Navigating Finances in a Relationship

0:02What is up, Daddy Gang? It is your founding father, Alex Cooper with Call her daddy.

0:12Daddy gang, I am back with the one and only Miss Dow Jones. We did an episode on finances for someone that is really just getting into the finance world, trying to figure it out. You may be on your first job, your second job, your third job. You're in your 20s, you're in your 30s, you're wherever you are in life. I think this conversation the other week was really helpful and I saw so many people happy that we had it. So I figured let's have Miss Dow Jones back on and let's have a little conversation. about how to handle finances in romantic relationships. Haley Sachs, aka Mrs. Dow Jones, welcome to Call Her Daddy.

0:47O-M to the G. So excited to be here. What did you just say before we started recording about popping my cherry? I said, I'm honored to be popping your financial cherry on the show. Like, it's about damn time. It is about damn time because as I was preparing for this interview, I was like, you know what? It's so interesting because we love range here on Call Her Daddy. It's like one week we're talking about like really heady and emotional internal things. And now we're going to about to talk about something that's very tangible and very important for my audience to listen to. Daddy gang, let me give a little intro.

1:20Okay. Mrs. Dow Jones, you are the zillennial financial expert and make all things money related easy to understand through your content. If finances weren't already hard enough, daddy gang, they have become even more complicated to manage when you're in a relationship. shit. So let's get into it. Managing money when you're in a relationship, because this shit can fucking end your relationship. Okay. Dow Jones, you're going to help us today.

2:02first question why is it so uncomfortable to talk about finances in a relationship so So in my experience, there's two reasons why this is so uncomfortable. The first one is that you, the person, just doesn't know anything about their own finances. So they're like, cool, how am I supposed to talk to them about it when I am 1000 % in the dark? So you don't feel confident yourself. So you don't feel confident asking or bringing it up. And then number two really goes back to how you're raised. So, you know, growing up, a lot of people come from families where like money's associated with shame and with greed and with stress.

2:46And our partners are the ones that we want to have like us the most and find us attractive. So we don't want to bring something up that's going to like give them the ick. Oh, that's such a good point. Especially young couples. It's like, you're not usually going to be making all these, like this crazy money. So like you're embarrassed also to potentially like, do I make more? Does he make more? Does she make more? Like, what is the dynamic? And then also you're right. It's like, there are some families that would be maybe way more inclined to speak about it because maybe they were well off. And it was like a more casual conversation where as maybe there was also a sore subject in the house of like, no, I can't give you an extra$20.

3:24Like things are tight. So it felt very, yeah, connected to a feeling that it elicited within us that felt like hush, hush, do not talk about this. at what point in a relationship if ever should you ask your partner exactly how much they make I mean I feel like people first of all if you want to invest I want to start a dating app where credit scores are on it so I feel like we could be really cool co-founders but um it's so good you know like we got to get it out there early but you know I think that there's natural moments in a relationship where you can talk about money if you're moving in together if you're getting a dog together, if you're getting engaged, like, you know, these are natural openings, where money comes up.

4:09And so those are awesome to take advantage of. But I think the earlier, the better that you can start to just bring money into the conversation, it doesn't need to be, hey, how much is in your savings account, but you know, talk about their upbringing, what was money like? How were their parents with it, you know, just sort of figuring out where they're coming from. And that's a lot easier than recalibrating a relationship that has existed for many years where money is not talked about. Like, I actually been working with this woman who is has been with her fiance for 10 years, and they're getting married.

4:49And she has credit card debt, and they've never talked about it. He doesn't know. And they're going deeper into debt for the wedding. She's like gotten a nose job, got the big ring, got engaged in Paris, like planning the whole shebang. And it's so crazy because it's like, they're starting this quote unquote next chapter together, but they're going to be doing it in the red. And he's also marrying her dad. And it's just, I'm obviously trying to get her to open up, but it's been 10 years of sleeping next to someone that you just are not telling the truth to. That's such a hard dynamic because again, it's like, it ends up, yes, being an issue with honesty, but I also can see the other side of like, oh my God, like, how do I even broach this topic?

