Welcome to The MapleMoney Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. I’m your host, Tom Drake, the founder of MapleMoney, where I’ve been writing about all things related to personal finance since 2009.
They say that conflict over finances is one of the leading causes of divorce today. But the problem isn’t the lack of finances, it’s because too often, married couples aren’t on the same page when it comes to their money. My guest this week knows a thing or two about overcoming financial stress in a relationship because he’s been there.
Talaat McNeely shares his personal story with us, including how a lack of transparency about his personal debt caused a rift early on in his marriage. In fact, in the early years, he and his wife made a number of money mistakes, some of which he details in our conversation. Thankfully, they learned how to play on the same team, and eventually paid off all of their debt, including their mortgage.
Today, through their award-winning podcast, The His & Her Money Show, Talaat and his wife help other couples build stronger marriages by teaching them how to win with money. This is a must-listen for anyone who’s in a relationship or plans to someday be married.
Our sponsor this week, Borrowell, wants all Canadians to feel great about their credit. To help, they’ve taken a product that was once over $20/month and made it completely free. Visit Borrowell today, for a copy of your free credit score, credit report, and monthly updates.
- A debt freedom story – Talaat & Tai McNeely
- Common money mistakes of married couples
- Winning with finances as a couple requires talking it out together
- Should couples share bank accounts?
- Why you should never build your lifestyle on two incomes
- You and your spouse should never stop dreaming together
Did you know that the conflict over finances is one of the leading causes of divorce today? Surprisingly though, the problem isn’t the lack of finances. It’s because couples aren’t on the same page when it comes to their money. My guest this week knows a thing or two about overcoming financial stress in a relationship because he’s been there. Talaat McNeely is the co-founder of His and Her Money. Together with his wife they help couples build stronger marriages by teaching them how to play on the same money team.
Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. Our sponsor, Borrowell, wants all Canadians to feel great about their credit. To help, they’ve taken a product that was once over $20 a month and made it a completely free. Visit maplemoney.com/borrowell today for a copy of your free credit score, credit report and monthly updates. Now, let’s chat with Talaat…
Tom: Hi Talaat. Welcome to the Maple Money Show.
Talaat: Hey Tom, super glad to be here. I’ve been a fan of your work for a long time so I’m glad to be a part.
Tom: Thank you. One of the things you and Tai are rather famous for is finances around couples so I kind of wanted to get into that with you and go through all the different and unique issues couples might face. First of all, just to set this up, can you go into the back-story of your relationship? I know you’ve had very different finances yourself.
Talaat: Yeah. So our story started at a very broken place. We had similar backgrounds and upbringings. Like you mentioned, we both grew up in middle class households, very frugal households. But we took two different responses to that type of upbringing. Tai fell right into alignment with it and learned how to be smart with money. She went to college totally debt-free. She got a degree in finance, worked in the finance industry, and had great credit and all that type of stuff. She took what she learned (when she saw her parents doing it) and applied it to her life. For me, when I saw my parents being frugal, cutting corners, couponing and things like that, I was totally turned off. I didn’t have any name brand stuff growing up. And I said, “When I get out on my own and have my own money I am going to have everything that’s name brand.” This was in the military at 17 right after I graduated from high school. I have money now and my own career. I was out the house and I went crazy. I spent money, and spent money, and spent money and ended up with a whole bunch of debt with nothing to show for it. It had nothing to do with college. There was no student loan debt. There was no mortgage or anything like that. This was all just dumb consumerism. I got myself in a pit. I didn’t know what I was doing. I didn’t have any financial literacy whatsoever so I just made mistake after mistake from payday loans to every type of loan. My whole life was financed. My car as well as a fancy sound system in the car was financed. The furniture in my apartment was financed. Everything was financed. Soon I got to a place where I was totally fed up and frustrated because here I am with a career where I get a deposit on the first and 15th of the month and by the 28th of every month it’s gone. I’m clueless and just fed up so I started to dig into how to do this money thing because, again, I had no instruction. I started reading books and articles and started to understand where I was making the mistakes. But I still made those mistakes so the debt was still on my back. It was at that point that Tai and I were in a relationship. Then we got engaged. We were literally months away from going down the aisle and becoming a husband a wife. But the problem was I had been hiding my debt, Tom. I didn’t tell her the truth. I was too afraid. I felt like she would judge me and wouldn’t want to be with me because she was this financial rock star and I was the complete opposite. So I hid it. Then I decided to figure out how to get rid of this debt on my own before the marriage. It didn’t work though because you can’t build a relationship on a lie. God just didn’t let it work out so I had to confess. And when I confessed literally weeks before the wedding, there was a moment where we were wondering if we were still going to get married. She was totally upset. Not about the money but about the fact that I was untruthful this whole time. We had known each other for years and I hid this from her. So we had to do a lot of prayer, a lot of talking and counseling. And we did get married and come together financially. We paid off all of my debt within the first year of our marriage. Later on we took it to another level and decided we loved this debt-freedom thing so much we were going pay off our house. So, in a five year period we paid off our home to the tune of over $330,000. That painful moment spurred us on to become eventually a debt-free family.
