“We opened a joint account. Now we’re both equally confused.”
Picture this: You and your spouse are enjoying a casual conversation when the topic of money arises. Instead of sidestepping the issue, you both engage in a meaningful discussion about your goals and the strategies that will help you achieve them.
This is financial intimacy in action. It’s more than just keeping tabs on your investments; you’re creating a shared vision for your future. This is especially important when you’re managing U.S. investments while living in Israel, when some of the issues are a bit more complex. What are the wealth secrets that allow some couples to work together on their finances while others argue?
Open Financial Communication: The Bedrock of Your Relationship
Open communication is essential in any strong relationship, and this is also true when it comes to finances. Money can often feel like a taboo subject, leading many to avoid critical conversations. However, avoiding financial discussions can lead to misunderstandings, missed opportunities, and financial strain.
Begin by discussing each spouse’s risk tolerance. Perhaps one partner is drawn to the potential high returns of U.S. tech stocks, while the other prefers the stability of FDIC-insured bank deposits. By having these conversations, you can create a balanced investment strategy that respects both of your comfort levels. This approach ensures financial security as well as fostering mutual respect and understanding.
Start Small: Build Financial Trust One Conversation at a Time
Financial discussions don’t have to be daunting. In fact, they shouldn’t be. Start with the small, everyday decisions that impact your financial well-being. For example, you might discuss whether to invest in a U.S.-based mutual fund, which pools resources from many investors to create a diversified portfolio, or an ETF (Exchange Traded Funds) that tracks a specific index, such as one focusing on the Israeli market. These seemingly minor conversations build a foundation of trust and make larger financial discussions easier to navigate.
Jon Kabat-Zinn, a prominent professor and founder of the Stress Reduction Clinic, wisely noted, “The small things? The little moments? They aren’t little.” This sentiment captures the essence of financial intimacy. Every conversation, no matter how small, plays a crucial role in building a strong financial relationship that can withstand challenges and changes over time.
Transparency: Build Financial Trust
Transparency is the cornerstone of any successful relationship, financial or otherwise. Without it, trust can erode, leading to conflicts and misunderstandings. Both spouses should have a clear understanding of their financial situation, including assets, liabilities, and ongoing expenses. This level of openness builds trust and ensures that both partners are actively involved in managing their financial future.
One effective way to support transparency is by setting up a shared financial dashboard. This tool allows both partners to track their U.S. brokerage accounts, IRAs (Individual Retirement Accounts), and other investments in real-time. By regularly reviewing this information together, you encourage joint decision-making and create a financial journey that is truly a shared responsibility. This approach fosters trust and ensures that both partners are on the same page when it comes to financial goals and strategies. A dashboard does not need to be anything high tech or complex. At the very least, it can be a piece of paper or a notebook that you update monthly or quarterly. If you’re more tech savvy, make a spreadsheet or find an app that can store, sort, and organize your data.
Equality in Financial Decisions: A Partnership That Lasts
In a healthy relationship, financial decisions should be made together. It’s easy for one person to take the lead, especially if he or she is more financially knowledgeable or confident. However, true equality in decision-making involves both partners learning and growing together.
The French Enlightenment thinker Voltaire once said, “It is not inequality which is the real misfortune, it is dependence.” In financial relationships, both partners should be empowered to take part fully in financial decisions. Making decisions together builds mutual respect and strengthens both your relationship and financial security. By sharing the responsibility of financial decision-making, you ensure that both of you are equally invested in the outcome.
Flexibility: Adapt to Life’s Unpredictable Changes
Life is full of unexpected events that can affect your financial situation. Whether it’s a move to Israel, a sudden career shift, or the decision to start a family, your financial plan needs to be flexible enough to adapt. By reviewing and adjusting your strategy, you ensure that your financial goals remain aligned with your changing circumstances.
Flexibility in financial planning not only protects your finances but also strengthens your relationship. This proactive approach to financial planning ensures that both partners are equipped to handle life’s changes with confidence and security.
Financial Intimacy: The Foundation of a Strong Partnership
Financial intimacy goes beyond managing money—it’s about building a life together. By fostering open communication, transparency, equality, and flexibility, you not only secure your financial future but also deepen the connection with your spouse. Financial intimacy transforms money from a source of potential conflict into a tool for building a stronger, more unified relationship.
By applying these strategies, you’ll not only achieve financial success but also strengthen emotional bonds, setting the stage for a lifetime of shared happiness and financial security.
To further enhance your financial relationship, I recommend reading “How to Strengthen Your Financial Future as a Couple.” This article offers actionable steps and expert advice on aligning your financial goals, ensuring a harmonious and prosperous future together.
Douglas Goldstein, CFP® is the director of Profile Investment Services, Ltd. www.Profile-Financial.com. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of this website, Portfolio Resources Group, Inc. or its affiliates. Nothing in this article is intended to be investment, tax, or legal advice. Information in this article is gathered from sources considered reliable, but we cannot guarantee their accuracy. Past performance is no guarantee of future returns.