5:33And I also love that you said in daddy gang, you should take this. It's like when you're having conversations, a lot of times we put so much pressure on ourselves to just go right for what the answer that we want. So we just bring up a conversation that's so aggressive. And it's like, there is something to be said about having some social awareness of like, hey, we have never in our lives together spoken about finances. So maybe you're so right. It's like, let's ease in by, let's just talk about our childhoods. How were you, middle-class, lower-class, upper-class, how were you raised? And leave that on a Monday.

6:05And maybe then in a couple of weeks, bring up a new conversation that can push the conversation forward. But in order to actually have it be comfortable, because this is such an uncomfortable topic, be mindful of how you're approaching it. I would say like, okay, let's say we're getting ready to take the next step. We're ready to move in with our partner. What actual logistical types of financial conversations should we be having? And what should we be sorting out? Well, I think first things first, you need to know how much they make and what their credit is, because when you're applying for a mortgage or a lease, they're going to ask those questions anyways.

6:44So, you know, better to know going in than to be like, wait, why did we get denied? And then it's a whole thing. So getting that out in the open up front, but then also figuring out how much does each person have to spend towards moving in? You know, like say we're moving in together, I can put$3 ,000 in, but you're making a lot more than me and you want to put it, you want to live in like a$12 ,000 per month apartment or whatever, like maybe like you pay for the the difference. You know, every couple is sort of different, but you need to have the conversation and then also figure out how you're going to split the expenses.

7:22Like who's going to take care of the utilities, who's, you know, electricity, all those things. Like we, you need to have that figured out before you move in. You wouldn't get a new job and start a job without a contract. So think about it that way. You need to have like the rules of the game. Totally. And like, just getting so granular here, cause I'm sure when my listeners are listening, they're like, wait, okay, I need more specifics. Like if someone in the couple is making more money than the other person, how do you figure out the split for rent and bills? Like what is fair? Okay. So this is an amazing question.

7:58It's one that I get a lot and there's basically three answers. So you just choose which of the three applies to you. And I also have a financial love language quiz that I made for Daddy Gang. Oh my God. I know. I literally made it because I was like, they're going to have these questions. So it's free and it will tell you exactly where you're at on the scale and what to do, give you actionable advice. We got you, financeschool.com. Amazing. Daddy, you can find it. I'll tell them also. We will put it in the description, Daddy Gang, and you can click out and go take this freaking quiz. Yeah, we're going to hook it up.

8:33But okay, so there's three different ways that you can split the money. one is 50 50 so like uh Gabrielle Union and Dwayne Wade she came out yesterday said that they split it 50 50 and he makes more than she his net worth is more than four times hers but they're 50 50 that's what works for them even though he's made he's worth so much more they're down the middle so that's one way the second way is one person is paying for everything so I always think about like Taylor Swift, you know, like she, I'm a Swifty. There's a lot on Swifty Twitter about like Joe Alwyn being poor, like her, whatever they make fun of like, because she's so loaded and whatever, like, so pick out lyrics that prove that whatever.

9:19But, you know, I assume that if you're dating Taylor Swift, you're sort of just on that ride and she's paying for everything. So that's another one. And then, you know, a third one is percentage based, which is the one that I feel the most comfortable with where it's sort of like, yeah, like, okay, this percent of my income equals that percent of your income. And maybe that percent for you is$10 ,000, but the percent for me is$3 ,000, but we can combine those and it will feel fair because it's just like where our salaries are at. It's very rare to date someone who makes the exact same amount as you.

9:59Totally. And I think obviously there can be a small discrepancy of like, oh, I only make like 20 ,000 more than you. I mean, that's still a lot. And like, I think when I was thinking about one of my friends, when she was living in New York city, her boyfriend was making like$300 ,000 a year and she was making 70 ,000 a year. And he tried to just split the rent in New York city the same. And it was like, you, you can't do that. There's no way that you should be paying the same amount that doesn't make any sense. Well, but it's also like, it's more like she needs to say, this is what I can afford towards rent and own that and be like, hey, okay, I can spend$2 ,000 per month towards rent.

