Do you have a person in your household in charge of the money?
That person who pays the bills and does the budgets so you don’t have to?
According to research from the Money and Pension Service (MAPS), 48% of people worry about money. So many people find it difficult to talk about money with their partners or family, and this can often lead to long-term issues.
If you’re one of those people, you probably also let the other person get on with it. You ignore it because ‘you’re not a numbers person’ or you just bury your head in the sand and assume it’ll be taken care of.
Sound like you?
Well in this episode I’m going to show you why it’s so important to talk about money with your family, and how it will lead to happier, and financially healthier lives.
Links & Resources:
READ THE FULL ARTICLE ON THE MONEY & PENSIONS SERVICE HERE
Highlights from this episode:
(01:48) My story from financial independence to bankruptcy
(06:14) It’s rare to talk openly about money
(10:33) How do you know who’s in charge?
(14:35) Maths is important
(18:26) The problem with lenders
(23:35) A client’s story
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Using Other People’s Money: How to invest in property 4th edition
Make More Money from Property: From investor thinking to a business mindset 2nd Edition
Property for the Next Generation: Securing your future in uncertain times 2nd Edition
The New Estate: Insights from the 22nd century
The Wealthy Retirement Plan: A revolutionary guide to living the rest of your in style
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Episode 002 Transcript – How Clear Are You About How Much Money is Coming into Your Household?
Welcome to Episode 2 of A Wealthy Life, where we talk all things wealthy, money, financial resilience, and of course, property investing, but not all in the one episode, usually. So, in this episode, I’m going to be picking up on the flip side of the topic of the last episode, which was called “Status, Work and Money.”
And I’m going to be asking you: how clear are you about how much money is coming into your household? I mentioned in the previous episode that MAPS, the Money and Pension Service, carried out research in 2020, where they questioned people about how they felt about money and whether they actually felt uncomfortable or comfortable about talking about money.
And one of the statistics really struck home for me. It said that 48% of people worry about money. Yes, they do. And that’s because they’re your partner and you’re not talking to them. I mean, it couldn’t have fallen neatly into my lap and my beliefs about how we behave as individuals and couples and families about money.
In the last episode, I think that my observations, if you like, my conversation, was really about the behaviour–mostly of men, but some women–as they shoulder the role of the financial provider. In this episode, the conversation is really based more on my personal experiences as being someone in a relationship that was on that other side, of not knowing about money, not being part of the money conversation. And that’s, that’s what I want to talk to you about.
My story from financial independence to bankruptcy
And we’re going to start back with my parents. So, my parents never discussed money in front of me or my sister. Well, both my parents worked. My mother was a great one for budgeting and planning in advance, but even as a child, probably even until I got married, I didn’t know whether we were well off or not.
I don’t think it was even on my radar. My parents owned our own home. We had two cars; my parents had one each to get to their respective work. I assume it might’ve been on a mortgage, maybe there were loans on the car. I literally had no idea. I don’t think I even knew the term mortgage until I was probably well into my late teens or early twenties.
Money or wealth was only evident in my family or in my consciousness, in that we travelled abroad every year. My dad was Italian, so every year we would go to Italy or to the then Yugoslavia–that’ll date me. And I was aware of the fact that none of my friends did; I didn’t know anybody who travelled abroad.
My mother budgeted for these holidays by buying a portion of what we needed in every weekly shop. So, a few extra toiletries, some clothes, some food, and it was all laid out in the spare bedroom, as my sister and I shared one bedroom. So, in the other bedroom on the bed were all our clothes lined out and all the extra tins of food and everything else that would carry us forward when we made our journey by car across Europe to our holidays.
And that had, I think, seeded in my mind the fact that there was such a thing as budgeting and that if you wanted something, you could plan for it and you could prepare for it. And as I said before, because we went on holiday and nobody else did, did that mean that we maybe have more money to do that? Oh, I don’t know, actually, that that might be a lie. I maybe still didn’t think of that as a money thing; maybe I’m just adding that on now. But I knew that we were different and I was aware of this concept of budgeting, but other than that completely ignorant about money.
