Not sure how to broach the topic of finances with your partner? It’s a topic that is cause for much stress and constant arguments in many households all over the world. When you approach this subject, you need to be smart in order to avoid a disaster. If you’re getting serious with someone – just engaged or moving in together, for example – it’s incredibly important to start this discussion. If you’re already married and have avoided talking about money, it’s definitely time to face it head-on.
Nobody is perfect (or even close), so it’s important to approach this with an open mind and a non-judgmental attitude. Almost everyone has something they spend more on than most normally would, but it’s about balancing your spending – not telling your significant other they can’t spend money on things they like anymore.
There Are Some Key Points That Should Always Be Addressed
- Monthly expenses and how frequently you go over your budget (if ever)
- Long-term financial goals
- Short-term financial goals (keep them within 1-2 years at most and make them as concrete as possible)
- Current total debt and where it came from – the difference between home loans, student loans, and consumer debt is massive
- Current consistent income – focus on what you can reasonably expect to make, but feel free to include side hustles and businesses (just be willing to mention that those income streams may or may not be completely stable)
How Should I Approach The Conversation?
This might sound a little counter-productive, but try not stress the importance of this topic. Your significant other undoubtedly knows how important finances are, and further stress probably won’t make them feel better about having this discussion. It’s an important topic, but it’s best to approach it casually and calmly.
At the same time, don’t downplay this or lie about it either. This is something that does need to be addressed, and it’s certainly not something you’d want to have surprises about in your future. How would you feel if you got married to someone and then they decided to drop the bomb on you that they have over $100,000 in consumer debt? You probably wouldn’t like that. So, don’t lie about finances– even when it comes to some of the seemingly minor parts.
As you learn about each other’s financial situations, make note of the negatives, but also pay attention to your partner’s strengths. One person may be good at doing bills and paperwork, whereas the other may be better at sticking to a budget and keeping the expenses down. A good tactic is to divide and conquer responsibilities that play to one another’s strengths but work together on major decisions.
Don’t forget to mention how you two will earn money going forward. If both of you intend to work, that is fine, but if one of you wants to become a stay-at-home parent or plans to take extended leave you need to plan for it. Be open-minded and don’t shut your partner down without seriously considering plans they have in this department. Personal finance with couples is all about compromise after all.
If one or both of you feel uncomfortable talking about money, start with some smaller steps. Begin with generalities and work your way up to sharing specific, concrete details. Discuss smaller things like credit scores or expenses and budgets before moving on to larger things like income and total savings or debt. On top of that, you can start discussing short-term goals together and keep one another accountable for the plans you laid out in your discussions.
You can often figure out a lot about a person’s views on finances based on how they talk about their childhood and how their parents handled money. Your significant other’s views on personal finances likely won’t match their mom’s or dad’s entirely, but the way they talk about it is the enlightening part. Discussing how parents dealt with money will at least be a good way to get your foot in the door with this topic and let you know how your partner feels about it. For example, if their parents fought about money, it could mean your significant other may be more reserved about discussing it because they don’t want to have constant arguments. Additionally, if they complain about how one parent never followed a budget and how it hurt their family’s finances growing up, it is likely they have and follow their own budget strictly.
There Are A Few More Things To Consider Before Moving In Or Getting Married
- Will your finances and expenses be separate or combined? If you’re married, I personally recommend you combine them. Either way, it needs to be discussed and ironed out as soon as possible if you’re getting very serious. If you choose to leave your finances separate, be sure to divide expenses fairly – meaning an even 50/50 split. Often in cases with unmarried couples that live together, when finances are separate there is the potential for one party to take advantage of the other. Even though that can be inadvertent, a lot of people will be left feeling bitter because of it.
- While it is important to be honest, you don’t necessarily need to disclose all of your financial information. Once you’re married that completely changes, and engagements are more of a grey area, but if you’re just dating someone – even if it is very serious – you may want to pause before you give them absolutely all of your personal information.
- Make note of all red flags. Red flags like outlandish spending or large debt don’t mean you have to end the relationship. However, every red flag when it comes to personal finance should be addressed at some point, preferably before marriage. If a problem exists, it is best to try to nip it in the bud or at least make the sure you’re doing damage control instead of worrying about your partner potentially making the situation worse out of impulse or because of a bad habit.
- Admit your own potential red flags. Whether or not the other person considers them to be red flags is mute. Admit your imperfections and where you can improve. If you point out the flaws in another, but aren’t willing to work on your own, it will be hard to move forward in the relationship or make compromises.
- Be considerate and kind. Not everyone can live an exceptionally frugal lifestyle and be happy, and I don’t think you should push that burden on them. Yes, there will always be ways to improve, but let them have their minor indulgences if that’s what helps make them happy at the end of the day.
- Create concrete goals together. The only way goals you set will actually be followed is if both of you can agree on them together and have the mindset to work towards them. Few goals are mutually exclusive, so if you have one thing and your partner has another thing you can’t agree on, there is usually a compromise that will satisfy both in your financial life. Unfortunately, sometimes other aspects of your personal lives may have to give. Either way, be sure you at least make the effort to meet them in the middle.
- Set a timeline for when you’ll review your finances and your goals. It doesn’t have to be every month – as long as at least one person is actively monitoring the finances – but it could be once every few months. It’s important to go over where you missed or exceeded your goals together as a couple, and follow-up with a new set of goals and deadlines.
- Don’t forget to keep it romantic and light-hearted! Financial health is important, but it’s not the only important piece of a healthy relationship. After these serious discussions, be sure you have some quality time with your significant other that has nothing to do with these issues. In other words, have some fun together.
Conclusion
I know talking to your special someone about finances may not be a priority or sound fun, but it is a necessity that can be incredibly rewarding. Good communication is the foundation for all aspects of a strong relationship, and personal finance is no exception to that.
It’s important to talk to your partner about your financial futures – or at least where you plan on being. Just remember to be kind, fair, and attentive during these discussions.
If you have any other tips, feel free to add them in the comments! For more content like this, and a free budgeting template and financial goals worksheet, be sure to sign up for the Bitter to Richer newsletter.
