The Role of Finances in Partnerships

Finances are typically a big deal to most people that partake in our current financial system. The topic can carry a lot of fear based association for an individual especially if the individual holds a perspective of limited resources; in short, there can be a lot of baggage regarding the topic. Typically these associations will present themselves when the individual feels threatened with their ability to provide for themselves, or their loved ones. It's no secret that many partnerships, including marriages, end due to the reason of finances. Even in a healthy relationship the topic of finances will occur at some point. If the issue hasn't been presented or brought up yet, count on that it will be.

Jackie and I recently had an experience in which we developed a process that we wanted to share. Our goal is to help people in partnerships make shared financial decisions through an authentic communication process. This process might also be able to help partners make a financial decision where one person in the relationship may not see the merit or value of the purchase.

Anyone who knows me well, knows that I love buying, selling, and trading musical equipment. Recently I've been looking to upgrade some of the home studio equipment that we have. The equipment is used to write and produce our digital content, which includes music. Out of all of the equipment that was needed, one of the items that was purchased was an expensive guitar amplifier. In order to obtain this amplifier, I decided that I would sell some other equipment that I currently had. Within a few days, I stumbled across a fantastic deal for this particular amplifier and wanted to jump on it quickly. I recognized 2 options: I could wait to purchase the amplifier until after I had cash in hand from selling the other equipment, but risk the chance of the deal slipping through my fingers and potentially costing much more in the long run; or I could purchase the amplifier on credit and use the proceeds from the sale to payback the amount borrowed. The item that was being sold had a strong value in the market, and I knew it could be moved at a price that I was happy with before any interest was accrued. It's worth noting that we currently have 2 other guitar amplifiers.

I decided to share the ideas with Jackie. Initially Jackie didn't see the urgency in purchasing the amplifier immediately especially since there were other financial obligations that took precedence. Although purchasing the amplifier wasn't the issue, the issue was the timing of the purchase. I expressed to Jackie that my preference was to purchase the amplifier immediately to take advantage of the deal; however, I wanted her to feel comfortable with the purchase and wanted her blessing. I told her that even though my preference was known, I was content with either outcome and gave her the space to make her own decision. She then asked me if I could honestly sell the piece of equipment for the desired price and within the desired timeframe. To which the honest answer was "yes." Once we were in agreement, the amplifier was purchased and the other equipment was sold in 7 days which was well within the timeframe.

Because we had an honest discussion, we were able to move forward in a financial decision making process where both people felt comfortable and agreeable to the plan of action. This sparked the idea for the step-process that we created for implementation or use for others who might encounter similar situations.

Shared Decision Making Process:

1. Gather all information necessary to present to your partner.

2. Ask your partner when is a good time to discuss a potential financial decision.

3. Acknowledge beforehand and affirm that regardless of your preference on the decision, you will be content with either outcome in the shared decision-making process.

4. Discuss with your partner your ideas in their entirety with all supporting information deemed necessary to support your preferred decision.

5. Affirm out loud to your partner that you respect their perspective and input regarding this shared decision and will not force or coerce an outcome that is solely best for you.

6. Allow your partner some time (if necessary) to reflect on the discussion to form their own, independent decision.

7. Share perspectives and decide what decision is in the best interest of your partnership in the current state.

8. Let go of any resentment, ill-will, or undesirable emotional states directed at your partner for their decision if different than your preferred decision.

9. Consider approaching this process again in the near future if a compromise was not made to benefit both partners.

10. Recognize that any financial decision that impacts both partners requires a shared decision making process based in genuine honesty and respect for each other.

Here is the point: Be as honest and open as possible. Since Jackie and I both love and respect each other, and our own decision making process, it's easy for us to come to a mutual understanding. In the above example, if my honest answer was "no" then Jackie might not have wanted to move forward with my preferred plan and that is okay because I was content with any outcome. And likewise, if I honestly didn't think that I could have sold the equipment, I wouldn't have approached Jackie with this situation to begin with. Jackie ultimately agreed with the proposition because she trusts and respects my opinion with what is necessary for our business, and also because I was honest with her. Since I love and respect Jackie, I would never take advantage of her trust and willfully do anything that would put us in a financially stringent situation.

- Jason