Contain Your Excitement
If you’re still hanging around here, then perhaps you’re mildly intrigued by the possibilities of FI or dare I say, even excited. If you’re feeling the urge to tell everyone you meet about this new found power of yours, then might I suggest you finish reading this post first. Although the title suggests this post is targeted to those who are in a relationship, I think some of the concepts might be useful for those who are single because they can be applied to other aspects of life. I’ll give you some of my own observations and personal experience on this with a bit of research in psychology thrown in. The main thing to remember is that any form of change takes time, especially if you’re talking about someone’s mindset. It is also about learning to accept the possibility that your partner might not want to pursue FI.
I am very fortunate…
The first victim to suffer your new found enthusiasm for this strange thing called FI is likely to be your partner. If you’re single, then it might be a close friend or a work colleague. I was extremely lucky to have a wife who totally get this and 100% on board without any need for convincing. She has always been careful with her money. She’s not as interested in the finer details such as asset allocation or tax legislation, but she still asks questions about how such things can help us achieve FI sooner. Once she saw what was possible with FI, for her to accept the how was easy.
I know from listening to and reading about other people’s experiences that this is not the norm and I feel extremely fortunate. Usually, there will be resistance. After all, you’re effectively saying to your partner that the way you’re spending money needs to change. They would automatically be on the defensive. They would be thinking that their living standards would change for the worse and that is something they did not sign up for when the two of you got together. Heck, they may even pretend to go along with it just to shut you up, but secretly still continue to spend at the same rate behind your back or tell little white lies about how much something cost.
One of my brothers is going through a similar experience where his wife is accustomed to a certain level of expenditure which their household budget cannot sustain in the long term. He has tried talking to her about their finances, showed her the bank statements and even introduced FI, but if anything, she has only put up more barriers. He has come to learn that this preaching approach will just not work for her, and I would guess it will be the same for most. I hate being preached at. In fact, if I’m not ready for change, then it doesn’t matter how rational an argument is, I won’t change. Try preaching to me and I will only go out of my way to find research to confirm my own flawed bias.
The Initial Approach
Temper your excitement and think about how you approach this with your partner. In my opinion, the first conversation should not even mention anything about finance or money. This will be difficult. I know I wanted to blurt our safe withdrawal rates, savings rates and index investing when I first discovered FI. Instead, talk about what you both want in life and what you each value. Spend time discussing and finding out what you both hope your lives will be like in the future. If you have children, try to picture in detail how you want them to grow up and the type of people they will become as adults. Notice I’m not talking about what they want to be (i.e. what job they want to do).
It’s so important to align your hopes and dreams. Equally important is to recognise where you differ. Just because there are differences does not mean it’s a bad thing. Mrs. CC, for example, cares about how she dresses whereas I am one of those guys who wear shorts and t-shirt all year round (even during the recent Spring snow). Learn where there can be compromises. Where there can’t be any compromises, accept it and focus on something else. Don’t let the differences be the reason preventing you moving forward together. This step could be a simple conversation, but it could be a number of conversations because it is actually the first time you’ve both thought about this. Don’t force it. Take your time. It could take months or in my brother’s case, years and still be a work in progress.
Be patient. People learn (or in most cases, don’t learn) how to use money from a very young age. Even bad habits take time to break. What we are talking about here is something much more than a habit. It is about changing someone’s mindset which they have formed throughout their lifetime on strong beliefs and convictions on how best for them to operate in this world. After all, they have survived this long, why risk changing things? For this reason, trying to change someone’s mind to become more positive towards FI will be difficult. Expect this and plan for it.
Explanatory Coherence Theory (the psychology bit)
Psychologists have studied the idea of changing someone’s mind for a long time. First of all, I’m not a psychologist so there is a good chance that I’m totally messing this up and completely misunderstood the research. In any case, here is my interpretation of a theory by Paul Thagard (1989) called the Explanatory Coherence Theory (ECT). It sees our beliefs as a network of consistent (coherent) concepts which determines how we interact with the world. When we are presented with information which is inconsistent with our beliefs and interferes with our network of concepts, the immediate reaction is to discount it. ECT states that to change someone’s mind, you must undermine the coherence of the things that they do believe and develop counter-arguments to the most significant sources of their belief, i.e. to slowly break down their network of concepts one by one until a new belief takes its place. According to the research, you will also need to provide information from multiple sources and of equal importance, to address any emotional attachment which might be causing them to hold on to their old beliefs.
