MI Rewind: How to Talk About Money w/ Erin Lowry

23:35To begin getting smarter about investing, just visit theinvestorspodcast.com slash get started with stocks. That's theinvestorspodcast.com slash get started with stocks. And for a limited time, you can use code STOCKS15 for a 15 % discount at checkout. All right, back to the show. Outside of just giving them money, whether it be a loan or a gift, how can we help them just get on the right path? What if you know they have a good job, they have a good career, they're doing well, they're just not good with managing their money, whether it be buying cars they can't afford, going on trips they can't afford, just spending above their means and what they make.

24:18How do we help them at least get on the right path without coming off as judgy or just overstepping our boundaries? I often say in those scenarios, one, you just keep modeling good behavior and assume that they're seeing that you're modeling good behavior. And two, only really provide answers when asked. It's not helpful, especially with family dynamics like that. You'd be like, oh, can you really afford that car? What's your car payment? Can you really afford that? Instead, if they make a comment about feeling stressed about their finances, that's the door that's just been cracked open. Be like, oh, what's stressing you out?

24:52Oh, I just feel like I have so much debt. Well, what kind of debt do you have? I actually paid off X amount. I don't know if you knew that. I'm happy to help walk you through how I set up a debt repayment plan if you want. Just offering that kind of support. Or they start a new job. That's a door opening for you to be like, oh, are you contributing to your company's 401k plan? I don't even know if you knew, but they might actually give you free money if you contribute to this plan. I'm happy to help you set it up because I know it can feel really overwhelming at first. When I first did it, I didn't know what I was doing.

25:23So being vulnerable in that way and And only really trying to give advice if it's solicited or if the door gets cracked open for it a gentle way, you to provide some sort of insight. Because otherwise, it's just going to feel like you're constantly judging their choices and decisions. And that might make them rebel even further in a particular kind of way. I'm really curious to hear your opinion on this next question, because it's something that I've thought about a lot myself personally the last, I don't know, two or three years probably. and it's around this idea of buying books that you enjoy.

25:59We listen to podcasts. A lot of times, you're a reader. You're interested in these topics. We're reading about these books. I'm a big reader. How do you feel about gifting personal finance, investing books? You can talk to one group of people and they say it's the worst idea ever. You can talk to other people. They think it's a great gift. Where do you fall on that? As somebody who has written three, I love when people gift personal finance books. I get a lot of messages from people. They're like, oh my God, I love your book. I bought it for all of my siblings and for my best friend. Now, if you're going to do that, I love it, but I would customize why you're giving it to them.

26:32So just last night, I was talking to a friend of mine who was like, oh, I actually just gave my sister your investing book because she just started a new job and was asking me a lot of questions about how to start planning for retirement. So I just bought her a copy of your book. Things like that, where there is again, this door opening, this foundational reason, or if it's Christmas time, listen, my books are all called Broke Millennial. It can be a gag gift, to be honest. But the other thing is write little notes, put little post-its in sections. Hey, when I was your age, I read this book. It truly changed my life and how I think about money.

27:11Here's my three favorite sections of this book. I put them on a little post-it note for you. I hope you enjoy it. And then don't pester them about it. Because I think that's the other part is people then start to try to quiz their siblings on, oh, have you read it yet? Oh, well, did you get to this part? What have you done? Has it changed anything for you? They'll get there. Give them time. So for me, I typically have fallen in the camp of buying books for people. I typically over the last three, four years have done that. I'm a huge book collector. I listen to a lot of audio books, but I still collect physical books.

27:41I have a little personal library downstairs. I probably have 250 or 300 books. So I like giving them to people. And to your point about previous conversations, opening up the opportunity to do that, my brother, who's a little bit younger than me, I'm 25, I'll be 26 in two days. He's a little bit younger than me. So he's like 22, 23. And of course, he gets really wrapped up in these hyped up stocks, if you will. And he got really pulled into Tesla. And I don't invest like that. A lot of people who listen to the show know I'm a value investor. I follow Warren Buffett. So I don't follow those types of companies at all.

28:17And so I told him that. And so for Christmas, I bought him this book called The Education of a Value Investor. He had opened that conversation with me because we talked about Tesla and investing. So I bought him this book to help teach him on how to be a value investor. I don't know if he's read it. I doubt it he has a month later, but at least that conversation, that opportunity to give him that book was opened by him previously in a conversation we had had previously. And also, So I never gift just a book. I gift the book just because I want to, but I always get them a normal gift that is unrelated to the book.

