Don't Let Money Ruin Your Relationship— Instead Follow These Tips from Jason Tartick
In this episode of the Money Rehab podcast, financial expert Jason Tartick and host Nicole Lapin explore navigating financial discussions between partners. They emphasize open communication, transparency, and maintaining separate personal accounts alongside a joint account for shared expenses. The conversation also provides insights into the financial implications of starting a family, including setting up savings, securing insurance, and considering costs like childcare.
Additionally, Tartick and Lapin examine the psychological factors impacting financial decision-making. They highlight the importance of self-reflection, mindfulness, and seeking professional help when needed. The episode offers practical tips for building a healthy relationship with money by addressing emotional biases and unhealthy spending patterns.
This is a preview of the Shortform summary of the Nov 12, 2024 episode of the Money Rehab with Nicole Lapin
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1-Page Summary
Navigating Financial Discussions in Relationships
Financial expert Jason Tartick emphasizes the importance of open and honest financial discussions between partners to build trust. He suggests couples explore key financial questions together in an empathetic manner.
Tartick recommends financial transparency, but opposes excluding partners based on credit scores. He proposes couples maintain a joint account for shared expenses while preserving financial autonomy through separate personal accounts.
When facing financial conflicts, Tartick recommends addressing issues without blame, viewing past mistakes as opportunities for improvement. He provides an example of resolving financial infidelity constructively after divorce.
Preparing for Having Children
Jason Tartick and Nicole Lapin offer advice on the significant financial considerations of starting a family. They recommend understanding costs like childcare and healthcare, setting up savings and investment accounts early, and securing life insurance.
Tartick suggests opening a 529 college savings plan before the child's birth, allowing friends and family to contribute. He also advises consulting financial professionals.
Lapin notes that having children requires complex financial conversations between partners, including creating wills, balancing careers and childcare, and maintaining household budgets.
Psychological and Behavioral Money Management
Tartick and Lapin discuss how emotional biases and unhealthy spending patterns impact financial decision-making. They criticize practices like requiring certain credit scores or bank balances as reinforcing toxic financial biases.
Lapin shares her past struggles with credit card debt, while Tartick attributes debt among younger generations to social pressures and desire to match appearances. He advocates for "behavioral-based budgeting" by reviewing statements to understand underlying spending reasons.
Both experts recommend self-reflection, mindfulness, and gratitude to build positive relationships with money. Tartick suggests therapy for those with deep-seated financial insecurities, as Lapin notes financial trauma can lead to money issues.
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Counterarguments
- While financial transparency is important, some individuals may value privacy and feel uncomfortable sharing all financial details, preferring to maintain a level of financial independence.
- Joint accounts can simplify finances for shared expenses, but they can also lead to disagreements if partners have different spending habits or financial priorities.
- Addressing financial conflicts without blame is ideal, but it may not always be practical, especially if one partner consistently makes financial decisions that negatively impact the couple.
- The recommendation to set up a 529 college savings plan before a child's birth assumes that all parents have the financial means to do so, which may not be the case for everyone.
- Consulting financial professionals is sound advice, but it may not be financially feasible for all couples, especially those already struggling with finances.
- The idea of creating wills and maintaining household budgets is important, but the process can be complex and daunting, potentially requiring legal assistance which can be costly.
- Behavioral-based budgeting is a useful tool, but it may not address the root causes of unhealthy spending patterns, such as mental health issues or lack of financial literacy.
- Self-reflection, mindfulness, and gratitude are positive practices, but they may not be sufficient on their own to resolve deep-seated financial issues or replace the need for professional financial advice.
- Therapy can be beneficial for financial insecurities, but access to affordable mental health services is a barrier for many individuals.
- The emphasis on saving and investing early for children's future assumes that parents have the current financial stability to prioritize long-term savings over immediate financial needs.
Actionables
- You can create a "financial date night" where you and your partner discuss money matters in a relaxed, non-confrontational setting, perhaps over dinner at home. This regular event can be a space to review financial goals, discuss any concerns, and celebrate financial milestones achieved together, making the process of financial transparency and empathy more enjoyable and less daunting.
- Develop a "future fund" game with your partner where you both contribute a small, unexpected amount of money to a joint savings account whenever you experience a positive event or make a financially savvy decision. This gamifies the process of saving for future expenses like childcare or education, and it can help associate positive feelings with financial planning.
- Initiate a monthly "spending reflection" session with yourself, where you write down not just what you spent money on, but also how each purchase made you feel and why you think you made it. This practice encourages mindfulness and can reveal patterns in emotional spending, helping you to develop a healthier relationship with money and make more informed budgeting decisions in the future.
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Navigating financial discussions and decisions in romantic relationships
Financial expert Jason Tartick and author Nicole Lapin delve into the delicate yet crucial discussions around money in romantic relationships.