10:41So we can either get an apartment that's$4 ,000 where you're meeting me there. Or if you want to live somewhere else, I'm happy to put in that $2 ,000, but that's all I can contribute. Like not letting them pressure you. Yeah. They're broken up now. So, but it makes me also think like, isn't there something? Cause I remember living in New York and I remember when I was making$40 ,000 and I had to be really specific about my rent. I don't know if, does this mean it's the max, but a lot of people have this rule of like, you should only pay for rent 30 % of your paycheck or what you make. Is that true?

11:16That's a, so yeah, I love, uh, so I use the 50, 30, 20 budget. So 50 % of your after-tax income goes towards means 30 % to wants and 20 % to future you. So then within that 50%, you can spend 30 % of it on rent. But there's actually like all these articles coming out right now that because rent is so expensive that people are spending 40 % on rent and in cities like New York, that's become really inflated. But 30 % is a really good rule to follow. Thank you for bringing that up. Do you think that it's beneficial to track how much each person in the relationship is contributing towards things like dates, food delivery, drinks while out at the bar, Ubers, like AK more luxury expenses outside of bills and then necessary home expenses.

12:04You're talking about like a couple that Venmo's each other for ramen. That sort of vibe. Yeah. Yeah. Yeah. That sort of vibe. Okay. Well, we celebrate that if it's what works for you and we love that for you, but like, I am not the girl who has ever itemized my finances in that way. Like I like the percentages to know, okay, the 30%, this is how much I can spend per month having fun. Maybe that means a trip. Maybe that means I'm like taking beta omakase, like whatever it is that's working for me that month, I'm doing it and I'm feeling generous. But yeah, I think that when you get into that, for me, at least, it makes it feel like our finances are really separate.

12:48Whereas it feels really good when you're building a relationship with someone to feel like, okay, we're actually working towards something together. I agree. It's like kind of like a natural social awareness thing when you're like, if, if he has paid or she has paid or whoever has paid for the past 10 dinner dates, but they make more than you, maybe you pick up the next one. And just to make a gesture of like, hey, I appreciate you and I recognize you and I want you obviously to know that I am also willing to put my credit card down and pay for something. that's huge I think that a lot of people though don't do that like I was working with someone who is I always she's a high earner and she usually dates guys who make less than her and but she sort of is working through some feelings of like she's uncomfortable about how much she earns she often lies about how much she's making to the guy but always gets herself in situations where she is like bankrolling the whole relationship and then feeling financially taken advantage of.

13:50And so I'm really trying to get her to have, like sit down and say, hey, are you freeing a few days to talk about money? Don't spring it on them. Few days come and then say, hey, you know, like I've been feeling like I am sort of picking up the check a lot when we're going out. How do you feel about that? You know, is there anything that you think that we could do to sort of work on that? Obviously the answer is obvious. They should help pay. But, you know, helping them come to that conclusion together is important. Yeah, but that's a real thing. At what point in a relationship may a couple want to consider a joint bank account?

14:27And what are the pros and cons here? Oh, joint bank accounts are amazing. I think if you're moving in together, it makes a lot of sense. That's a great place to run all of your shared expenses through. So you're putting in your utilities, your rent, all those things into that joint bank account. But you have to remember that whenever you are co-signing something financial with someone, you are sharing responsibility. So you should never do that with someone that you don't 100 % trust and know that they can withstand, like they can hold up their end of the bargain. Like that same woman that I was just talking about, she, the guy that she was seeing, lived, it was a long relationship and he wanted to rent a house where he was living.

15:10But I, the one that he could afford was sort of crappy. She was like, okay, like I can help you. Like we'll get a nicer one. So when I come stay with you, I'm like excited. I like where I'm living. And his credit was so bad that she actually just ended up signing the whole lease and then they broke up and he's still living there. And so it's, it's, it's a disaster. We're working on it, but I, you know, she, she was thinking more about lifestyle versus like, what are the implications of me signing this document? And I think it's really important to remember that like the same thing with a joint credit card, joint credit cards are amazing.