“And so, what?” I hear you asking. Well, the issue only manifested itself when I moved in with my boyfriend, who was to later become my husband. When I first left home on my own, I just went into a natural flow, I think it was just pure natural instinct. And I was good at maths and I unconsciously copied my mum. So, I was able to cope living on my own.
I knew that every month I had rent to pay, I have bills to pay. I needed to put money in my car for petrol, and of course I needed to eat. And when my money came in, I had just allocated all the money to, if you like, the right pots or prepared for it or knew that I could only spend 50 pounds a month on non-rent, bills, petrol food items.
So, it was just, I think, an instinctive reaction to my upbringing, but nothing conscious, nothing planned. So, once I moved in with my boyfriend, that then became my husband, I think that natural behaviour overcame me again. And, I’m not sure why I did this, but I basically deferred to him. And I think that I thought my mum deferred to my dad. I don’t know why I thought that, but I deferred to my husband and I thought that he was managing the money. And it was pure ignorance.
And the consequences of that plagued me for all 10 years of our marriage and ended up with us having massive debts that led to bankruptcy, the repossession of our house, and eventually divorce. And primarily that was as a result of not talking about money. And this podcast is called, “How Clear Are You About the Money That’s Coming into Your Household?” because I want you to be aware of it. It’s the direct result of that experience and my confirmation of my belief, through thousands of conversations, that tell me that talking about money is so important.
It’s rare to talk openly about money
My belief is that the majority of family partnerships has one partner that is believed to be in charge of the family finances and another partner that is more than 60-70% of the time completely ignorant of the family circumstances. Now, I do meet and speak and work with plenty of couples where both partners are aware of the finances, but one of them will still lead.
My clients aren’t really just average; they’re already people that know that they want a wealthy life and know that they want more quality of life. They are a rarity, they’re different from the average family because they talk openly about money. And because one person will lead on the finances, there’s still someone in charge.
While both partners are aware of the money that’s coming in, the money that’s going out because they discuss this regularly. There isn’t that role that I spoke about in the previous episode of the “financial provider,” someone feeling that it is their duty to provide all the money. It’s not that. There’s not a financial provider, there is just someone who manages the household spreadsheet or crosses off the bank statements or checks the bank account, but they both still talk about it.
No one partner is the self-appointed provider of all the money, even though the other half still works. And that is the case in the majority of families, I speak to. So as a couple, as a family, my clients are either equally sharing that responsibility or they are talking about it in the family. So, it’s not the same challenge that comes when you take on this responsibility yourself, or you don’t talk about family.
And it’s this not talking about money in the family, it’s this financial provider role that I spoke about before, that leaves, the 50% in ignorance. So, one partner is ignorant, confused, stressed by the lack of information; whether they know it or don’t know it. So, they may actually be in a position where, because they don’t talk about money, they don’t think about money, and therefore they are spending money in a way that then actually causes the financial provider more stress because now they’ve got to provide more money and they can’t say to their other half, “please don’t keep spending money on X, Y, Z.” And it can be anything from shoes to make up to hair, to clothes, to going to football games or downloading stuff off the internet–whatever it is, it doesn’t really matter.
“Please don’t do that, darling, because we don’t have the money for it.” Those two bits of the conversation don’t happen. The other way is that the 50% that is struggling with not being clued up on the money situation is aware that there must be incomings and outgoings, but because they’re ignorant and don’t feel empowered to ask the question, they’re actually stressed, because they don’t know whether they can spend or not. So, they’re in a position where they’re holding back on their spending.
And this is where my uncorroborated research leads me to see this dichotomy between the “financial provider” and the “family nurturer,” frequently falling into the divide of male-female, although that’s not everyone’s experience. And in that, the second partner, the family nurturer typically–not the financial provider–is either completely ignorant of money causing stress back up the chain, or is aware that something’s going on and is feeling the stress. So, it’s a ridiculous situation. You’ve made yourself self-appointed provider that puts you under stress.
