Adding a partner to budgeting adds a layer of complexity in itself – now you have another person’s money beliefs, needs, goals and habits to consider when you go about managing your money. As money is still such a taboo subject for so many people, discussing it can be awkward and challenging for many couples, but avoiding it will have worse consequences.
This is especially true for multicultural couples (each person has a different nationality, culture, heritage or language) where past money beliefs and stories can be vastly different, and the way each partner approaches all things money can vary from slightly contrasting to dichotomous. It’s worth discussing money at length before even considering engagement. But whether you are a couple of dates in or a decade into marriage, the following tips can help you align your budget for a financially fruitful partnership.
1. What are your cultural expectations of money?
There’s a reason this tip is first for multicultural couples. Cultural expectations can vary massively around money – some cultures are required to take care of aging parents, others to provide for children long into adulthood, some to pay for weddings of children, others to donate regularly to the community or religious institution. Some expect one partner to provide financially while the other has full responsibility for the household, and others have a more even split when it comes to generating income and looking after the home and children.
It is imperative to discuss cultural expectations and where you and your partner stand in relation to these assumptions. If one or both of you are not willing to adhere to cultural customs, will that require a conversation with family? It may well mean that other people may be involved, even if it is just informing them of your intentions as a couple.
However, it might become evident that one or both of you wish to follow cultural conventions. If that’s the case, your finances and lives will certainly be affected, and you must either accept, compromise or decide you don’t wish to pursue the relationship. That is extremely personal and for each couple to discuss and decide themselves.
The same can be said for money stories – different cultures may be educated in different ways – for example, some may be frugal and thrifty, saving money and investing in land and property. Others may lavish generously on their friends or be expected to provide for the wider family, and therefore not save for themselves. Different people may not be educated by their families and expected to deal with all financial matters as individuals or within their own marriages.
Here is what I suggest: talk openly about each person’s money stories and cultural expectations then create your own version as a couple and family. Discussing it openly might be hard as one or both of you might bring to consciousness deeply embedded and rooted beliefs and expectations that you weren’t even fully aware of. However, this is not a situation where ignorance is bliss. The money stories will surface and manifest eventually and rather you discuss it calmly before your partner sets up a standing order to pay their parents half your income every month.
Once you are both knowledgeable about where the other one stands, come to an agreement about how cultural expectations and stories will play out in your marriage. This could cover costs related to celebrations (Christmas, Eid etc.), children, wider family, everyday living costs, essentially everything that you spend money on! It is likely to span many conversations and meetings, so I would start with basic cultural expectations: celebrations, children, wider family and any other large financial expectation.
2. Get on the same goals page
It’s important for all life partners to talk about long term goals, and essential for multicultural couples, as these might be inherently different based on cultural money assumptions. Something like where you want to retire could be a long-drawn out series of conversations, especially if you meet as expats and neither of you lives in your ‘home’ country.
You could start by talking about your ideal life looks like – what you are doing, where you are, who you are with. See how aligned both of your visions are and work towards a harmonious picture – something you forge together and work towards as a team (it may involve compromise on both of your parts).
Once you’ve decided on the life you both want to lead together, work out how much it costs, and from there you can lay some concrete plans. If your vision and long-term goals are aligned, it’s less likely that you’ll experience conflict in the short term.
Consider different circumstances and eventualities that may confront you, such as aging parents, job loss, health issues, unexpected inheritance, and how you would deal with them. You don’t need a step by step, to the dollar plan, but a general strategy can help keep major conflicts at bay as you face various life challenges. Of course, people change, and life goals may alter, so it’s important to talk about them regularly, how you both feel, what, if anything, needs adjusting.
3. Global Debts and assets
When you first combine finances, it is essential to pool all assets globally – it might be that one or both of you have property or investments in your respective countries or just that you acquired before you met. It would be wise to have an open discussion about those assets (or debts) – who are they intended for and what is the purpose of them? Will they be considered joint or separate? Are they intended to be passed to children or to fund retirement or something else entirely?
