The Getting Financially Naked Playbook
there are two levels in my opinion of getting financially naked. The first one is this one on one level you're casually dating. So you're going to be talking about things like who pays for dates, how much are we spending on gifts? You know, maybe birthdays, christmas, the holiday season, how lavish are our dates, What kind of lifestyle are we leading together? And I will tell you asking these questions of a person really does start to give you some context clues about their relationship to money. Now you get to the 201 level when you realize this is either someone I could marry or somebody that I could spend a good chunk of my life with. So it's time for full frontal financial nudity and here's how we're going to get there. Step one is preparing yourself. So I want you to take time to even physically write down what it is that you want to talk about with your partner, what do you want to discuss? And also what is it that you want to be sharing? And then I want you to pick a location pr...
eferably at home. Hopefully without any roommates around our parents depending on your living situation. Please don't do this at a restaurant because let me tell you sometimes first at bat with getting financially naked doesn't always go perfectly, tempers can rise. People can get a little heated and if you're in a very public place that just makes it all the more uncomfortable. So make this as comfortable as possible with one another. The next thing you want to do is set a time. So let me tell you the first time that I got financially naked. It was very, um, I will say not tactful. I turned to my now husband and I said, how much did a loan debt do you have? Just out of nowhere didn't give him any context and kind of blindsided him And one of you do that to somebody. They may immediately get defensive because it could sound accusatory depending on your tone. I also don't think I probably had the best tone when I asked that first time. But the other reason is you want to give that person the opportunity to go through the same step one process you did. They need to be able to think about what they want to ask of you and also determine what they want to share this first time that you're going through the process of getting financially naked because remember this is an evolving situation. You don't have to just talk about every little thing. The very first time you open up this conversation, it's something you can ease into But make sure you let your partner know, hey at, you know, 7:00 next Saturday. I want to sit down at home and have a conversation about our finances. You may even let them know ahead of time. The kind of questions that you want to ask. So they have the opportunity to reflect about whether or not they feel comfortable answering that yet and if they want to know the same of you next is to ready your poker face. This one is crucial through the process of getting financially naked because think about it this way. If you were to get physically naked in front of another human being and they laughed at you or made a face or snickered or did anything else that made you uncomfortable? You're probably not going to get naked in front of that person again. Well, same thing when it comes to money, this is a hugely intimate thing for a lot of us next. How do you actually start this conversation? That's always the number one question I get. It's important. I get that. I should do it. But how, how do I actually open it up when we're sitting there in front of each other about to get financially naked? Well it's not in the way that I did. Where you just out of the blue ask a question about debt. One of the options is this awkward and are honest, Start where you say to your partner, I know this is an important next step. I feel a little awkward and uncomfortable about it. How do you feel breaking the ice? Just admitting that this can be tense. The other option, One of my favorite strategies is this idea of sharing goals and you kind of almost backdoor the conversation if you will you start by saying something like what's one of your financial goals or what's something you want to achieve in the next five years. Your partner might tell you, maybe that's um I want to be able to take a trip to europe and you say, well what's standing in your way? And that's usually the opportunity to talk about something like debt or anything like that. So it's goal sharing. It starts off with a positive. But then you can have a conversation about why that might be difficult to achieve or what is impeding your ability to reach that goal. So what is it exactly that you need to share with one another? I said full frontal financial nudity and I mean it, I think you need to be sharing absolutely everything with a part with a person that you want to be sharing your life with now, does that mean right away the first at bat in this conversation? No, you don't have to do this the very first time. But if you are going to commit yourselves to each other, especially legally, these are all things that you're going to want to know, including how much you each earn, the types of debt you have. Is that auto loans, student loans, mortgage, credit card debt and how much exists. I highly recommend sharing your credit reports and scores with one another. It gives you a sense of somebody's financial history and credit health, your savings and investments, what you have now as well as your financial goals. Where are we looking to go towards in the future And financial goals is a biggie too because it really also helps determine financial compatibility and finally go back to the very first segment of this entire boot camp and talk about sharing your financial baggage. And the reason that this is such a critical part of getting financially