Your partner is either overspending–that puts you under more stress–or your partner is aware, but not clear on what they can be spending so they’re stressed. So, if you just talked about it—I hammered about that the last episode–then everything will be better. And the consequences of not doing this as long as you are taking care of the finances, that isn’t enough; it’s got to be more than that.
How do you know who’s in charge?
So let me ask you this, the big question. If you haven’t discussed money and you’ve assumed, as I did in my relationship, then how do you know who’s actually in charge? Because, of course it could be that there is no financial provider at all in your family and no one’s taking care of the finances and no one’s paying attention to the incoming and outgoing.
But also, if there is a financial provider in your family group, how do you even know if they are any good? And that’s where I fell down. I assumed that my partner was in charge of the finances and I assumed that they were good with money. And in actual fact, I think if we go back in time, I had more money maths awareness, more money skills, and I probably should have been aware of it.
So, it’s not a lack of math skills, because I had those, but actually in my family, it was about ego and shame that lived us to live a certain lifestyle. My partner wanted to show off and feel that other people judged us–and this is where the link with status came from–that we were doing well; and I was simply too ignorant or unconscious to engage in what was going on until finally my husband said one day, “we’re being repossessed.” And I was seven months’ pregnant at the time.
So, there are a couple of underlying problems here that make the whole situation worse. One is, as a nation, we’ve been typically brought up in the UK to think that money is a dirty word. As I said before, it’s somewhere from the Victorian age up to the 1950s, but it’s not polite to talk about money. And that would be laughable if it wasn’t such a threat to family stability.
If we look at the Americans, they’re seen as so brash. And of course, that’s just a pompous statement, but they don’t seem to have as many hang-ups about talking about money as we do over here. And so, there’s a cultural element that’s different in every country. And every country will view talking about money in a different way. That then filters through into our family upbringing, into our schools, into our communities. And that causes, if you like, a vein of a problem through everything that is going on already.
Maths is important
And then the second problem is maths. And, I don’t know anywhere that there is a link may between money and maths right down at school level. It certainly wasn’t my experience. And money is why you need to be good at maths. I’d love it if your children have experienced something different. And if they are, please get in touch and let me know, because that would be fascinating to look at.
But my experience was, there was no direct link between money and maths and why maths was important. You either got maths or you didn’t, and if you did well, great. And if you didn’t, that’s a problem. You’re scarred for life; you hated your maths lessons. You didn’t do well in maths. You probably then picked up a feeling that you were stupid. And that just has probably limited so much of what you’re capable of; that one label, if you like, that’s been given to you as a child.
And I’d like you to just drop that right now. Just kick that out. It’s nothing to do with being stupid or not, it’s to do with the way that you were taught. But more importantly, it’s about seeing the relevance. If you understood as a child that money was the same as maths, and if you learned to add up, you could add up money; and if you learned to take away, you could work out what you’d spent; and if you learned how to divide, you could work how your annual wage was going to appear on a monthly basis. If all of that had been explained to you, I guarantee more kids would be interested in money and maths. Well, they’d be more interested in money for sure, but they’d be more interested in maths than they are now.
So let me just ask you a question here. Do you monitor your family budget? And I bet if you hated math, you probably don’t. And maybe even if you liked maths, you probably don’t and you need to. Do you check, for example in the supermarket, those special offers; is it actually a good deal? If you hated maths? Probably not. And it’s so easy to calculate it these days. It’s not even maths, it’s just working in the calculator. Do you understand the implication of interest-bearing debt on purchases that you make when you use credit cards and you don’t clear them? Probably not.
Another–I do love a Google search because sometimes it picks up things that are interesting as sometimes useless facts–and I searched about money and maths. And Wikipedia brought up the International Maths Olympiad, which is an annual competition that countries from all over the world play maths and do maths quizzes. And I think actually that once I saw it, it resonated with a film that I’d watched; maybe even one of the Spider-Man films, I think they’re going off on a maths quiz thing or whatever.
