behaviour, Becker says. For instance, Becker’s parents bought their first house in the ’80s when interest rates were north of 15 per cent, so their focus was paying down that debt as soon as possible. That influences their approach to debt today.
Knox recommends couples get clear on their shared desires and shared values that brought them together in the first place. These shared values can then lead to ways of collaboration when it comes to personal finances.
“When partners are trying to see things truly from the other person’s perspective and put themselves in the other’s shoes, that’s when we can start to see progress in that couples are able to come closer together on these issues,” says Knox. The key is to be open and curious to develop a sense of empathy, she says.
Blair recommends couples create a money mission statement that outlines what their goals are for the next five years and how money can be used to meet them. In this mission statement, couples can note key values around money that they agree on, such as giving back. This is also an opportunity to highlight how each partner’s different strengths can work toward achieving financial goals.
In Blair’s relationship, as the risk taker, she is the one looking at investments and seeing how the couple can maximize their retirement income. Lindsay, as the minimalist type, likes to manage the budget in a spreadsheet and keep on top of taxes.
Blair also recommends couples have money date nights to work or reflect on their mission statement, talk about what’s influencing their money behaviours, and track progress toward their goals.
“If you have big money plans in the near term, like buying a new home, moving to a new city or country, a wedding or baby on the way, then I would say biweekly money date nights are a good thing.” Otherwise, for maintenance, she recommends once per month.
Blair says to create a date-like atmosphere by buying your favourite snacks and drinks to make these dates as fun and relaxing as possible.
In Blair’s own relationship, Lindsay’s been able to bring her “back down to Earth” if she wants to take on a major risk, while she’s been able to show him the value of taking on a new type of investment.
“It’s not a bad thing if you have a different personal financial identity than your spouse,” she says. Couples can make it work by being accountable to each other.
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