Author Archives: Financial Freedom Engineer

How to get your partner onboard the FI train

If you’re looking to achieve financial independence and you have a partner, how well you work together is an important factor for achieving success. Even if you aren’t on a financial independence journey, not seeing eye-to-eye on household finances can be hazardous to your relationship. In fact, financial issues are commonly sighted as a common reason for divorce in Australia (Weiss 2020). In this post I’m going to share some of my thoughts on how to get your partner on board the financial independence train.

For the purposes of this post I’m going to assume that you’ve been with your partner for a while and have merged finances, because, let’s be honest, this isn’t first date discussion material.

Communicate your intentions
Communication is one of the key building blocks of a great relationship (Brenner 2017). When you have a goal as significant as achieving financial independence, it’s important that your partner knows about it. Because people’s decision-making process is mostly driven by emotion (Weinschenk 2019) it will be more effective to appeal to their emotional side rather than use logical reasoning. Start the conversation around what you want to achieve and why this is important to you. Financial freedom is ultimately about choice so you should aim to communicate to your partner that you want to have the choice to do what you want with your time regardless of how much income it produces.

Start with the why

Helping your partner to understand why you want financial freedom is an important part of getting them on board. Understanding the reasons behind you wanting to achieve financial independence helps to give the goal meaning which is a major part of creating positive internal motivation (Schinnerer 2018). I’m a big believer in using internal motivation to drive action because I find that it is not only stronger but also longer lasting than drawing motivation from an external source. Remember, you want your partner to be motivated to work with you when it comes to financial independence.

Understand your partner’s point of view

In my own experience, when it has come up in conversation that I don’t want to work (in the conventional sense) until I’m 65, people are usually confused. They are confused about what I would do with my time; how I’ll get money to survive without working; or is something like this even possible? If your partner is not familiar with the financial independence journey then you need to be prepared that he/she will have a similar reaction. As mentioned earlier helping them understand the reasons why you want to achieve this goal is going to play a huge part in motivating them to work with you. I would even say that the ‘why’ is more important than the ‘how’ because it creates motivation, and with enough motivation, anything is possible.

Communication is always a two-way street, which means that while you need to present your intentions, you will also need to understand your partner’s point of view. The FIRE movement is relatively niche so it’s likely that your partner will not share the same view as you when it comes to your personal finances. Here are some of the reasons that I’ve come up with as to why your partner may not share your perspective:

They haven’t thought about it
For most people, compared to a topic like how your footy team is doing, finance is really boring. Also, they’ve got by in life just fine without having to deal with it and retirement is so far away, so what’s the point in worrying about it now? Understand that the human brain is wired to seek immediate reward over long-term gratification (Chu 2017), so it’s likely that your partner may not have even thought about financial independence because there are so many other things that affect them here and now.

Their finances might not be in order
If your partner isn’t doing well financially this can be a source of embarrassment. In any case, but this one especially, finance conversations must be a judgement free zone. Remember that both of you are participating to support each other.

No intention of retiring
Some people really enjoy their jobs and have no intention of ever retiring; which is something that I think is really awesome. However, even if this is the case, there’s still no harm in building financial independence. After all, financial independence does not mean that you must quit your job; it merely gives security as well as more freedom to do what you want with your time.

They have been taught that spending = happiness
With companies spending billions of dollars every year to educate society that they need to consume and spend it’s likely that your partner believes that spending = happiness. Understand that your partner will likely believe that spending less than you earn requires huge sacrifice. However as you know from my ideas around the abundance mindset, I believe that this is untrue. In communicating with your partner your job is to empower them to see that so much of our spending here in Australia is unconscious and wasteful; and that gaining control over their spending is liberating.

They don’t know what to do
If your partner has thought about it but they don’t know what to do then this is great, you get to work on it together! However, it’s still very important to have a discussion around goals and what you both want to achieve as this will provide clarity so that you both direct your efforts towards helping each other.