Tom: I’m glad that worked out. I guess when you drop something like that on your soon-to-be spouse, no matter what the topic, any surprise just weeks beforehand is probably a risky thing.
Talaat: Yeah, but in my mind, if I told her, I was going to lose her. I had just made up that conclusion in my mind and it was totally wrong. She was a teammate. Once we got through the pain of my deception and came through on the other side, she never said, “Okay, you go figure this out. You messed up so you figure it out.” She said, “This is what we’re going to do. This is going to be our plan and this is how we’re going to walk it out.”
Tom: Your spending story sounds similar to mine. I believe I’ve said on the show before that I spent most of my 20s spending (money). I had the car stereo as soon as I got my student loan. I think my total car stereo was probably worth more than the car but that’s just how it was in my early 20s. I spent money on hundreds of CDs and DVDs and even VHS tapes before that and it was just such a waste. So I was very similar. I could’ve been saving that money up. Thankfully, I didn’t go too far into debt. It was just that I was spending dollar-for-dollar. Everything I had was getting spent.
Talaat: Especially if you just don’t know. I think that’s the problem with the system. We aren’t taught that. If your mom and dad aren’t explicit with giving you personal finance instruction or at least give you some books to read, you have to go out there and figure it out. For some people it works out but for a lot of people, it does not. I think that’s why it’s important for shows like this to be in existence. That way you can consume content to help you make better decisions sooner, rather than later.
Tom: There are very few bloggers or podcasters that haven’t had some kind of finance issues. I don’t think that’s just about having a great story. I think it’s just that you kind of need to hit—maybe not rock bottom, but least have some adversity to really get into this.
Talaat: Hitting rock bottom taught us so many lessons that we now teach today. I hesitate to say, I wonder where I would be if I didn’t hit rock bottom like that. Would I just be mediocre with money? Or did going all the way to the bottom force me to dig in deep to understand how money works and the types of strategies that I should be implementing?
Tom: I’m a big fan of getting some financial literacy into high schools as long as the high school students will listen. Even when I was in college they were teaching me about compound interest and things like that, and I still wasn’t really listening. They were explaining to me right then and there how much better off I’d be if I started saving at 20 years old instead of 30, and it didn’t happen. I still spent. So I do like the idea of education but somehow it also has to sink in with kids who don’t necessarily want to talk about it.
Talaat: No, that’s real. I have a background in education. I was a high school teacher. It’s more like seeds—seeds you plant. Seeds that can be watered later on are a step in the right direction.
Tom: If it’s worked into a math class it’s going to make math a lot more interesting than that kid (like me) who put up his hand and said, “This isn’t going be useful to me at all.” At least if you’re talking about finances, you might keep their interest. Can we kind of go into some of the different money mistakes you’ve seen? If there’s a couple out there who are listening to this, what can they relate to? What money mistakes have you seen?