28:49And that's a nice way to do it too. I think also adding any sort of inscription about why you're giving it to them, like that being a perfect example of, hey, we had this chat. I just wanted to give you a book that really informed why I became a value investor. Now, next Christmas, maybe he'll give you one about how to pick hot stocks, and we'll see what happens. But it is a really nice way to also show that you are just thinking about them in a particular way and not like, hey, I'm just trying to get you to come over to my side. Robert Leonard Yeah. And as he opened it, I told him, I got you this because of our conversation about Tesla.

29:22So he knew. And I think for me, the big piece is that it's not a replacement of a gift. Like I said, I always get them whatever I would get them anyways, and then just get the book on top of it. So at least they're not feeling gypped because I chose to get them a book. In a work environment, at least in everyone that I've worked in and that I've heard about, it's typically frowned upon to talk about salaries. How do you recommend we talk about it with our co-workers? Well, I would love for it to be a very open, honest conversation. But as you just mentioned, there are some workplaces where it is frowned upon.

29:57In the United States, it is typically illegal to fire somebody for asking others about salary. However, they can always manufacture another reason to get rid of you. So that is one big thing to consider. Now, you need to first understand your workplace dynamic. Is it comfortable for you to ask other people how much they make? Now, let's say that it is. You're in the super open workspace. Great. You can talk to other people about it. How do you actually ask is usually the big question. So what, the who, it's great to ask people who do your current job, have the same title that you do at the same company, somebody who just got promoted out of it, or somebody that hires for that position.

30:39Now, if it's the person that hires, you're asking them their salary. You're asking what is an appropriate salary for said position. There's a bunch of different scripts that are in the book about how to ask. One of my favorite is, hi, I want to talk to you about salary because, insert your reason, going in for a negotiation, asking for a promotion, get the sense I might be getting underpaid. Would you feel comfortable telling me if you make X or the ballpark over under, or just bluntly, could you ballpark your salary for me? The other nice thing about that script is if you're working in an environment where, heck no, you definitely cannot ask anybody.

31:18You can take that script to LinkedIn and start cold emailing people who do similar type work in the same or similar city at the same type of company. You want to control for as many of those factors as you can. Because if you're working in New York City, you shouldn't be emailing somebody in Boise because cost of living is so different. Salaries should also be different. So then you can just start cold pitching people, give them reason for why you're asking. Hey, I think I might be getting underpaid compared to the men in my office. I think you have information that might be helpful for me. Could you tell me a ballpark of your salary?

31:50I'm happy to follow up and tell you what happens. Sometimes piquing people's curiosity can help. Email 30 or so people because you're probably only going to get a handful of responses. Then negotiation experts in my book talk about trying to get at least three men and three women as sort of a control for potential disparities for various reasons. And if you're a person of color, making sure that you're reaching out to both people of color and white people as well. Again, trying to control forgetting information that might show any sort of racial wage gap. When it comes to our boss at work, how do we negotiate with them?

32:23How do we handle the potential negative repercussions of trying to negotiate? Because I think that's what most people are worried about. I think most people are probably okay and willing and muster up the courage to actually talk to their boss about the conversation, but I think they're more worried about what could happen afterwards. What are the negative repercussions that could come from this? How do we handle that? And how do we negotiate? Well, in terms of negative repercussions, a lot of that depends on what you're asking for and how you're asking. I mean, you don't want to be threatening about anything when you're going in to talk to your boss, even if you've uncovered something like a wage gap that is significant.

33:00There's a story in the book from a negotiation expert that truly feels like an urban legend. And she had a client that she was working with who found out that a couple of people at her rank in the company were making about$10 ,000 more per year than she was. They're like, wow, that feels like a lot. So this woman goes in to talk to her boss and didn't go in guns blazing. Just, hi, I've come across some information that I just want to have a conversation about. I have found out that there's a bit of a wage discrepancy between me and a couple of my coworkers by about$10 ,000. And I'm curious if you could explain why that exists.

33:39Didn't go in accusatory, just asked the question. He was like, huh, that's strange because they have a scale and you shouldn't be that far off it. Let me check into it. Turns out there had been a typo in the payroll when she got hired. And so they just corrected it, gave her back pay, and she was paid fairly from then on. It sounds so silly, but human error does happen. So first, do not go in guns blazing. Have an open conversation. Now, if you're just going in to negotiate because you've worked at this company a long time, you feel like you deserve a raise and or promotion. So there's no wage gap issue, anything else that you're feeling.