Change takes time
If you think that you can have 1 conversation and turn you partner in a 50% savings rate machine and personal finance guru you are way too optimistic. Dealing with the consequences of change are difficult for anyone and you are certain to encounter resistance. This means that you will need to be patient and understanding towards the source of resistance so that you can both navigate the changes together.

Compromise

Only once your partner understands how important financial independence is to you and what the benefits are, can you start discussing things like goals and getting into the mechanics of how to achieve your own financial freedom. Understand that in personal finance, financial freedom is just one of a multitude of goals that people/couples will want to achieve so everyone’s path is going to be different. This means that both of you will need to compromise on many things, for example, the desire for one party to take time off work to raise children might mean that you need to prolong the time it will take to reach financial independence. This is not a negative thing; it’s just something that you both need to agree on so that you can focus your energy on achieving your goals as a partnership.

Work on the how

The ‘how’ refers to designing a plan that will help you to achieve financial independence. It looks at things, like savings rates, growing earnings, investing, insurance etc. Executing this plan will require a lifestyle change. If you’re starting from scratch then it’s a good idea to look at one area first and create short term initiatives/goals that are achievable in order to build momentum and confidence. I find that by breaking a large goal into lots of small ones I’m much less likely to lose motivation and more likely to succeed. One example from the FFE house is that we found that we were wasting money by buying groceries then eating out so we agreed to work together to plan our meals in advance (including going out) to stop this waste. This is an example of a small initiative that, when combined with others, has contributed to our >50% savings rate over the years.

Use a financial advisor if required
A financial advisor can assist with both the how and the why. In my previous article about engaging a financial advisor, I discussed how they can assist with the process by being an intermediary for these conversations. A good advisor will be experienced with guiding the direction of these conversations as well as asking the right questions in order to allow both parties to come to a compromise on goals. They will also be able to assist with the more technical aspects of the planning process. However, regardless of whether or not you choose to engage a financial advisor as a couple you’ll still need to have your own discussion around your goals and intentions together.

Have regular conversations
Having a goal, or vision of what your ideal life should look like together is important, but so is being kept accountable for your actions over the course of many years. Therefore, it’s important to have regular conversations to keep each other accountable and remember that both parties have equal stake in the journey. As people’s goals are a likely to change over time, your plans and actions will need to change as well. This makes regular conversations important for continued clarity of direction as well as helping you to take action earlier. Forward planning and earlier action increases your chances of success by requiring less effort in the short term compared with huge changes in the long run.

Concluding thoughts

So there you have it, my thoughts on how to get your partner onboard the financial independence train. In the end it’s all about communication and mutual understanding, I believe that if you have those 2 things then motivation and the ‘how’ will naturally follow.

Engineer your freedom

References

Weiss, A, 2020, What are the causes of divorce in Australia?, Aussie Divorce,Last accessed 11/5/2020, <https://www.aussiedivorce.com.au/familylawnews/what-are-the-causes-of-divorce-in-australia-.html>

Brenner, A, 2017, 7 Building Blocks of a Great Relationship, Psychology Today, Last accessed 19/5/2020,<https://www.psychologytoday.com/au/blog/in-flux/201704/7-building-blocks-great-relationship>

Weinschenk, S, 2019, How People Make Decisions, Smashing Magazine, Last accessed 19/5/2020, <https://www.smashingmagazine.com/2019/02/human-decision-making/>

Schinnerer, J, 2018, The Power of Positive Internal Motivation, PsychCentral, Last accessed 19/5/2020, <https://psychcentral.com/lib/the-power-of-positive-internal-motivation/2/>

Chu, M, 2017, Why Your Brain Prioritizes Instant Gratification Over Long-Term Goals, According to Science, Inc., Last accessed 19/5/2020, <https://www.inc.com/melissa-chu/why-your-brain-prioritizes-instant-gratification-o.html>