Talaat: I can tell you what we’ve done as a result of us coming together. After we got through the firestorm of my deception, we made a plan to get out of debt. But here’s the problem with our plan. It seemed like a good idea on the surface because I was just learning about money. But Tai knew about money. Not only did she study it in college, she was also working in the financial services industry. I said, “I don’t know what I’m doing so you handle the money and let me know what I can spend on my own and do my own thing with.” We went with that because she’s a financial rock star and I’m just a novice. We went along with that for a few months but the problem was, frustration was being built on both sides between me and her. And, we weren’t discussing our frustrations. Here’s why we were frustrated; I knew how much I made for a living. I knew what my salary was. I knew how much I got every two weeks. She would crunch numbers and say, “This is what you can spend on your own.” And it was a very small number, Tom. It was a very small number. And I was frustrated by that. I was a little resentful and not appreciative. I went to work every day and thought, “This is all I get?” And she was frustrated because none of this debt was hers and she was crunching numbers, organizing the money, trying to make sure that we had a plan to get rid of it and she felt unappreciated because of my complaining. What happened was we accidentally built a parent/child relationship because I was being handed an allowance without any knowledge of what was going on because I wasn’t involved in crunching numbers. I wasn’t seeing the plan. I was just receiving the little bit I could spend on myself and letting her figure out the rest. We were not operating as a team. She was doing all the work and I was doing all the complaining. When we hear the word team, especially in the context of relationships, we default to think that means we should be doing everything 50/50. But that’s not the case. Teams are not always 50/50. We’re from Chicago so I like to give the analogy from the 90s when it was all about the Chicago Bulls here, right? If I ask who Michael Jordan is, everybody is going to know he is the greatest of all time. And, by the way, that’s not up for discussion. Michael Jordan is the greatest player of all time. But then I’ll say, “Who knows BJ Armstrong?” and there will be crickets in the room. Who the heck is BJ Armstrong? Well, for the first few championships of their six, Michael Jordan was the shooting guard and BJ Armstrong was the point guard. Now, did defenses and opposing team’s game plan for Michael Jordan in the same way that they game planned for BJ Armstrong? Of course not. Michael Jordan got more of the attention because he was the star of the team. But BJ was on the court too. BJ had a part to play. BJ was the general. He had to distribute the ball, set up the plays, call the plays, and all that. My point is, when you are in a relationship it doesn’t mean (while operating the finances) that you are doing 50 percent of the work, each. Tai is still the number cruncher. She’s still the one that is super knowledgeable with organizational skills when it comes to money. She still sets everything up. But instead of me just being off to the side saying, “Go Tai, Go!” while waving a towel on the sidelines, I’m on the court with her. I’m looking at the numbers. I’m making suggestions. I’m asking questions. And then we both collectively say, “Okay, this is what we’re going to do. This is our game plan for the month.” It’s about having skin in the game. Both parties. We didn’t have that at first. If someone is listening with a spouse who is doing all the money work while the other is just on the sidelines doing nothing, that is a recipe for disaster whether a disaster has taken place yet or not. It’s going to. There’s probably some frustration being built up on the inside because you both have to have knowledge. You both have to have eyes. You both have to have insight on what the game plan is for your money.
Tom: Yes, that works everywhere. Even outside of finance. The idea of teamwork doesn’t mean 50/50. Different people have different skills and strengths and stuff. So yeah, I definitely like that. It sounds like a lot of what you’re saying about working together comes down to communication. Do you think that’s true?
Talaat: Yeah, it’s a huge part of winning with finances as a couple. You have to talk it out because if you don’t, again, you leave room for frustration to build up. I was intimidated. It was fear. The reality I was painting in my mind wasn’t actually real. She didn’t get pushed away. She actually wanted to come in and help once she knew the truth. So the picture that I was painting was a false picture because I wasn’t communicating. If I was communicating with her being honest and upfront saying, “I’m trying to figure this thing out now but there was a time in my life where I didn’t have it figured out and I blew it so this is the situation…” my timeline would have been moved up because we were engaged for two and a half years. In the middle of our engagement I was in the military and was sent overseas to combat. So there was a year added on to our previously arranged engagement which meant there was a lot of time to communicate properly, but I didn’t. Fast forward even to today, I still have ambitions that are different from hers, financially. She’s the quintessential saver. She’s the quintessential, “I need an emergency fund for the emergency fund,” type of person. I say, “Let’s go buy an apartment building like Grant Cardone. I want to go do some big time investments.” Neither one of us are wrong, we’re just different. And so we have to share our dreams, our hearts desires, our fears, our trepidations and use all that information to come up with a unified plan. But the only way to do that is to communicate transparently. Don’t just go with the flow or operate out of fear. Don’t be limited in sharing your fears or ambitions because I think if you suppress fears, ambitions or questions, it’s just going to lead to frustration. And you won’t be able to accomplish the things that you could have accomplished if you were willing to have those tough conversations. So, communication is absolutely essential.
Tom: One of the conversations that come up a lot when you start talking couples is should they have separate finances, separate bank accounts? I know my personal thoughts but I’ll let you answer first. What are your thoughts on that?
Talaat: We get in trouble a lot for this because what we thought was normal (I guess) is not very normal, but we just absolutely believe in all accounts being joint accounts. We don’t have—despite the name of our platform, we don’t have his and her money. All of our money is combined. We are a faith-based couple so we believe that the two shall become one. Now, let me back up. Tai has a bank account that’s strictly hers because within our budget we have spending the money that we each get. Does that make sense? And so she chooses to put her in a bank account because she’s the saver of the family. My name is on the account but I don’t go into that account because that’s her personal fund money. But we believe that all accounts should be together. You should be unified in every aspect. That doesn’t mean that you don’t have money you both discuss that you can have fun and spend on without the other person having to question. We do believe in that. But when it comes to our bank accounts, both of our names are on every single bank account. We just feel if we’re good enough to create children and share DNA, I’m pretty sure we can handle sharing bank accounts too.