34:15It's just time. A couple of things. One, make sure you time it correctly. Because sometimes people wait until annual reviews to get in the room and be like, hey, I want a promotion or I want a raise. At that point, it might be too late. Budgets might have already been set. Decisions might have already gotten made. So figure out when your company tends to offer raises and promotions, and then backwards plan at least three or so months out from that time. Ask for a meeting with your boss, express interest in your raise and or promotion, and ask for constructive criticism that you can demonstrate why you earned this.

34:50Hey, what can I do to earn this raise? What can I do to earn this promotion? Then go out and do it. And then you can demonstrate I've done this. So that's one of the big ones. The other one, practice negotiating. And I know that that sounds so silly, but for traditionally employed people, you don't actually have a whole lot of option for negotiation. Now for self-employed people like myself, we're negotiating usually several times a month with clients. So you get to work that muscle a bit more. I would say for us, it's more important to be asking other people who do what we do, how much they make.

35:21Because there's no Glassdoor or salary.com or anything for us. You have to go out and talk to other people about rates. Back to the negotiation bit. There's a bunch of tidbits in the book about different strategies, but one of my favorites is this idea of silence is golden. Now, this is not in the Jack Donaghy 30 rock of don't talk first, because I asked a couple of negotiation experts about that. I'm like, you always hear don't talk first. And most of them laughed and said, I mean, I hear why people say that. However, if you're asking for a raise, you usually have to ask first. You have to bring up the conversation.

35:56But silence is golden. You want to ask, make your ask, and then be quiet. Because a lot of people get uncomfortable in about three to five seconds of silence. So instead, if you can just sort of outlast the other person and they start filling in the air, that's where you start to get a little bit more power in the negotiation room. But practice that. Go to a coffee shop, order a coffee at the end of the day and ask, hey, since you're probably about to throw out all those pastries, could I have one 50 % off? And then just see what they say. or negotiate your cable or internet bill. Or if you're going shopping, ask for a 5 % discount just to ask.

36:32Just situations where fundamentally, if they say no, it's not a big deal, but you start to get practice. I think that's a sales tactic too, is letting the other person talk, state your claim or whatever it is you're going to say, and then just sit there in silence. I forget where I read it. It might've been Grant Cardone or some other sales books, maybe even Thinking Grow Rich or one of those seven habits of highly effective people, one of those. But yeah, it definitely does work. And I do that in my life. I tend to state my case and then just sit there and let the other person talk. And if you wait just a few seconds, usually they'll be the one to speak next.

37:04And I can actually attest to the typo in HR software because as of this recording, when we're recording this now, I'm leaving my corporate job in four days. So once this comes out, it'll no longer be the case. but about probably a month or so ago, I saw my paycheck change. And I was kind of confused because I paid salary, nothing had changed. It's been literally to the penny every single week, the exact same for the last year. So I was like, huh, why did that change? And so I reached out to HR and there was a typo in the HR system and it changed it. And that's all it was. It could be something as small as that and the same as your story.

37:40Yeah. And so important to advocate for yourself in those situations and not just assume that you're wrong. Because I think that's what we do sometimes is we see it like, well, I must have, I don't know, like changed a tax form or maybe tax code changed, or I don't know, something's different, whatever. Advocate for yourself. And the other thing too, with the negotiation that I really liked, one of the experts made the point of saying, I want, as opposed to I deserve, which sometimes can sound too strong, or I would like, which can be a bit more wishy-washy to say, I want a$10 ,000 raise. Now you can also fill in why you think you deserve it, but saying I deserve a$10 ,000 raise, that might get the hackles on your boss's neck to go up.

38:23They might get a little defensive. And I would like just might sound a little too wishy-washy. So that's some of the actual language too that she recommends using. We've made it to the fourth main money script in your book. And this is the one that I said earlier might be as awkward or as difficult as the one with our parents. This is the one with our significant other, girlfriend, boyfriend, whatever it may be. I'm currently single, so I haven't been through this situation, but it is something I've thought about and wondered how I'd approach it if and when the right person comes into my life.