The UK is in the top 20 countries that are best at math. Well, frankly, I should hope so. We supposed to be one of the first world countries, and if we’re not in the top for maths, then we really are in a problem. But that’s about how our top-performing maths whiz kids do compare to other countries; that’s not the reality of the general public. And that’s what we need to understand, that we need to be good at maths because maths is money. And there are trillions of Google searches that you can do that talk about talking about money. And the fact is that we just simply don’t do it enough.
And the adult that is left out of the conversation, either deliberately or through naivety, will either be stressed or causing you stress because of this unknown thing that just hangs around all the time. And therein lies the problem. So, do you come clean? If you’re the financial provider, do you come clean and involve your family and an open up, if you like, that whole basket of dirty washing and let them know what’s going on?
Or, if you’re listening and you’re the person that is aware that you’re not the financial provider, you’re not the one in charge of the maths; how do you then risk starting what could be an uncomfortable conversation? Whether you involve your partner or you start that uncomfortable conversation, you need to take that step because knowledge is power.
And I know Sir Francis Bacon said this back in 1597 or something, no doubt said before that, anyway: “knowledge is key here. If you know what’s going on, then you’re in a position to do something about it.” You’re empowered. And how can you even know if your partner is any good at managing the family finances If you don’t ask, if you don’t talk? How do you know if you as a family are even making enough money to cover the bills if you don’t ask, if you don’t talk, you don’t count it, you don’t check it?
The problem with lenders
And that leads to stress, either now or as the bills arrive. And whether you’re conscious of the stress or it’s keeping you up at night, well, it’s just mulling around in your unconscious. That’s not healthy and that can have an impact on you as a family, and ultimately have an impact on your relationship. I did not ask the questions I needed to ask. I went from being self-sufficient to nearly losing my child, as we were actually repossessed just within days of my pregnancy due date.
My first daughter was born into a family that was bankrupt, that was homeless. And yet we had all the outward trappings of money, and we’d had some great family holidays! You know, had Facebook been invented then you’d have looked back at our pictures and thought, “goodness, how could they be in that position?”
And I won’t say, “I don’t know,” because now with hindsight, I do know: I never asked about money. I never worked out–I never sat down and actually worked out–“were we spending too much?” And I can tell you for a fact, we were spending more than we earned, more than we could afford. And the alternative is that I could have spoken about money.
You could speak about money, you could then understand what you have, what you need. And you could then make a plan that managed your spending to a point where you could afford it. You wouldn’t need to be in debt.
Now there’s a whole sub line that goes on here and that there are some families that because of their circumstances–either because they’re on benefits or low-paid jobs or zero contract hours–they struggle. I understand that. Once my marriage broke up, and I’ll cover this in future episodes, I literally wrote down if I put 10 [pence] in a phone box–dating myself yet again.
But you know, I do understand what it’s like to have no money, and it is still possible to budget and [that’s judgy, sorry] not allow yourself be talked into taking out high-charging debt, that you could make different decisions and not be in that position. You know, when I see some of these loans that prey on people that are struggling financially, it’s criminal. It’s just criminal because they don’t understand the cost of the loan that they’re getting into. And no one’s helping them fix the problem. And taking out a loan to put a patch over your overspending habits isn’t solving it.
And this can happen whether you’re on low income or benefits. And it can equally happen if you have a lot of money; we were not poor by any means. We still spent more than we had and ended up repossessed and bankrupt. And people don’t get repossessed unless they can afford a house, cause that’s what’s repossessed. And you can’t afford a house unless the banks have proved that you can afford a property. So, we’ve met all of the other criteria, but nobody checked what we were spending.
Now you might have found this episode a little challenging, maybe even emotionally evocative. But my only purpose in any of my podcasts, videos or talks is to share the lessons that I’ve learned through my personal experience. I don’t feel school prepared me for the real world, and I know that this is challenging for you. I had a first-class honours, I had a master’s degree, and all that did was keep me in university and out of the real world earning money, understanding how money flows and using money as a tool to create a wealthy life, the life I want to live. And that’s what I want to share with you.