Tom: I’m exactly the same, actually. Maybe there’s a question of how soon you’d do that? If you’re dating someone for two weeks maybe you don’t start then?
Talaat: We didn’t do it until we were husband and wife because anything can happen in a relationship. If you’re just dating or engaged maybe you can start moving in that direction. When we got engaged we had one joint account that was money for wedding expenses. We were putting money in there to go toward the wedding expenses and whatnot. Then, once we got married all of our accounts were merged together because we believed, why marry someone you don’t trust? Why come into it with distrust? If I said I wanted to spend rest of my life with someone I should be able to handle sharing our money.
Tom: I also just find it easier too. It would be odd to say, “Well, I need my half of the mortgage from you.”
Talaat: We’ve literally been on double-dates and group dates with other couples and they’re sitting there negotiating who’s paying for the meal. And I think, “Wow, what? Is that a thing?” I guess it is, but that’ll never be our case. That’ll never, ever be our case.
Tom: It got even further in that when we had our first child my wife didn’t go back to work. Then what do you do? You can’t say sorry you have no more money because you’re part of this team where she was putting in a lot of effort with our kid. I wouldn’t say, “It looks like you don’t have a job now so you don’t have any spending money.”
Talaat: That’s why you have to come into this thing as a team. Another example of that is, when we got married, for the first four or five years Tai made more than I did. She was in a situation where she had a salary plus commission. I just had a salary so there was nothing more I can do about that. She never once was lording that over me. It was always ours, ours, ours. When our second child was born my wife was the same way. She said, “I don’t want to do this anymore.” Now, if she was treating me terribly before then—lording it over me then I would have had my chance to say, “I’m the man, now.” Our hearts were never in that posture. I just think that if you come into with a team mentality, you’re going to go so much further.
Tom: I love it. One more thing I wanted to cover that’s similar to this is the idea of my wife taking time off with our kids. I know a book that you really like as is, The Two Income Trap.
Tom: That’s Elizabeth Warren and her daughter, is it?
Tom: Can you kind of pitch that book a little?
Talaat: This was way before she became a politician. She wrote this while she was a professor at Harvard. I don’t even know how we came across it but we’re so glad that we came across it because the two income trap is so real and many people fall for it. What the two income trap is, in its simplest form, is you have two spouses where both of them have incomes. They both have careers. What happens is they go and get a home based on both people being on the loan with both careers. They both go get car notes. And maybe they both came into the relationship with student loans each. Now they’re trapped because say at year seven of the relationship, a child is born. Then the mom doesn’t want to go back to work. She wants to spend the first few years at home or come home permanently to be a stay-at-home parent. But she can’t because the whole lifestyle you’ve built prior to this moment is dependent upon two incomes. Hence, the two income trap. You are trapped. What that book is teaching is, never build your life on two incomes. For us, we built it on my income. My income was the lower income. We said, “Let’s see what type of life we can build based on that.” And we did. We had a good life based on that. And when that time came it actually did play out for us. Because Tai was a career person through-and-through she said, “I’m always going to work. I love what I do.” Then it just switched. It just changed. There was no explanation for it. Suddenly she said, “No, I want to be home.” The switch just flipped for her. That’s not always the case for everybody but you do want to have flexibility. Maybe it’s not a situation where you want to be a stay-at-home parent but maybe you want to take your skills and create a business of your own. Maybe you want to create margin within your lifestyle so that if that day ever came, again, you’re not dependent on two incomes and you can be more risky and take this leap of faith. It just puts you in a more flexible position when you don’t build your lifestyle based on two incomes. Pick one of your incomes, build your lifestyle on that and use the other income (which is what we did) to get out of debt, build wealth, do investments, try different entrepreneurial ideas or travel—things like that. Just give your life more flexibility and don’t allow yourself to be stuck in a rut because everything in your life is dependent on two incomes. It’s a trap.
Tom: Yes. I think for the FIRE crowd (financial independence, retire early) it’s a lot easier as a couple to live on one income and save 50 percent. If you’re spending the way that you set it up there where you’ve combined everything and you’re spending it like two incomes, then you’re probably just saving 10 percent. And that’s fine. It’s a great start. But even if you don’t know what you want to do with that second income—if you’re not truly living off it, it seems that would get you ahead a lot quicker. With me, I did fall into this trap. I had never read this book so I found it interesting when I saw you guys were talking about it. That was totally it for us. We were both spenders. When we became combined we just became bigger spenders which made a lifestyle inflation thing where it was hard to kind of say, “Okay, you’re not going to work anymore.” That kind of caused some drama at the beginning.