38:59Before we get into the exact money script, explain to us what a prenup is, and then explain how we start a conversation with a significant other about a prenup? Prenuptial agreement is, and I'm talking really from the American perspective on this, obviously they vary a little bit depending on where you live, but a prenuptial agreement is an agreement that you signed prior to getting married that basically outlines the division of assets in the case of a divorce. That's the easiest, cleanest version of what a prenup is. Technically, as I'm about to get on my soapbox about why I think they're super important and everyone needs to talk about them, technically everyone has a prenup.

39:37It's just the default laws of your state. So then the question becomes, do you want to actually create a prenuptial agreement that outlines what the two of you feel is fair within reason and legal for your relationship, as opposed to just defaulting to whatever state laws would say would happen to the money in the case of a divorce. I think that prenups are an incredibly valuable tool with a terrible reputation and branding problem. That is my big issue with them is they just need a really top-notch brand consultant to come in, judge it up a little bit, change some public perception, because this should just be kind of a default contract that we do where we sit down, have a reasonable conversation with, if something were to happen in our marriage and we were to end up getting divorced, what would we decide is fair?

40:27What do we think right now is fair to us? If you have a business partnership with somebody, if you signed a business contract, There's conversation about what would happen if the business were to dissolve. The fact that marriage has so many financial and legal implications in your life, and you're expected to just sign on the dotted line without knowing the terms and conditions is very stressful to me. It is for me too. That's why I'm glad that we're having this conversation. And actually, Bigger Pockets, one of their shows, Bigger Pockets Money, this was a long time ago, probably a year or two, they did an episode on it.

40:59And it was really, really good. So I recommend And anybody listening to this goes back and finds the episode that they did on it. I'll try and put it in the show notes if I can find it. But it was really good. When it comes to a prenup, is that only things that are pre-marriage? Because I think that's the conception of it is, I have a million bucks right now. We're going to get married. I don't want you to take$500 ,000 from me if we get divorced tomorrow. Because it sounds like it might be more guiding even throughout the marriage. It can be guiding certain things that happen within the marriage as well.

41:30and what could happen in a divorce. For instance, you can have a prenup that waives alimony. So depending on circumstances, if anything happens during the course of the marriage, they could potentially void that prenup. That's a whole different conversation. But you can do things like waive alimony. Or you can do things such as, hey, we're getting married, you have student loan debt, I'm going to pay it off right after we get married. But if you divorce me the next month, you owe me back that money. So you can have provisions in there for certain things that would happen within the marriage. However, it is pretty typical that it's protecting the assets brought in.

42:04It's not uncommon that people agree to split 50-50 or whatever feels reasonable during the marriage. And then after the divorce, it might be either a no alimony or in my case, for instance, I do have a prenup. One of the things are, I'm fine to split book revenue that's earned during the marriage. But if we get divorced, you don't forever have a right to royalties that I earn just because I created that book while we were married. So it's things like that too, that can kind of protect yourself on the back end as well. Are there ways to start this type of conversation early on in a relationship so that it's not a surprise when it arises?

42:43From what I've heard, it's not really the idea itself that's off-putting. It's more that it's just like a surprise. When it gets brought up, it's a surprise to somebody. So how do we manage that dynamic of talking about it early on so it's not a surprise, but also not talking about it too early? That's a great question. I wouldn't be talking about it on dates like two or three. I would be in a slightly more committed relationship. But there are so many media and pop culture ways to get into this conversation. Because there are times when celebrities have dramatic prenups or dramatic divorces. That's an easy entry point.

43:19You might listen to a podcast on a road trip that talks about a prenup. That's an entry point. There's ways that you can just sort of bring it up. Or if you're getting to the point where you're moving in together, or you're getting serious with one another, and you think it might end in an engagement or a marriage, go ahead and bring it up. You can start with just a general question without even saying the P word of, Hey, if we were to get married, what do you feel is a fair way to handle our assets coming into the marriage? And then also, if anything were to ever happen and we were to ever get divorced, what feels fair to you about how we would handle money in that situation?

43:54Don't even have to say the prenup word yet. Just kind of bring up the conversation. I do like the idea of slowly bringing it up over time because the other thing you have to recognize is you're contending with a lot of religious and cultural feelings around the prenup document. A lot of people have feelings about, A, it's just a divorce contract. It's going to doom your marriage. If you're even thinking about that now, why would you possibly get married? To that I say, and that was the big eye roll in case you're not watching the video. First of all, I would like the rebrand to marriage insurance.