If one of you has a large amount of debt and the other has assets, this will need to be openly discussed to avoid resentment. You must decide on a debt payoff strategy – will the individual who accrued the debt be solely responsible for paying it? Or will you tackle it together? Be aware that in some countries, when you are married, you are responsible for the other person’s debt in the eyes of the law.
Before you choose a spouse, it would be useful to know your own non-negotiable limits as an individual. Consider whether, if you have spent time, money and energy building an investment portfolio, you would be willing to spend the rest of your life with someone who spends without limits. Your story could be very different – if you want to enjoy the now and spend most of your money, decide whether an extremely frugal, thrifty partner will suit you best. If you know your own wants, needs and limits well, discussions you have with others will become much easier.
Even if you are married and reading this and haven’t gone through this process, you can still have an open discussion about it, and try to come to a middle ground or compromise if your non-negotiables are different. The only other option is to part ways, and if you don’t want that, both of you may have to adjust your expectations.
4. Have regular money meetings
This tip works for any and all couples! The more you acknowledge the important role money plays in all aspects of your life and agree to regular, open, and frank money talks, the easier it will become and the closer you may find yourself becoming. To make it fun, you could schedule your money meeting at your favourite restaurant or spa. It is best to have it when you will be undisturbed and neither person is distracted by work or phones or other obligations, so that you can fully focus on the conversation.
For a more enjoyable conversation, quickly review the numbers, and spend most of your time discussing your values and dreams and how you are going to make it happen. Let’s say you both dream of going on safari in Africa, if you talk about this and generate ideas and motivations to jointly work towards this, the conversation will be much more productive, enjoyable and feel like a team effort.
The worst possible thing to do is meet up and shame each other for money habits or purchases that the other one doesn’t agree with. It is imperative to allow each other space to voice opinions and thoughts without being judged but work towards a place when it is possible to call each other out on blind spots (hint: this takes a lot of time and maturity, and I wouldn’t expect this straight away!). After all, money is emotional energy much more so than numbers!
If you feel that you just can’t keep these conversations civil, it might be worth having a mediator in the form of a certified professional planner, financial coach or even a therapist – any objective third party (so a family member or friend might not be the best option). This might be especially useful if you are new to discussing money; for some people, it is a topic that is best swept under the carpet and never discussed and can bring up childhood trauma. Try to keep this in mind as you venture these topics with your partner – you don’t know what is behind their impulse spending or extreme frugality. The more empathetic and understanding you can be, the more likely that they will share their thoughts and feelings with you.
5. Set rules and routines
Having rules or guidelines can help tremendously in financial decision making. For example, you may decide that for any purchase more than $200, you have to consult the other person, discuss, and decide together. This way, you aren’t recording and telling them about every coffee you purchase, but for items that may alter the monthly budget more dramatically, you are giving them the respect of weighing in on the decision. You could also consciously and explicitly agree to remain open and honest and voice and concerns or resentments you may be harbouring. Whatever you decide, it should suit your lifestyle and relationship.
Routines also really help – if the same things are happening month after month, there is less room for conflict. This is where establishing a budget and sinking funds helps. Decide what large expenses are likely to come up in the next 12 months, such as education fees or car service, and set up a savings account for these sinking funds. Each of you could transfer a set amount every month into the account to pay for these expenses stress-free.
You could also have the same person each month responsible for paying certain bills, for example, if one person buys the groceries, the other pays the internet and water bill. It’s up to you to establish the routines, but if you do set it up fairly and openly from the start, bills won’t be forgotten as ‘I thought you were paying that’ or other unexpected scenarios.
It might be worth writing a money plan down that you both agree on (and you could even sign). You could lay out both partner’s needs, wants and non-negotiables, describe how you will manage the household budget and investments or debt payoff, as well as what action to take in the event of an unforeseen emergency or a windfall.
