Because finances are often cited as the number one reason for divorce, financial planner Sophie Blais-Yalbir says it is important to think about the type of relationship you have regarding money and finances. 

“Keep this topic at the forefront of your marriage,” she said. “If you have a hard time talking about finances, bring in a third party – a priest, counselor or financial planner.  Schedule a time to talk about it – weekly, monthly – whatever works best for you.”

She suggests setting some ground rules to talk about money.

“Find a time that works.  Don’t wait until there is a problem or major spending spree that’s happened before having a conversation about finances.  The goal is to have a relaxed and calm conversation when there isn’t much going on. Share how you feel about money, your hopes and dreams about finances. Encourage your spouse to do this as well.”

Couples should discuss how their parents dealt with money, what it meant to their families while growing up, and how it impacted past relationships. 

“Know thyself and then be honest with your spouse,” she said. “If you are independent, you may feel it’s hard to be taken care of financially or vice-versa.  You may want to be taken care of financially, but you are the only one working or you are earning more than your husband.   You may resent his negative spending habits.  You need to be honest with your own feelings first.” 

Here are a few of Sophie’s ideas to help keep communication lines clear and to facilitate working together.

1) Discuss your goals and dream together

2) Remember there is no “I” in “TEAM.” Use references such as “we, the family, or us” as opposed to “I, me or you.”  

3) Be supportive and help one another to improve.  “If you tend to go a little crazy on shoe spending, ask your husband to gently remind you (not lecture) of the 20 other pairs in your closet,” she said.  “If he likes to go out on an annual fly-fishing trip, even when times are tough, gently remind him of the families’ financial commitments and upcoming expenses. Tell him that the two of you can start saving for next year because you know how important it is to him.”

4) The key to financial security is to manage cash flow and know where the money is going. 

“Agree to disagree in some areas, but be united on the major items such as living expenses, spending on the kids, big ticket purchases, etc.,” she said. 

5) Play to your strengths and designate one bill payer. “It’s easier, as long as this person shares how things are going and updates the other on what needs to be done,” she said.

Tips for Teaching Children about Money

What type of relationship do you have with your kids regarding money and finances? Do you deny them nothing, and only deny yourself?  Are you open with them?  Are they free to make age-appropriate money decisions themselves? Or do your children think “money does grow on trees?” Are you worried that your older children are ill equipped financially to make it in this world?

Regarding young children, Sophie suggests:

• The “3” bank system -- SAVE, SHARE, SPEND.  With a $5 budget - $2 to save, $2 to spend, and $1 to share.  “This teaches kids at an early age that we are called to share what we are given,” she said.

• Regarding sharing their money, let the kids decide how to do it -- in the collection basket at church, buying something for a friend who they perceive to be in need, or sharing with their siblings.   

• Set up a bank account for the children.  Have them be part of the process of depositing money.

• Give them an allowance.  “They need a basic understanding of ‘family commitments,’ and they can receive some additional money for extra jobs,” she said.

• Help them save for special occasions like a trip or an item them really want. 

• Encourage entrepreneurship to teach kids about taking some risks and using their gifts with a “business sense” – lemonade stands, selling cookies at a garage sale, art shows.

• Talk about “wants” versus “needs” and “rights” versus “privileges.”

For older children:

• Set up bank accounts

• Help them set their money goals. Sophie said, “If they are leaving home and are off to university, ask them these questions: ‘Where do you see yourself after the university?  What will it take to get you there?’”
• Discuss: Saving for School, Saving for a Car, Spending Money

• Again, talk about “wants” versus “needs” and “rights” versus “privileges.”

• Share the family budget.  “The best way for an older child to understand budgeting is to actually see one,” she said.

• Review what it costs to run a household. 

• Share good books or good information on the internet. 

• The Bottom Line is “have the conversation.” 

“The same rules apply as with a spouse,” she said. “And remember, the best conversations happen when there is no crisis. 

She lists some good books and Internet sites below:

-The Second Life of Money: a Kid’s Guide to Cash by Kira Vermond

-Your Kids Can Master Their Money: Fun Ways to Help Them Learn How by Ron and Judy Blue and Jeremy L White

http://community.bmo.com/smartstepsforparents/steps

http://www.canadianliving.com/life/money/the_dos_and_donts_of_teaching_your_kids_about_money_2.php

http://www.todaysparent.com/parenting/family-finance/teach-your-kids-about-money

http://www.oprah.com/money/Teach-Kids-About-Money/1

Talking to Your Parents

“Some of you might be wondering why having discussions with your parents is even necessary,” she said. 

“I ask all of my clients about their parent’s financial situation – why?  It could impact theirs! Almost ½ of the adult children who have a parent living with them do not discuss finances, and many people have little or no knowledge of their parent’s situation.” 

Having this conversation can help them secure their financial future, she said.  Sophie suggests asking the following the questions: “Do they have enough to see them through to retirement, since people are living longer today? Do they have plans in the event that something happens to one or both of them?  What type of care are they looking for?  What happens in the event of an emergency?”

Sophie acknowledged that having this conversation requires some finesse and good timing.

“Many of our parents grew up in an era when you did not talk about money, so they may not be comfortable having these conversations with you,” she said. “Parents have no obligation to talk to you about money – not legally, and maybe even less emotionally.”

Following are some of her ways to make this talk easier:

• Use yourself as the example – share with your parents what you and your spouse have done regarding your own finances and planning.  If you are open about your own finances, they may be more comfortable to share with you.

• Use an example, such as saying you have a friend whose mother is really sick and now she’s worry about what the future holds for her mom.  And this made you wonder about your parents’ situation...

• Aging boomers and healthcare figures prominently in our headlines, and this can be the door opener for a broad discussion.  Next time you read something in the media, talk to your parents about what you’ve read and ask them what they are doing in this area. 

• If they can’t talk about it, perhaps they can write it down.  “If the words can’t come out, ask them the jot down their thoughts, where specific documents are kept, and any special wishes they may have,” she said.