44:27That feels like an actually more appropriate way to position a prenup. Do you hope you never have to use it? Absolutely. But if you're going to have to use it, will you be glad it's there? You sure as heck are. Same with, you don't get into your car assuming you're going to hit somebody. But if you do, you're glad you have auto insurance. You don't have homeowner's insurance because you're pretty sure your house is going to burn down. You have it just in case something bad happens. Same with the prenup. The other great perk of the prenup is you have to talk about all these super nitty gritty financial details.

44:58What stronger way to go into a marriage than to have all of these financial conversations out in the open? Now that assumes that it is an equal conversation and not one party trying to force the other party into signing a prenup. So the last thing you want to do is wait until like a month out and then come to your partner and be like, hey, my parents won't let us get married unless you sign this prenup. Also, it's pretty easy to avoid in court if they had to sign it under duress. Just throwing that out there for you. I am also just a big fan of them because of all of the conversations you have to have, the protections that they can outline, and the fact that so many people have these complicated feelings because they will say, I would never, ever leave my partner, no matter what happens, no matter what they do to me, I will never leave them.

45:42And for whatever reason, that might actually be true. But you cannot control another human being. Your partner can leave you. And that is one of the things that I feel is critical to consider when we're talking about a prenup, is even if you are committed till the end, regardless of how that person treats you or your children, they can always walk out the door as well. And you need to make sure that you're protecting yourself. And if you didn't get a prenup, you can also talk about a post-snup. or even if you did have a prenup, it also might make sense to have a post-snup at certain points because your life changes.

46:13So particularly if one person does something like step out of the workforce to raise kids, you absolutely should have a conversation about how that impacts both of your financial situations. Aaron, I think we have a business opportunity here. I'm going to go back and get my JD. I'll be on the lawyer side and you and I can just rebrand. We'll create divorce insurance. We'll make it an awesome thing. I'm all about it. So I think the prenup is so important. Or at the very least, and the other thing I will say to people, it's expensive. And I totally understand why, especially if you're getting married young and you don't have many assets to speak of, I can understand why you're not going to have one.

46:50Again, I say, have the conversation so that a post-nup in the future doesn't feel like you're teeing up your partner for divorce. But at the very least, download a prenup template, like the$60,$75 it would cost to download one of those from one of the online options and go through the conversation. Talk about every point that they tell you to talk about. Even if you don't sign it at the end and get it notarized and do all the things to make it legal, at least you've had so many of those conversations. And that is really, really important. Let's take a quick break and hear from today's sponsors.

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50:40That's theinvestorspodcast.com slash tip-finance. All right, back to the show. The hard part with it is it's really an emotional and psychological problem combated with a logical problem. Because I think if two people are in the right emotional state in their right minds, maybe they're both single at this time and you talk to them about a prenup. I think most people would probably agree that they're a good idea. Then you get involved and you have emotional and psychological impacts that are playing in and having this dynamic. And now it's a whole different situation. Like you said, I'll never leave this person or whatever the situation is.

51:16And now you're not thinking logically. So I think there's this battle between emotions and logical thinking. And for me, I agree. I think it's super important. Like I said, I'm single, so I haven't had to worry about this. But it is something that eventually, as I meet the right person that I'm curious as to how I'm going to go about it because I don't want to talk about it too soon. Like you said, two to three dates, nobody does. But then again, I think anybody listening who's single doesn't want to waste too much time with somebody if it's not going to end up working because you're going to have issues like that.

51:46So I think it's like, if it's not going to work and you can't come to an agreement, how do you not waste time? The other part too is explaining to a partner why it's important to you. The first time I brought it up, my husband, who was my boyfriend at the time, we weren't even engaged yet. I was kind of like, I don't know, aren't those just for like rich people? Which is usually the very common answer. Or I don't know, that just like doesn't feel great to me was sort of the other bit. And I tried to investigate that. What about it feels icky to you? It feels like you don't trust me, you know, all those kind of common answers.

52:22And so I took time, like months and months and months of occasionally bringing it up and explaining my side. I deal with a lot of contracts all the time for work. To me, it feels very similar to that, that we would want to both be protecting ourselves and our interests. And this has nothing to do with love and trust and everything to do with we're making a legally binding agreement. And I feel like, why are we doing that without customizing it to our situation? And just explaining why it made me feel better. And also explaining that, like, hey, hypothetically, if we did get divorced, no matter whose fault, or even if it was a totally amicable thing, those can get heated.