To start with, ECT expects your argument to be ignored. However, over time, by following the above suggestions, the glue holding their network of concepts and forming their beliefs would erode and collapse. The process can be extremely slow for some but fast for others. It might take a long time but then all of a sudden they change their mind overnight. The theory suggests that it is not one piece of information which results in this drastic shift in mindset, but the combined pieces of information you have provided them over time. The length of time it takes is dependant on the strength of their network of concepts. The alternative position you are proposing is likely to take time for it to make sense in their mind even if it makes perfect logical sense in your own mind. Again, be patient.
Let’s run through an example of how ECT might work. Someone might believe that buying a new car using a loan is a good financial decision. Their network of concepts tell them that a new car means less risk of breaking down, lower cost of maintenance, comes with a warranty, allows them to spread the cost, it’s on a good deal, it gives them street cred to show (give the illusion?) to friends and family you’re “successful’ and most importantly it feels good with the dopamine hit. When they look around, they see everyone else buying a new car and advertisements showing them the promise of a new lifestyle a flashy car provides. This only serves to reinforce the existing network supporting their current beliefs. If you were to sit down and show them the maths to prove that this is not a financially sensible decision, this new piece of information would be inconsistent with their beliefs. This would make them uncomfortable so they would have two options to alleviate this cognitive discomfort: 1) decrease the strength of their current belief that buying a car on finance is a good thing (thereby slowly allowing a new belief to form); or 2) dismiss the value of your mathematical wizardry so that their current belief remains intact (continue to bury their head in the sand – the path of least resistance). Most will take option two until such a time that they come to accept that their current beliefs are no longer reliable, for example, facing a real threat of bankruptcy.
It might never be…
When I approached this subject with Mrs. CC at the very start, I had in the back of my mind that as unlikely as it may be, she might just not get it and won’t be interested. I think it is important to be prepared for the fact that no matter how much emotional energy you invest in hoping that your partner will be as excited as you are on your journey towards FI, it might never happen. Learning to continue to grow and be happy together after this realisation would be a very difficult task (I can only imagine. Getting Mrs. CC to watch Sci-Fi Movies with me and actually enjoy it is an impossible task!). I can only see four main options in such a scenario: 1) break up; 2) accept it, but live together not quite happy as you want to be; 3) accept it whilst learning to adapt and live an equally happy life; and 4) continue the internal struggle and the false belief that one day he/she might change and end up being disappointed. For me, I was mentally prepared for option 3.
The pursuit of early FI, especially if it is extreme will require changes to how someone has traditionally viewed money and consumption. Unless these difficult conversations occur prior to a relationship becoming serious, I personally feel it is unfair to suddenly drop this idea on someone you’ve been with for a while expecting them to embrace it.
No Quick Solution
This process is more than a “5 Step Plan” quick fix. Anyone who claims there is a quick fix is simply deluded or lying through a click-bait title to get hits on their site. My view is simply to continue to learn, focus on your own behaviour, try to communicate with your partner and over time, your partner would hopefully be interested enough to ask questions and join you on the journey. If you try to preach, nag or force FI onto them, it will only be counter-productive. Finally, don’t even try to convert friends and family. From my experience, it just doesn’t work. My younger brother has absolutely no interest in it whatsoever. By all means, signpost or give them an introduction. This alone worked on my younger sister. If you go at it hard, you risk being viewed as being judgemental. They will come to you when they are truly ready for a change.
Back to my older brother. Recently, his wife had wanted to get a new car on finance because it was a good deal. In all honesty, it wasn’t a bad deal. But at the end of the day, was it a need or a want? She surprised me by asking for my opinion whilst we had a family get-together at my place. My dad was in the room and said to her “look around, you know what he will say” (we live with relatively few things in our life, still more than we would like though). I said to her that if it was me, the question is not if you can afford, but what could the money be better used for? She replied, “it all adds up doesn’t it?”. I agreed. She then turned around to my brother and said, “let’s not get that new car”. To get this far, they have been married for at least 15 years and together longer than that. I think it might not have taken this long to get here if my brother had conversations about their values and goals sooner. Mrs. CC has suggested that perhaps she was just tempering her response to me because she knows what I’m like and that it is possible that the new car on finance is not really off the table. The optimist in me is hoping that’s not the case.
I’m sorry that I haven’t really given you an easy answer to winning over your partner. It is still possible to achieve FI without your partner’s support, but it is a hell of a job and bloody impossible if your partner continues to spend more than you earn as a family. Don’t give up and think about it this way: it is better for only one of you to have bad financial habits instead of the both of you. That’s ending with a bit of positivity for you.
So what does your partner think about FI? How long did it take for them to come onboard?
“What does explanatory coherence explain?” by Paul Thagard.
An extremely short description of explanatory coherence by Changing Minds.