Green and Frugal -- Book Review: Get Financially Naked

Here's another great post and book review from our friends at The Greenest Dollar...



Most of you have probably heard that money is the #1 reason why people get divorced. But, you might not know that over 70% of couples get divorced because of money issues. Either they don’t have enough of it, or a couple’s philosophy about money is completely different.

I just finished reading Get Financially Naked: How to Talk Money with Your Honey, and it’s a book that I think everyone, married or not, needs to read. Why?

Because it teaches us how to communicate with our partners about money.

The authors, Manisha Thakor and Sharon Kedar, both CFAs, make an excellent point in the introduction: if you’re willing to get naked with someone in a committed relationship, then you should be willing to get financially naked as well. This means openly discussing your income, what you owe, what your spending and saving habits are, and what your financial goals are.

Think about the consequences of not doing this.

• What if you’re an avid saver, but you’ve married someone who spends as if money’s going out of style? Every time you try and talk to them about it, the conversation quickly dissolves into a power struggle.

• What if you’re a shop-a-holic, but feel you have to hide your credit card statements so your partner won’t see how much you’re spending? Every time they confront you about it, you feel attacked. Instead of communicating, you withdraw or fight back.

• What if your partner seems like he or she has their financial house in order, but you’re too afraid to ask because you don’t want to seem like a “gold digger”. As a result, you stay in the dark.

• What if you want to ask about your partner’s finances, but can’t bring yourself to do it because you feel it’s just too intrusive? Again, the result is that you stay in the dark and don’t know where you stand, or what you’re getting into.

These situations are common, and they should be a warning flag that the relationship could be headed for trouble. The biggest hurdle for most people is the first step: starting an open, honest conversation with their partner about money. But, Get Financially Naked teaches us exactly how to do that.

The great thing about Get Financially Naked is that although it’s a financial book, it’s written in a very warm, conversational tone. This book reads like you’re sitting at your kitchen table with a trusted friend. The book is written mainly for women, but it’s by no means “for women only”.

I also loved this book because it was so empowering. With each chapter you start to feel stronger. Why? Because the authors give concrete, useful strategies for taking control of our finances, defining our dreams, and for talking to our partners about our financial goals.

The authors use the stories from real, everyday women to drive these points home. And some of them just make your heart hurt.

• Nicole is a stay at home mome who wants to spend some money to travel and broaden her kids’ horizons. But, she fights with her husband because he think it’s not a good use of their joint funds, and won’t allow it.

• Kit is an experienced family law professional whose day-trading spouse took the household’s hard earned savings and gambled it away-all while she watched, without the heart to tell him to stop. Now, at 60, she’s divorced and starting all over from financial ground zero.

• Anika is a newlywed who can’t stop fighting with her husband about money, something they never discussed when they were dating. When she asked him about funding and IRA for her, he accused her of thinking about leaving him.

These heartfelt stories are peppered throughout this book. But the good news is that this book can help stop these cycles from happening again and again. Get Financially Naked teaches us that money does not have to destroy a relationship. But we have to know how to communicate in order to grow together.

One of the sections I liked best was called “Are You Dating a Deadbeat?”

This was a great little list of red flags that could mean your partner is not financially compatible with you.

For instance…

• Does your partner avoid answering calls on his or her phone? It’s possible that bill collectors are calling.
  
• Does your partner ask you to co-sign or buy things in your name, promising to pay you back? Um…something smells fishy here…
  
• Does your partner have a large but sparsely furnished home or apartment? They could be living beyond their means.

There’s also an awesome questionnaire that helps you see if you’re financially compatible with your partner.
I wish I could go into everything this book covers. The authors did a great job covering issues that many of us don’t like talking about. For instance…

• What financial obligations do you have with your partner’s family (parents, kids from another marriage, etc.)
  
• What do you do if your partner doesn’t think you need to talk about your shared finances?
  
• How do you talk to your partner about retirement, and then create a sustainable, long-term plan together?
  
• If your boyfriend/girlfriend owns a home, and you’re moving in, should you pay for part of the mortgage and home improvements?

I don’t often say that a financial book is easy to read, but this one is. It has tons of sub-headings and bullet points, which makes relevant information really easy to find. And because of the authors’ warm writing style, and all the personal stories, you can easily see how much this information applies to you.

Have any of you read this one yet? If so, what did you think about it?