53:00I can get vindictive. I am protecting you from future Aaron in the case that we got divorced. That is part of how I framed it in my mind and to him, that we're setting this contract up at a point where we're very much in love. We want to be generous with one another. We want to be fair to one another, as opposed to dragging out a divorce and slinging mud at each other and going through all of those insane legal fees. You think a prenup is expensive? Divorce is expensive. I wonder, and I don't want this to sound like blackmail, but I wonder if there's almost a way to be like, if somebody is against it, almost say to them, listen, now when we're on good terms, is the right time for me to do this because if we do get into issues, I'm probably going to be a little bit different of a person and might not give you as good of a deal than I would now when we're on good terms.

53:51And it almost sounds like blackmail to me or trying to force that person into this agreement. But I mean, it's the reality, right? When you're on good terms, you're likely to be more logical or forgiving and give more to that person or compromise. Whereas if you're fighting and just divorced or things aren't going well, you're not going to do that for them. That's true. And the other point too is pointing out assets that they do have that they might not be thinking about. Because so often, again, with the prenup, people think, I have to have a certain amount of net worth, or I have to be in some sort of wealthy family situation or what have you.

54:25And you're not necessarily thinking like, hey, you have a pension or you have a 401k plan. And oftentimes, retirement accounts end up getting gutted in a divorce. So a prenup could protect the fact that I get to keep my retirement and you get to keep your retirement and we're not hurting each other's financial futures in the case of a divorce. So you do have assets you're bringing into this. It's not just like, I'm just starting out and I don't have a ton of money. I think you could probably also just help relieve stress in a relationship because one of my next questions was going to be about how money is just one of the number one causes of divorce or just relationship problems for non-married couples.

55:03You've already talked about all these big things. So if you already have that, like you said, you're bringing up all these things. You already have those settled, set aside, you've agreed. Now, you're going into the relationship completely open and you don't really have to stress about money and you can worry about all the other things that matter. You can. Now, will there be money fights and moments? Of course. I literally wrote a book on how to handle money conversations. That does not absolve me from getting into the occasional tiff with my husband about how we handle money, how relate to money.

55:31But I agree so much. To me, a big value of the prenup is getting it all out in the open. You have had the hard conversations. No matter how logical and practical both of you are, I also want to set the expectation that there will be fights coming out of a prenup discussion, partly because it gets emotional. As logical as you are, it gets emotional. You are asking questions that sometimes feel like this way out there hypothetical scenario, but you're required to think them through in the case of a prenup. For instance, if you were to inherit some money from a family member, no matter how modest, and that money is used as a down payment on a home when you're married, do you each have equal right to that home or do you have more right to that home because it was your inheritance that was the down payment to buy that property, but when you were married?

56:16You have sometimes to go down these very hypothetical wormholes where then you start to get defensive and territorial about things that might not ever be an issue, but that's not dissimilar to the actual process of getting married, that you will have fights about things that are not necessarily a red flag about your relationship. It's just truly this heightened emotional experience. And you fight about these stupid things that really at the end of the day, it's just that my family feels this way and your family feels this way. And it's not so much us getting mad at each other. It's us defending certain family ways of doing things and getting territorial.

56:51The best piece of marriage, well, not marriage, but wedding advice I got from a friend was, you're going to have stupid fights that are just stupid. They're not about your relationship. They're just stupid wedding fights that outside the wedding vacuum do not matter. Now, there can be other underlying issues that you're fighting about that are worth addressing, but sometimes it's just a stupid fight. Robert Leonard outside of just a prenup, how do we manage that dynamic of managing everyday money with a partner when it comes to just everyday money things? If you have different value sets, like we talked about with the friends, or just one partner overspends, your wife is spending too much money on shoes, or I'm spending too much money on dirt bike parts.

57:33How do we manage this dynamic? The value sets is so important. The odds of you both being 100 % aligned on your value sets and your relationships with money are very slim. There's going to be some points of friction that exist in the marriage dynamic. And also because you change, you might have an interest that starts to manifest 15 years from now that you didn't have when you got married that requires money that all of a sudden your partner might be like, I don't want to spend that kind of money on you having this particular gym membership to train for a triathlon. Things happen. So first of all, you need to talk about what method of managing money makes the most sense for you as a couple.