naked with one another is because it gives you insight as to why your partner might behave the way he or she does about money. And it gives them insight about you. You can start to understand why there might be a compulsive spending pattern or why they are. So you know dogmatically focused on saving. Maybe there's a conversation about a past history of financial abuse. So your partner feels very strongly about always having his or her own emergency savings fund that's separate from you that you have no access to. That's something that you need to be able to talk about. There's a lot that you can start to unearth when you begin to share your financial baggage. So I encourage you to go through that questionnaire we did at the very beginning of this boot camp with one another and talk about things like your first money, memory. How does it make you feel, how did your parents talk to you about money? How did you learn about money and just see if you can start to identify patterns about why you behave the way you do today. Next up you want to learn if you're going to have a team or an individual mindset together and this is where I'll kind of bring it back to my own situation and when we were getting financially naked, because you need to identify is it your debt and my debt or is it our debt? Now, obviously this can be a very evolving situation. If you're casually dating, it should be yours and mine. If you're getting serious, maybe before you actually get married, you want to have a conversation about helping each other that's completely up to you. But for me, we didn't tip into the ar det territory until actually after we were actually legally married to one another. But the problem is sometimes you tackle this thing like an ownership mentality. So one of the things that you start with is determining your goals, both as a partnership and as individuals. And even if you are married, you still should be having individual financial goals. Not every single thing needs to be totally a partnership in the sense of for instance, maybe you have an individual career goal where you want your salary to go that's not necessarily linked to your partner. So you want to make sure that you're both having these individual goal settings and share them be accountability buddies with one another, you also want to be deciding who pays which bills, how to budget. So where salaries are going and what is your financial priority together. This is something that is going to shift over time, it might shift within the first couple months of you actually originally setting these goals, but you want to make sure that this is an open conversation. Now, some of the time, particularly in this idea of who pays the bills, how do we budget? What's our priorities? You might find that one person in the partnership is much more interested than the other. I hear from a lot of couples where it's like, well I just handle all the bills because he or she isn't interested in doing it if that's the strategy that you have, that's okay. However, I would always encourage you to make sure that your partner has the information at their disposal because if something would ever happen to you, they need to be able to know all the information where the bank accounts are the investment accounts, all the passwords, how to pay the bills, how much is owed because you don't want them to be in a scenario of having to grieve you or take care of you and you might be in a situation where you can't be paying them off and then they're also frantically trying to figure that out. And again, as I mentioned earlier, it needs to be a flexible evolving process because life's going to change, things are going to happen. So priorities will shift, even who pays which bills could easily be shifting over the course of your relationship and then it's time to implement your game plan. So to come back to this idea of the ownership mentality, what we decided to do was have my husband's income, peaches income, he was going to have some of it go towards retirement and his emergency savings fund. That's now our emergency savings fund that we're building together and then the remainder goes towards debt repayment. So the money that comes out of his salary goes towards paying off the debt. And my salary handles our day to day bills and our savings and investing goals. So I feel like I'm contributing and helping him pay it off because I'm handling kind of the day to day part with my salary. And he still gets to feel some of that ownership mentality because the money that he earns and brings into our relationship is going towards aggressively paying down his student loans and then you need to have a routine check in. It can be once a quarter a couple of times a year. I personally, like once a month when you're starting out because it really gives you an opportunity to continue to touch base with one another, see how you're progressing towards your goals as a couple as well as individuals. It does not need to be a long, drawn out conversation. It can just be a quick 10 minute meeting where you check in on the accounts, you just touch base about your budget, make sure that you guys aren't overspending. The other reason that it's important is because depending on how you're deciding to bank as a couple. If you're doing two separate accounts, maybe you're doing joint, maybe you're doing a hybrid, you want to make sure that the right hand knows what the left hand is doing. It becomes very easy if you're not 100% joint to have one person spending a bit more and the other person not realizing it. And then you can easily blow your budget frankly on accident. So that's another reason the routine check in can be very helpful, especially as you just start to foundational be building your financial life together.