Discuss money openly and honestly with your partner to build trust and understanding
Tartick strongly disapproves of the idea of excluding potential partners based on credit scores on dating apps, though he does support openness regarding financial matters. He believes such transparency is crucial as relationships advance toward marriage or cohabitation. Tartick's forthcoming book, "Talk Money to Me," underscores the importance of these conversations, offering eight key financial questions for couples to explore. He encourages treating these conversations like any other in a relationship: with fun, openness, and empathy.
Establish healthy financial habits and practices as a couple
Tartick addresses the concept of financial visibility between partners, especially for those who are married or living together. He also discusses the importance of prenuptial and postnuptial agreements to help couples tailor their financial arrangements rather than depend solely on state laws.
He suggests that finding a financial strategy for couples is not a one-size-fits-all process and may take time. Among recommended strategies is having a joint account for shared expenses, while also maintaining separate personal accounts to preserve individual financial autonomy.
Overcome financial conflicts and past financial issues
Addressing financial skeletons can be difficult, but Tartick stresses the importance of discussing these without blame or shame. He views recognizing financial infidelity as an opportunity for improvement and stresses the need for solution-focused conversations.
Tartick also touches on the concept of debt, explaining that it’s not always negative and can be used constructively. However, understanding past behaviors related to financial problems, a ...
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Navigating financial discussions and decisions in romantic relationships
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Counterarguments
- Discussing money openly and honestly can sometimes lead to discomfort or tension if not approached delicately, as individuals may have different values or emotional connections to money.
- While excluding potential partners based on credit scores may seem superficial, some might argue that financial responsibility is a legitimate compatibility factor in a relationship.
- Transparency is important, but there should be a balance between sharing financial details and maintaining personal privacy, especially in the early stages of a relationship.
- Treating financial conversations with fun might not always be appropriate, especially when dealing with serious financial issues that could affect the relationship's future.
- Establishing healthy financial habits is crucial, but what constitutes "healthy" can vary significantly between couples, and there's no one-size-fits-all solution.
- Financial visibility is important, but complete financial transparency might not work for all couples, as some individuals value financial independence within a relationship.
- Prenuptial and postnuptial agreements can be useful, but they can also create a sense of mistrust or pessimism about the relationship's longevity.
- Having a joint account for shared expenses is practical, but it might not be the best approach for all couples, especially if there are large disparities in income or financial habits.
- Overcoming financial conflicts is essential, but some financial issues may be symptomatic of deeper relationship problems that need to be addressed beyond just the financial symptoms.
- Recognizing financial infidelity as an opportunity for improvement is optimistic, but it may not always be possible t ...
Actionables
- Create a "financial date night" where you and your partner set aside time each month to review your finances together, making it a relaxed and enjoyable experience by incorporating your favorite takeout or a fun activity post-discussion.
- This can help normalize financial conversations and make them a regular part of your relationship. For example, after discussing your budget, you might play a board game or watch a movie, associating positive feelings with financial planning.
- Develop a "financial empathy exercise" by each sharing a story about a money mistake or a financial fear and then discussing how you felt and what you learned from it.
- This practice encourages understanding and support, rather than judgment. For instance, if one partner shares about an impulsive purchase that led to debt, the other can respond with a similar experience or offer understanding, which can foster a deeper connection and trust.
- Design a "financial ...
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Preparing financially for having children
Starting a family is an exciting phase in life, yet it comes with significant financial considerations. Jason Tartick and Nicole Lapin offer advice on how to prepare financially for the arrival of a child, highlighting the importance of early planning and clear communication between partners.
Understand the financial implications of starting a family
Factor in the costs of childcare, healthcare, education, and other child-related expenses
When planning to start a family, it is critical to understand and plan for the costs associated with raising a child. This includes expenses for childcare, healthcare, education, and other necessities. Parents must assess their current financial situation and make adjustments to accommodate these future expenses, ensuring they are prepared to support their child's needs.
Set up saving and investment accounts for the child's future
Open a 529 college savings plan to take advantage of tax benefits
Jason Tartick recommends that future parents set up a 529 college savings plan even before the child is born. This account is specifically designed for saving for education costs and comes with tax benefits. Tartick notes that friends and family can contribute to this plan during various celebrations and milestones, such as baby showers and birthdays. He advises consulting with a Certified Public Accountant (CPA) and working with an investment specialist or doing due diligence before selecting investments within the 529 plan to make the most of its growth potential over time.
Consider life insurance and estate planning to protect the family's financial security
Apart from setting aside funds for education, parents should also consider securing their child’s financial future through life insurance and estate planning. These steps protect the family's financial security and ensure that childr ...
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Preparing financially for having children
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Counterarguments
- While understanding the financial implications of starting a family is crucial, it's also important to recognize that overemphasis on financial readiness can lead to undue stress or delay in starting a family, which has its own set of consequences, such as potential fertility issues with age.