58:11I think so often people default to like joint, totally joint. That's how we should handle money. That's how married people handle money. That means we love and trust each other. This is what we have to do. This is what my parents did. This is what we're doing. Listen, for some people, that makes a lot of sense. That's how they're going to handle their money. Or maybe it's second marriage for both parties. Totally separate is what makes us feel good. This is how we want to handle it. Maybe it's first marriage. And you're still like, listen, I want to be totally separate. You pay for this. I pay for this.

58:38This is how we're handling it. My personal favorite in the strategy we use is a hybrid method. We set our financial goals together as a married couple, as a team. Our financial goals get prioritized. So bill payments and what we're saving and investing for in the future. We put most of our money into one joint thing. Then that goes into the savings, into the investments, to pay the bills. But then we each have our own checking account in just our own name where we put our, I hate to say this word, allowance. I need to find a better branding term for it. Fund money, blow money, discretionary spending money.

59:13There's a bunch of different terms, but we each get a chunk of change every month that we can spend however we want. We can save it. We can spend it all. It's also in a checking account with just our name on it. So the other person is not nitpicking at how that money is being spent. I do feel like it is important, especially if you get married a little bit older, to be allowed some level of autonomy in some of your spending decisions. So that would be your dirt bike money. Or if you're married to somebody who likes shoes, that's their shoe money. My husband's really into shoes, so that's his shoe money.

59:46He wants a pair of Jordans, it's coming out of the allowance money. The other big thing to consider when you're getting into a money fight, it's going to happen. I love the idea of using your goals as a couple as the compass of those fights. Coming back to the idea of your goals, do they still fit right? Is this what we're prioritizing? And if so, whatever we're fighting about, how does that fall into place with these still being our main points of interest? And using that to kind of come together on a common ground and then have the discussion. We talked about it briefly, briefly earlier, you mentioned it.

1:00:23There are times when one person in a relationship brings significantly more debt to the relationship than the other person does. It could be student loan debt, could be credit cards, maybe even just a car loan. How do we manage this situation? It needs to be a conversation before you get married, first of all. And speaking from experience, I came into the marriage debt-free. My husband came in with a little over$50 ,000 of student loan debt. And I had known about this. We've been together for eight years and three days when we got married. So I had known about it for like seven years and nothing was a surprise.

1:00:59The amount wasn't a surprise, none of it. A lot of it though, was conversations leading up to how do we want to handle this as a married couple? He manifested what I would call ownership mentality in the beginning, years before we were even engaged when we would talk about it. He felt very much like, this is my burden. I'm bringing this in. I'm going to handle it. My husband is a public school teacher. Like your salary alone is not going to absolve us of this debt on a quick timeline. I want to pay it off quick. So what can we do that feels good to both of us so that it's getting paid off on more of a rapid clip, but you don't feel like I'm just swooping in to like save the day and paying them all off.

1:01:40We had a lot of different iterations, but as we got closer to being married. And then actually, as we got married, one of the shifts that I made is I changed my language. I said, our student loan when I would refer to it as opposed to yours. So that was one thing that to me was a way to show to him, I think about this as a team thing. It is technically just your name on it because I did not co-sign on it. Yes. But to me, this is something that we are dealing with together because we are now a team working towards paying this off so that we can now pursue also other goals. Mind you, we were still investing and saving for other things.

1:02:15We did not exclusively focus on the student loans. I think that you should be balancing that in with investing and saving for other things. So that's one of the ways that we handled it. The other thing is I feel like so many people get weirded out with, my partner has debt. I don't. Especially, I'm very debt averse. So I hear you. I see you. You're my people. But is it a red flag if your partner has debt? Not necessarily. Where did the debt come from? How long has the debt existed? Are they paying it off? If the debt is student loans, That is what it is. Let's be honest, not everybody is in a privileged situation to have school paid for either through scholarships or family or what have you.

1:02:50If it's credit card debt, how did that exist? Was there a medical issue that came up a couple of years ago and they had to pay for it on a credit card because that's the only way they could pay? Was there an auto accident that they had to finance on a credit card? Something just happened and it got on a credit card. Maybe they used to have a shopping addiction and they're now handling it and there's a debt payoff plan and everything looks good now. So those are all, hey, it's in the past. We're dealing with the present. We're paying it off. That to me is not a big red flag. If they're consistently putting themselves in debt, and there's no plan to get out of it, and every conversation you have with them to try to get them to take it seriously fails, that's when it's a, do you want to deal with this for the rest of your life conversation?