15:47You can earn points together, go on great trips, but you should never do that. If it's someone who, you know, spends recklessly and you can feel that. Yeah. It's like, you really have to trust the person that you're essentially taking a financial risk on there's so many rewards but there's also such really negatives that can come from it if you don't really know what they're up to then all of a sudden you could check one day and your credit is fucked because you've been withdrawn for how many days or weeks and it's like I guess I guess people may also be wondering like what if the couple has different spending habits let's say she loves to treat herself with shopping trips and nice dinners and he's more frugal and prefers to really only spend his money when it comes to travel.

16:30Like, do you have any tips on how to navigate this financially? Well, first thing I'll say, Alex, is in order for a relationship to work, it doesn't mean that you have to have the same financial habits. As long as you're compatible and you can get to a mutual understanding and a place that feels fair, that's the goal. The goal is not for you to each be spending in the same way for him to see you, you know, spending at the spa and then being like, hey, I should go to the spa too. You got to do what you actually care about. But I think it's really important to have common goals that you're working towards.

17:05And then having money every month that's just for you to put towards the things that you value. That's like no questions asked. That's my financial freedom. That's just like, you don't need to know about it. Yeah. I'm thinking of like speaking of vacations, because I'm like, what if she likes to go on vacations. It's like summer is around the corner. And obviously many of us may be wanting to plan a trip with our significant other. Like, do you have any tips for saving up for vacations? Yes. Well, first of all, I think vacation as a couple is such a great, uh, like moment because it can for a lot of couples, it's your first shared financial goal.

17:43Like, okay, we want to do something together. That's so great. So first things first, figure out your number. How much can you how much you want to spend on the vacation and then I am all about automation like I swear I would have no investments no savings nothing if I did not automate my finances truly daddy gang like automate because you're gonna forget to do things can you explain what that means yes so basically as humans like think about when you wake up you have so much willpower and energy you're like I'm gonna exercise today I'm gonna do everything in my to-do list I'm like you know gonna go volunteer here, you're your best version.

18:20But then by 3pm, you're tired, you want a cocktail, you'd like to, you know, close your blinds, whatever it is. So the same thing sort of happens to your finances, where when you are first like making a financial plan, you can have all of this gusto towards it and energy. But then when it actually comes three weeks from now, or four weeks from now, when you have to go back into your finances, re review them, transfer that money, you might not have the same energy because willpower is finite. So instead of relying on yourself, just automate these deposits and it will naturally build up. And it's super easy to set up.

18:59From your checking account, you can set up an automated deposit into your high yield savings account and set up an automated deposit into your investment accounts, your Roth IRA, all these things. So it's naturally building for you and you don't have to worry about it. Yeah. I agree with you. It's like, sometimes you'd be like, Oh wait, but I did want to go on a shopping spree and I was supposed to put things into my savings today, but blah, blah. It's like, in order to hold yourself accountable, it becomes like, no, remember where you were when you made the decision that it's so important to be putting these in fine in your savings.

19:30So stick to that and allow, I get what you're saying. The automated part of it is to just hold yourself accountable and to not have to then like go back and forth on how you feel about your decision. You know, it's for the best. Let that lead. Yeah. What about like, okay, so say we like saved for a trip, but I think a lot of times people struggle about like, what about any tips for budgeting and not overspending once you get on vacation? Cause I think a lot of people get so stressed of like, you only budgeted almost to get to the vacation. And then you're like, shit, like we spent so much more than we actually planned for.

20:04Yeah, 100. I mean, we've all been there. So I think like knowing your number in advance, and then working backwards from there is really helpful. I also think traveling places where the dollar is strong, is such a good idea. Like, I have a friend who recently went to Argentina, where the dollar is really strong. And she was like, girl, I had a five star trip for a two star price, like staying at the Four Seasons, everything felt like it was 40 % off. I was like, okay, I need to book myself a trip there like that is a good life hack amazing um so that's a good one i also i know this is random but eat your biggest meal and like most fancy meal at lunch because for whatever reason lunch is always less expensive and so if you sort of treat yourself for lunch then you can eat something more random street food whatever for dinner but you're still having that experience and then just overall remote it's not so random about lunch like why don't That is so random and such a good point.