That’s what I want to help you to achieve, and not go down a path that ultimately leads to the breakup of relationships and everything else like that. So, even though this episode has been challenging, I still hope that you got some really personal insights into how you can talk about money more, how you can share the burden, how you can engage your partner; either because you’re the one that doesn’t know, or because you are the one that knows and needs to share. Because when you really want to create a wealthy life that you want to live, you have to understand how to fund it, and that takes the money conversation.
Now, as always, I’d love to hear your thoughts. Do email me questions; do, of course, check the show notes. I’m going to add back into this episode’s show notes the resource that I shared in the last episode, which is called “The Wealthy Resources Spreadsheet,” so that you can at least have a tool, or I can share with you a tool that you can use, to make your incoming and outgoings more conscious, so please check the show notes.
And again, what I really wanted to do with this episode is, I suppose, fertilize the three seeds that I planted in the last episode. To get you to work out what role you’re either consciously or unconsciously playing in the family financials. Are you the financial provider, shouldering the burden to yourself, or are you the family nurturer left in the dark? Or maybe not even aware that the lights are on. Or is your family a rare one, that do actually take part in money talks, that you all know and understand the family income demands and the limits to the family outgoings, and therefore you’re in a position to create a wealthy life for yourselves?
A client’s story
Just one more anecdote. I spoke with a young couple; the wife was home from work on maternity leave with their second son. And dad was so stressed because they’d come down to just one income coming into the house. And he reached out to me to talk about money. I could see he needed to offload, again, the self-imposed burden that he put on himself of being the family provider.
And once we had that conversation, we brought his partner in on the second call, and from a position of just not talking about money. Both partners were unbelievably stressed about their unclear financial position. I helped them create a family budget using the resource that I’m going to share with you in the show notes at the bottom, and they were able to identify that actually they earned enough money.
And enough money is a term that I’ll come back to in a future podcast. In fact, they even earned more than enough. So, they were in a position where they had enough money to cover all their bills and they had more than enough money to cover some of the extra, some of the little luxuries in life.
But the financial strategy that I spoke to them about enabled them to both easily monitor and manage their finances, but also feel empowered to have the conversations with one another. The wife who was on maternity leave didn’t feel like a second-hand citizen and they weren’t stressed. And with tiny ones in the house, you’re stressed enough through lack of sleep that you don’t need to be stressed about money as well.
Talk money. Overcome your upbringing, overcome your ego, overcome your ignorance, and just take back control of your finances. Because it’s the first step on a path to a truly wealthy life. And that’s really, I don’t know, that’s the Nirvana that we think is unobtainable, but actually it is so obtainable. It’s just, we’re being kept in the dark. We’re not being told that talking about money is the solution.
So, in the next episode, I’m going to ask you the question: what would you do if you didn’t have to work just to pay the bills? So, we’ve gone through thinking about your role in the family and how that links to finances, on getting you to talk more about money; I’ve given you the tools so that you can monitor your expenses. Now, let’s take a leap forward and go, “well, what would happen if you didn’t have to work to pay the bills?” And we can really start to plan to create the life that you want to live. So, that’s my wish for you.
Make sure that you subscribe, like, rate, review, share–everything that you possibly can to get these messages out to as many people as possible, please. And I’d like to really thank you again, as I always will, for taking your precious time to listen to A Wealthy Life. My name’s Vicki Wusche, and I hope that this episode has brought you some much needed “Whoosh” into your life.
You’ve been listening to Vicki Wusche – wealth strategist, author, and property investor. With a name like Wusche, spelt W-U-S-C-H-E, I’m easy to find on all the usual social media channels. Do come and connect. Been loving the podcast? Then join the listener Fan Club, where I will share extra insights and host webinars. Links to this and more of my story are both in the show notes and on my website: vickiwusche.com. See you on the next episode!