1:03:32That last piece is exactly what I was going to say is how they came into the debt is definitely important and something that needs to be considered. But the other very important piece of it is how are they thinking about it now? Do they think it's an issue? Are they trying to get better? Is it a focus for them and they want to get better and improve on this? Or is it something that they don't see as a problem and they're just going to continue doing it? And if it's the latter, then like you said, you need to decide if that's going to be right for you in the long term. And also be really honest with how hard it is if you're constantly fighting about money.

1:04:03And even if you got married, what is the longevity of that marriage? is something that is such a huge part of your life is a constant battle with your partner. We talked earlier quite a bit about us dealing with our parents, but now I want to talk about one of the last relationships that I think is important to have money conversations about, and that's with us flipping it, with us as parents. A lot of people listening to the show are millennials, probably don't have kids yet, but may in the future. Some might have young kids if they're a little bit older millennials. How can we prepare to have conversations with kids as they grow up so that money isn't a taboo subject in our house?

1:04:41Well, speaking openly about it, but also in a way that doesn't lead to what would be called financial enmeshment, where you are projecting financial stress onto your child, where you're telling them too much information, especially depending on their age. It's really important that you think reasonably about what they should know. If mom or dad loses a job, should they know? Yeah, they should. But should you say, I'm not sure we can pay the mortgage next month? No. What you can say is, mom lost her job. So we just want to be really careful about how we're spending money. And one of the ways that you can help us right now is anytime you leave a room, turn the lights off.

1:05:21It helps make sure we keep our electricity bill where it should be. and that is one way that you can help with us right now. So something like that, where like the kid understands that something is going on, but you're not making it a stress factor and you're giving them something actionable that they can do to help. The bigger thing too to recognize, you can say all the nice things about how to handle money, but what are you demonstrating to your children? Are the two of you fighting about money in front of them? Are you fighting behind closed doors and they can still probably hear you? Is it clearly a point of stress?

1:05:52Do you say things to them like, we can't afford that. Even if it's true, that's probably not the most helpful language to use. Instead, talking about, well, right now that actually doesn't make sense because we're prioritizing X, Y, Z. Another example, I once wrote an article about ways to talk about kids at different ages. And I loved this example, a woman from her childhood, she now like researches how to talk to kids about money. But when she was a kid, her dad brought home in cash, how much money he made in a month. So he had it in cash and put it on the table and then physically put the amount that goes towards the house into one pile, how much they pay for food in another pile, and did all these little piles down to the end that was sort of the indulgences pile and just visually demonstrated to his children, this is how much we have when you want to go out to dinner, when you want a new pair of shoes that aren't necessary or what have you.

1:06:46And it was a way for them to like visually understand, okay, even though I feel like they have all of the money, this is how much we actually have for the like, quote unquote, fun things. And that's another idea. But at the end of the day, the important thing is modeling healthy financial behaviors and talking about money in a healthy way. So as not to pass on stress, not pass on perhaps negative financial scripts that you inherited from your parents. And ultimately, and I hate to say it this way, you're going to screw them up somehow. You're not going to be flawless in this. All of us are going to mess up our kids in our own special, unique way.

1:07:20But you just hope that maybe whatever inherited financial trauma you have, that you can course correct. And you can maybe minimize what gets passed on to the next generation. But it's also okay that you're not flawless at this. We're all going to mess up sometimes. Aaron, thanks so much for joining me again on the show. We haven't had a conversation like this for an episode yet. I know I really, really enjoyed it. I can't wait to hear what the audience thinks. Where can everyone listening go to learn more about you and what you're working on? Well, you can find me on Instagram at Broke Millennial blog, on Twitter at Broke Millennial.

1:07:57The website is brokemillennial.com. All of the books are available wherever books are sold, but the most recent one that's all about this stuff is Broke Millennial Talks Money, Script Stories and Advice to Navigate Awkward Financial Conversations. I will put in a plug to please consider supporting your local bookstore. And if right now you don't have the money in your budget for the book, consider checking your library. I will put a link to all of Erin's resources and her new book in the show notes below. I know I'll be picking up a copy to read through. Erin, thanks so much. Thank you for having me.

1:08:31All right, guys. That's all I had for this week's episode of Millennial Investing. I'll see you again next week. Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor's Podcast Network. Every Wednesday, we teach you about Bitcoin. And every Saturday, we study billionaires and the financial markets. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor's Podcast Network. Written permission must be granted before syndication or rebroadcasting.