Talaat: And even if you can’t do 50 percent, you don’t have to do 100 percent. Can you do 85 percent? Can you cut 15 percent out of your budget and live on 85 percent of your incomes and use that 15 percent to start some financial goals, ultimately trying to work your way back to the 50 percent. But if it can’t be 50 percent, don’t just automatically disqualify yourself. What can you do? What percentage can you get your situation at? There is some room there. If you take a hard look at your numbers and where your money is going, you can find some room to give yourself the margin and flexibility to live a life a little bit differently.
Tom: If you’re a couple kind of having these financial conflicts, how do you resolve them? Say someone just dropped that big surprise about their debt or they’re just kind of butting heads about spending versus saving. How would you suggest resolving these?
Talaat: When we talk with couples we always tell them to put the calculator, the pen and the pencil down and go out to dinner and just dream. Have what we call, a dream date. If you can’t go out because maybe you’ve got a kids situation, when the kids go to bed light a candle at the dining room table and dream. Put on some smooth jazz in the background or something. Then just go back and forth and say, “Five years from now, if there were no restrictions…” Almost as if you had it your way and there was nothing stopping you, what would life look like in your wildest dreams? Whoever is talking, the other spouse takes notes. Then vice versa. Don’t allow your spouse to think small. Don’t allow your spouse to be limited. Don’t let restrictions creep into the conversation. Reassure each other that it’s just dreaming. Don’t put any restrictions on yourself because what happens is, when we become adults, life really begins. We get a spouse, some kids and a career. We forget about those dreams we had at 17-years-old or 21-years-old when we were in college thinking about what was going to happen in your life. Sometimes we have to get out a shovel and dig that stuff back up because when you have an idea of what your dream life would be, you can look at that picture and compare it to your current reality and figure out how to get from here to there. You have to assure yourself that no matter what your dream is you can get to it. There’s no dream that’s impossible. You have this in your heart to do X, Y, and Z. Let’s do X, Y, and Z. In order for us to get there, now we can pick the calculator up. But not on the same night. That night is just for dreaming and dreaming only. But the next day or a couple of days later we can take that information, that dream we painted and have the harder conversation about the X’s and O’s—the strategy conversation around how to get there. But it first starts with the dream. What you’re going to have to do to get from the current reality to your dream life is going be hard work and a lot of sacrifice. In order to do such a thing, you need a big strong “why” or else you’ll give up and quit and you won’t get there. But if you take the time to identify your own personal “why” through the exercise of just allowing yourself and your spouse to dream—bringing those ambitions back up (that you used to have but life has buried) will allow you to have more strength and diligence to go do the hard work that’s necessary to get to your dream life.
Tom: Great advice. Can you let people know where they can find you online?
Talaat: Absolutely. Everything can be found at hisandhermoney.com. Every social media platform that exists, our handle is, @hisandhermoney. We also have a program geared for couples specifically, called Power Couples University. You can find out all the details of that program at powercouplesuniversity.com.
Tom: Great. Thanks for being on the show.
Talaat: Thanks for having me.
Thank you, Talaat, for sharing your personal story and showing us why it’s so important for couples to work together on their finances. You can find the show notes for this episode at maplemoney.com/talaatmcneely or head over to maplemoney.com/show to find all the past episodes. Last week I read a review of the show that was left on iTunes by a listener from the US. Here’s another recent review from a Canadian listener with the user name, FF2127… “I’ve been listening more and more to these episodes. I wanted to leave an awesome review to help out but found out I had already left five stars. I wish I could give six stars. The podcast has become one of my favorites. If you aren’t listening, you’re missing out. This is a solid podcast if you’re looking to learn about creating financial freedom, some basic info, some key points and some bits of savvy mixed in… A bit for everyone.” I love getting reviews like this and I use it to set the direction for the show. As a thank you, anyone who leaves a review on iTunes from now until the end of October will be entered into a draw to win a copy of the best-selling book, I Will Teach You To Be Rich, by Ramit Sethi. Qualifying is easy. Just head to iTunes and leave a review of the show. Then head over to maplemoney.com/review to enter with your username and the date you left the review. Reviews left before the end of October can qualify for the contest and past reviewers are welcome to join. Head over to maplemoney.com/review for instructions and to enter. Oh, one more thing… don’t forget to listen next week as Jeff Rose joins me to talk about how accelerated wealth building has worked for him and how you can put the same practices into place in your life.