This will be a great document to have if, for example, one of you is at home taking the lion’s share of the housework and childcare and the other person is working, and the working partner receives a bonus. If each partner disagrees on what to do with the money, you can fall back on your money agreement to help guide you. Otherwise, who’s to say that one person wouldn’t want to buy a motorbike and the other person wouldn’t want to invest it all in VWRA! Financial decisions are not only challenging when it comes to debt and hardship, but also for income increases, bonuses and windfalls. Either way, you have to see yourselves as partners in a team effort, no matter which partner’s bank account the money actually lands in (or leaves!).
6. Where in the world?
For expat couples, you have the added complexity of different countries to mix it up (as if dealing with money and people isn’t complicated enough!). You made a big decision to leave your home country to work and live abroad, and you must establish both people’s expectations and goals for the future in terms of place.
Of course, it may change depending on the circumstances, and you might decide that if one or both of you received an awesome job offer, you would be willing to move to another country. What do your finances look like in that case? Could you come up with a list of expectations you have? It isn’t just about a great package – will the lifestyle suit both of you? Should you consider the cost of living before making a move? It might be that these decisions are easy, but it might take time to hash out the details – weigh up the costs of moving, the cost of living in relation to the package and benefits and how much you both want the move.
A big question for expats and especially multicultural couples is when it comes down to purchasing property. You have to decide whether you purchase in one or both of your home countries or the country you are living in, somewhere else entirely, or not at all. You could discuss where you are planning on ‘ending up’ to govern the decision, plus which has the best housing market, returns etc.
Ultimately, it is a very personal decision and one well worth contemplating before you get too serious. You might not be in the position to purchase currently, but could it be an option in the future? If so, how much do you want to set aside per month to buy the property? Ideally, you both should be in agreement and on board with property and places!
The same is true although not so much when investing in the stock market. Some people prefer a home bias, others would rather have a globally diversified portfolio. Consider the location of your brokerage and accounts in relation to where you currently live and where you want to live. You may have to factor in tax burdens related to your nationalities (for advice on tax, please make an appointment to see a specialist). For example, people with Irish citizenship may be liable to pay more tax if they purchase ETFs domiciled in Ireland.
All of this section is more ideas for consideration and discussion than solutions, as each couple’s situation will be so unique that it is impossible to tell you exactly what to do, but definitely weigh up where you want to live, where (if anywhere) you want to purchase property and how you want to go about investing in the stock market.
7. Wealth protection and planning
The final tip is regarding protecting your wealth. Many people don’t feel it necessary to discuss these issues as they plan to live ‘temporarily’ as expats so don’t expect anything to happen to them while they are living abroad. However, it is important to protect the assets you build together, especially if you have children or others you wish to pass it to. If the pandemic has taught us anything, it is that we can’t predict the future and while we should hope for the best, we should plan for the worst.
This is an area in which professional guidance and support is crucial, but nonetheless, I will stress the importance of addressing it. You may need wills in different countries to account for various assets. I know for my UK will, I have outlined our situation and named all our assets in different countries plus the intended beneficiaries. Even though the will does not have jurisdiction in other countries, it gives guidance to my executors as to the location and nature of any assets.
My top tip on this would be to keep your finances as simple as possible from the start – the less complexity you have to deal with, the less stress you have to deal with, and other people have to clear up when you’re gone.
Guardianship of children is also a key area to set up – who will take care of your children should the worst come to pass for you and your partner? Make them aware and set up guardianship in your place of residence and country which the children will reside upon your death, should it be different to the place you currently live.
I hope these tips have helped provide you with a structure for dealing with your finances as a multicultural expat couple. For any couple, these tips will help, but being an expat and married to someone with a different cultural background can add layered complexity to the situation.
The most important takeaways from this are to know yourself, your wants, desires and limits, and get to know your partner’s money stories, expectations, wants and desires and limits too. If you develop the ability to talk openly and honestly with each other, compromise while setting your own boundaries and plan together, you’re on the path to a harmonious partnership.
