Couples from different cultures face distinct financial challenges and opportunities when planning their lives together. This is especially true for the many interracial couples in the United States today, who must navigate the sometimes turbulent waters of having been raised in different cultural and financial environments. In this blog post, we offer 10 practical pieces of advice to help interracial couples on the first leg of their financial journey together.
Understanding Each Other’s Financial Backgrounds
- Open Communication
Open communication is the foundation of a successful financial plan. Finances can be a challenge for any couple, but they’re especially so when two very different people come together. In that light, interracial couples should talk about their financial histories. How did their families handle money? What personal experiences with finances do they have? And what cultural influences are part of their financial makeups? These questions can help interracial couples identify potential landmines and talk their way to better mutual understanding. - Discuss Financial Values
Cultures differ in their values around spending, saving, and investing. One partner may be from a culture that prioritizes saving for a future investment like a home. The other may be from a culture that emphasizes spending on travel and experiences in the present. As with all important conversations, discussing these different perspectives openly can help partners come to a better understanding and alignment around their collective financial goals.
Setting Joint Financial Goals - Create a Shared Vision
After both partners have a grasp of each other’s financial backgrounds and values, the next step is to create a shared financial vision. This vision isn’t just about the day-to-day and month-to-month stuff. It’s about what you both see in the long haul. Why is this even more important than talking about the kind of money stuff couples usually talk about? Because having a shared vision with your partner can really strengthen your overall partnership. And it gives you both some seriously good motivation to work together toward the common objectives you set for yourselves. - Prioritize Goals
Once a couple has established a shared vision, they must then laser in on their financial goals. This can mean making some hard decisions on what to even put on the goals list, never mind which to tackle first. (It’s usually a good idea to first goal set in the areas of saving and debt repayment if those are issues at hand.) For example, if one partner wants to save for a home while the other is hell-bent on paying off student loans, the couple might need to converse a bit more about finding a balance that works for both.
Budgeting as a Couple - Create a Joint Budget
Budgeting is a critical part of financial planning. It is something that couples need to do together. This is particularly true when it comes to even the most basic joint ventures. As a couple, you need to work together to create a joint budget that reflects not just your income but also your expenses, and far more importantly, your long-term financial goals.
This joint budget should account for both partners’ incomes, should parallel financial goals that both members of the couple are working toward, and should be (to put it quite frankly) a realistic depiction of both not just individual but also collective upcoming spending.
- Use Budgeting Tools
Many budgeting applications and tools exist that can assist couples in managing their financial lives. Using one of these apps can facilitate in both partners remaining informed and involved concerning the financial state of the couple. This app transparency can serve to promote trust and accountability in the couple’s relationship.
Managing Debt - Discuss Existing Debts
It is critical for couples to sit down and discuss their debts before merging any finances. This discussion must, of course, include any student loans, credit card debt, and all the other numerous financial obligations one might have. Not only is it vital to understand the other person’s debts, but it is equally important to understand the mentality and emotions tied to those unpaid bills. That knowledge can be highly beneficial in developing a plan to pay off those debts. - Create a Debt Repayment Plan
After couples have evaluated their financial obligations, they should develop a plan to reduce those obligations. The plan may involve working together to prioritize which debts to pay off first, with an emphasis on high-interest debts, or it may involve some sort of loan consolidation. In any case, the partnership should be focused on reducing the debt. Working together to accomplish this task will be good for the relationship and probably make both partners feel more financially stable.
Saving and Investing - Establish an Emergency Fund
A couples’ financial security can come from an emergency fund. This fund should contain three to six months’ worth of living expenses saved up and held in a separate account for the couple’s emergency needs. When well-stocked, this fund can give a couple peace of mind and can help them weather unexpected financial storms. - Start Investing Early
Long-term financial planning necessitates that one save and invest. For couples, this means that they should conscientiously take the steps needed to secure their financial future. That may mean starting with very small amounts of money in the investment world, but it is essential they do it. They should open up an investment account and explore their options. Stocks? Bonds? Real estate?
Navigating Cultural Differences - Respect Cultural Traditions
Different cultural traditions can influence the financial decisions of interracial couples. Of all the influences on couple finances, culture is one of the most powerful; it shapes a couple’s values, beliefs, and behavior about money. And when it comes to finances, respect and acknowledgment are key for interracial couples. One partner might have certain cultural expectations about spending for events like weddings, while the other has a completely different viewpoint and set of cultural norms. - Celebrate Diversity
Rather than seeing cultural differences as barriers, couples should honor their diverse backgrounds. That may include integrating traditions from both cultures into their financial practices. For example, many of the couples I’ve interviewed for this book save for a trip that allows them to experience and honor both partners’ heritage.
Seeking Professional Guidance - Consult a Financial Advisor
For couples who may feel swamped by monetary schemes, engaging a financial consultant can pay off. A pro can give them directives tailored to their special kind and can help them maneuver through the mazy passages of their exclusive fiscal story. When picking a consultant, partners should seek out the kind of person—here, the advisor—that seems to understand them, their unusual cultural backdrop, and the very particular set of goals with which they wish to hit the jackpot. - Attend Financial Workshops
Numerous entities conduct financial workshops specifically designed for couples. These workshops can present and furnish the couples with vital statistics and resources that can, in some instances, enable them to achieve a greater understanding of not only their joint financial situation but also of their individual financial paths and the intersection of those paths. Attending such workshops is also a chance to interact with other couples, some of whom might also share the experience of being in an interracial relationship.
Building a Financial Legacy - Discuss Future Generations
While two people are making plans for their financial future together, it’s crucial that they take the time to consider how exactly their monetary decisions will affect their offspring. When you sit down to hash out your financial plans, couples, for any number of reasons, tend to shy away from talking about supports and savings that are specifically meant for their future kids. And why not, when what you’re physically saving and investing in now is meant to also serve you and your partner in your time of need? But many couples, myself included, find that talking about supports and savings meant for just the future kids helps them better envision the financial future they’re building. - Create a Will and Estate Plan
To plan for the future also entails making a will and an estate plan. Couples should confer concerning their desires for asset distribution, custodianship for progeny, and other weighty matters. Having a thorough estate plan can stifle potential grievances, guarantee that both partners’ desires are honored, and tend to the peace of mind that comprehensive future planning ideally provides.
Conclusion
Planning for finances is a fundamental part of any partnership, and for interracial couples, it can be especially important. They share many of the same hurdles as other couples when it comes to money but may also face some distinct challenges that are tied to their shared and diverse cultural backgrounds. Couples who spend a lot of time talking about their hopes and dreams and why those are important to them are not just engaging in happy talk. They are building the kind of close communication and trust that makes the partnership work well for both people.