- Factoring in costs is essential, but it's also necessary to acknowledge that not all costs can be anticipated, and flexibility in financial planning is important.
- Setting up saving and investment accounts is a sound strategy, but it's also worth considering that not all families may have the means to do so, and there are other ways to support a child's future that don't involve significant financial investment.
- Opening a 529 college savings plan is beneficial for those who can afford it, but it assumes the child will pursue higher education, which may not align with every child's path or the future landscape of education and work.
- Life insurance and estate planning are important, but they may not be accessible or affordable for everyone, and there are other ways to protect a family's financial security that could be more suitable for some families.
- Discussing financial responsibilities is key, but it's also important to consider that rigid roles and e ...
Actionables
- You can gamify saving for your child's future by setting up a challenge where you match dollar for dollar the amount they save from allowances or gifts, encouraging both saving and financial literacy.
- This approach not only helps in accumulating funds for your child's future needs but also teaches them the value of money and the impact of saving from a young age. For example, if your child saves $10 from their birthday money, you contribute an additional $10 to their savings account, effectively doubling their savings and incentivizing them to save more.
- Create a 'Family Financial Roadmap' with milestones that include your child's major life events and associated costs, and track your progress visually on a timeline.
- This visual tool can help you anticipate and prepare for future expenses such as education, extracurricular activities, or first car. You might mark out expected costs at different ages, like the cost of braces at age 12 or tuition fees at age 18, and then use color-coded markers to indicate when you've reached a savings goal for each milestone.
- Engage in a 'mock ...
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The psychological and behavioral aspects of money management
The psychological and behavioral aspects of money management play a crucial role in how individuals handle their finances. Identifying and addressing emotional biases and unhealthy spending patterns can lead to more robust financial health.
Recognize and address emotional and behavioral biases that influence financial decision-making
Examples that show biases in financial decision-making include the requirement by a dating app for a specific credit score for membership and nightclubs demanding proof of a certain bank balance for entry. Jason Tartick criticizes these practices as "toxic means of financial transparency" that reinforce unhealthy biases about wealth.
Identify spending patterns, impulses, and insecurities that lead to unhealthy financial behaviors
Both Nicole Lapin and Jason Tartick speak to the emotional impact of financial management. Lapin shares her past struggles with credit card debt and the realization of its impact on her future and mental health. Similarly, Tartick compares untreated financial issues to ignoring a cavity because delaying action on small financial problems can result in greater issues. He also discusses the credit card debt among Gen Z, attributing it to social pressures and the desire to keep up with appearances. This phenomenon is emphasized further through his advice on "behavioral based budgeting," which involves reviewing statements to understand underlying reasons for spending.
Tartick openly discusses his personal experiences with excessive spending, which stemmed from his insecurities after moving to a new city. Lapin's admission of her own financial issues reinforces the significance of confronting unhealthy financial behaviors.
Develop healthy money mindsets and habits
Both Lapin and Tartick emphasize the importance of self-reflection in understanding spending behaviors and the value of questioning the underlying reasons for financial decisions to build healthier relationships with money.
Practice mindfulness, gratitude, and self-reflection to b ...
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The psychological and behavioral aspects of money management
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Counterarguments
- While emotional biases and spending patterns are important, some might argue that financial literacy and education play a more significant role in financial health.
- The idea that credit score requirements and bank balance proofs are inherently biased could be countered by the argument that these measures are intended to ensure financial responsibility and compatibility in certain social or economic contexts.
- Some might suggest that while identifying spending patterns is useful, it is equally important to focus on systemic issues such as income inequality and the accessibility of financial services.
- The emphasis on the emotional impact of financial management might overlook the fact that for some individuals, financial issues are not a result of personal failings but of broader economic conditions.
- The concept of behavioral-based budgeting could be criticized for not taking into account those with fixed or limited incomes, where spending is not a matter of choice but necessity.
- The focus on confronting unhealthy financial behaviors might be seen as placing too much responsibility on the individual without acknowledging the role of aggressive marketing and consumer culture in shaping spending habits.
- While self-reflection is encouraged, some might argue that it is not a panacea and that practical financial strategies and tools are also needed to manage money effectively.
- The recommendation for therapy or financial coaching ...
Actionables
- You can create a "spending diary" to track not just where your money goes, but also how you feel about each purchase. Write down every expense and note your emotions or the context of the spending. This can reveal patterns tied to mood or social situations, helping you understand the emotional triggers behind your spending.
- Develop a "financial alter ego" to practice making decisions from a different perspective. Imagine a character who embodies financial wisdom and ask yourself, "What would [Alter Ego's Name] do?" before making a purchase. This can create psychological distance from emotional biases and help you make more rational financial choices. ...
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