21:00Like why is lunch so much less expensive? Like it's the same food. I don't get it, but we're going to get a minute. I love it though. It's such a good point. I'm like, okay, that is really tangible advice. I guess my next question also was like, what is the biggest financial mistake you see couples make within their relationship?

21:37okay the first one is definitely just financial infidelity uh lying lying about what you make lying about how you're spending like i have a big problem with uh like on social media there will be, you know, lots of reels or TikToks where it's like women hiding their target purchases from their husband or like ignoring the budgeting talk or whatever, you know, you have to take an active role in your finances, even though there's usually one person in the relationship who's a bit more interested, you still need to play a part, you don't ever want to give someone else all the the financial power. Like think about Erica Jean and Tom Girardi.

22:21Like she was like, well, I have a platinum card and I'm going to go shopping. And then like, now she's indicted. So it could happen to anyone. Oh, it's so scary. It's so scary. Yeah. You can never blindly trust. As much as it's so painful to have these conversations dating, it's also so important because it weirdly does build trust because there's transparency. but until you create that transparency, there can be lies and deception. And not to say if you don't bring this up, there can't still be that, but it allows you to actually have a greater chance to have a successful financial relationship with your partner.

22:59I'm trying to think also like, just quickly for our ladies that aren't in a relationship and they're like, you know what? I love this for you guys, but I am so low-dolo over here. And like Dow Jones, how do I... I feel lost. And, and I, I have been there before. I remember when I graduated college, I will be honest. I had no freaking idea what I was doing financially. I would call my dad and be like, I don't have enough money to even start savings dad. Like, what do I do? Like, what am I doing? Like, can you just give someone maybe that just got out of college is starting to make their first paycheck, like a little crash course of just how they even go about beginning to manage their finances correctly.

23:41Okay. I've got you. Like I am you. I feel you like, first of all, I am single. So I get it. Like, sorry that the rest of this episode didn't apply to you, but we're at this now. Okay. So here's the thing about money. It doesn't really matter how much you make. It matters how much you keep. So even when you are, as if you have a cashflow, then that is a chance to build the habit of having a little bit of money every month that you can put towards future you. And if you can't do that, when you're making$35 ,000 per year, you're probably not going to be able to do it when you're making$350 ,000 per year.

24:21So no matter where you're at, it's really important to build that habit. But I think the first thing that you need to do is really just work on your mindset, because none of us are ever taught about money. We are never like given these tools, it's something that is really fear-based. It's very easy to ignore. And so the first thing is really just empowering yourself and being like, Hey, I can do it. And I'm telling you, if I can do it, you can do it because truly I did not know anything. So, you know, like, and I've seen, I've seen thousands of people get from there to feeling so confident. So it's definitely doable.

24:58And then the second thing is just taking inventory of where you're at. And And this doesn't mean looking through like years and years of bank statements. Just look at one month that felt sort of normal. It was a month where, you know, you didn't travel, you weren't sick and like not leaving your house and not doing anything. Just one month that felt sort of average and go from there and start to figure out how much does it cost to be you. And I have amazing free tools on my website that can help make all of this easier, including the money book, which is my personal finance, like magical spreadsheet, because I did one thing I'll say is that I did all of the apps and apps really don't work.

25:39I think that with finance, you have to physically do it and like go through your, you know, your numbers, your bank statements, your credit card statements, because when you let something, when you let it be automated, you never make any change. Like it can tell you what to do, but you're never actually going to make any changes. So that's really important. I love that you said like, we weren't taught this. Unless you were a freaking finance major, Daddy Gang. I remember getting into college and literally feeling so dumb because I didn't even know how to do my taxes. Like that is, I remember I got on TurboTax when I went, I like left the city, went back to Pennsylvania.