Make sure you and your partner are on the same page about your finances and your conversations are productive.

Photo by Andrea Piacquadio

Money is one of those topics that we’re told we should avoid. But, in a relationship, that’s just not possible. It’s a big topic, and if you and your partner aren’t on the same page about it, then it will only cause more problems later on down the road. 

Any time that you start mixing your finances together, whether you start living together, get married, or start a family, you should start having regular conversations about your finances. Here’s how you can start talking to your partner about your finances and tips to help you both make the conversation as productive as possible. 

Step 1: Discuss Your Financial Values

Work to understand why your partner views money the way they do

Photo by Mikhail Nilov

You and your partner are two different people with two different lived experiences. While you may share the same values and outlooks on certain things in life, you have to remember that you will not always see eye to eye about everything. And maybe money is one of those things. 

Your partner may have experienced a different upbringing than you. Maybe they grew up in a family where money wasn’t an issue. Or, on the other hand, maybe money was a point of contention in their household. Their upbringing plays a big part in how they value money, regardless of whether or not they realize it. 

You and your partner may have some cultural differences that impact your views on money, or you may even have very different personal goals surrounding finances. As you start to broach a conversation with your partner about money, be open and honest about your own experiences with money and how that has shaped your habits. Encourage your partner to do the same so that you can work to better understand each other and why you have the habits you do. 

Ask your partner questions so you can both figure out what matters the most to you. This way, you’ll be able to come up with some type of compromise that works best for both of you. Ask about their views on home ownership, retirement, travel, and anything else that feels important in your relationship. 

Step 2: Understand Each Other’s Financial Situations

Be open and transparent about your financial situation and ask your partner to do the same

Source

You and your partner need to understand where you both stand financially. Without transparency here, you or your partner won’t have the full picture and won’t be able to clearly come up with a plan that works best for your situation. 

When you come into this conversation, pull information like your credit score, how much you make, your savings, and your debt. Encourage your partner to pull this same information. 

As you review this information, talk about how you both got into these financial situations. If you have a low credit score, talk about how that happened and how you’ve been working towards improving that. Discuss how long it will take you to pay off your debt or reach your savings goals. 

Try to approach these conversations with an open mind rather than getting frustrated with the decisions your partner has made in the past. Remember, neither of you can change the choices you’ve made. All you can do now is make a plan to fix issues and make smarter choices in the future. 

Step 3: Get On The Same Page About Specific Financial Issues

Talk about what’s most important to you both and what you should prioritize together

Source

As you start to have these financial conversations, try bringing up big financial issues or obligations in life that are important to you. You may share similar views on these topics but have different ideas on how to best approach them. You may find that you don’t at all share the same values, so this is important to talk about as soon as possible, too. While these aren’t the only topics that may be important to you and your partner, these can serve as a great starting point for your discussions. 

Budgeting

When you first start to mix your finances with your partner, you should get on the same page about your budget. Maybe you’re moving in together and want to start sharing some financial responsibilities. Maybe you’re planning to make a big purchase together. No matter the situation, adjusting your budget will help you plan better for whatever your situation may be. 

First and foremost, you should talk about whether or not you want to include both of your incomes in the budget. You may decide that it’s best to budget separately or together. You may even want to devote a certain amount of your pay toward a shared budget while keeping your other finances separate. 

After you have a better idea of how much money you are working within your budget, you can better decide how you will devote your budget. Talk about how you want to pay your bills. You may decide that you want to split bills equally, base your payments on how much money each of you makes, or designate certain bills to each person. 

Repaying Debt

Debt can feel like a huge weight on your shoulders, and it can surely cause some issues in a relationship if you aren’t aligned about managing debt. Maybe one partner has more than the other, or both of you have a large amount of debt. You need to make a decision on whether or not you will help each other pay off your debts. 

Ultimately, you may decide that it works best for you to focus on paying off your own debts rather than helping each other. Or, maybe you want to make a big purchase together, like buying a house, and one person focuses on repaying their debt while the other saves money for a down payment. 

Consider what you want to accomplish together in the future and how that plays into your timeline to repay debt. There are plenty of ways that you can make a plan to pay off your debt, and you can come up with a solution that lets you pay down your debt while working towards your larger financial goals. 

Buying a Home

Home ownership is a huge financial obligation. You and your partner may not even feel the need to buy one at all. Either way, start that conversation so that you can start working towards saving up the money to buy or put it towards something else important to you. 

If buying a house is in the cards for you and your partner, your timeline and budget will be important to discuss together. Ask yourselves these questions when you start to think about buying a house:

• When is the right time to buy a house? Will it be in 5 years or sooner? 

• How much house can you afford together? How much can you afford right now? Do you plan on any other financial changes happening in your life that may change how much home you can afford to buy? 

• How much do you need to save in order to make a downpayment? What is your timeline to save this money?

• How will you split the costs of your home after you buy it? How will you budget for things like home maintenance, utilities, and fees?

Once you start to have a clearer understanding of what you would like to accomplish, you can come up with a better roadmap for your financial plans. 

Starting a Family

Starting a family is an even bigger financial obligation than buying a house! Just like buying a house, though, having kids may not even be in the picture for you and your partner. But, if having kids is, then you definitely need to talk about when it might be the right time for the two of you to start trying and how you want to better financially prepare for that time in your life. 

You will want to talk about how you want to handle work in relation to raising your children. Can you afford to have one parent stop working to stay home and take care of your baby? Is that a permanent solution until your kids are older? Will you want to have some type of savings account started for your children to help them with college? How much of your debt would you like to pay off before starting a family? All of these important questions will help you get on the same page with your partner so you are better prepared for this life change when the time is right. 

Especially if starting a family is in the near future, something you may want to discuss with your partner, too, is a life insurance policy. Though it’s often overlooked, the best time to get a life insurance policy is when you’re young and healthy. It may be a good option for you or your partner to get a policy even before you plan on having a baby. If you have a lot of outstanding debt, share a large mortgage payment, or plan on one parent staying home to raise your child, you should consider your backup plans if one of you were to pass away. 

If you don’t have a great backup plan in place, then life insurance may be the right solution. Young couples especially find that term life insurance gives them the flexibility they need at the price point they can afford. 

This type of insurance guarantees a death benefit based on your approved coverage within a certain timeframe. So, if the policyholder were to pass away in that term, their beneficiaries would receive a payout to help them get back on their feet after their loss. It’s easier than ever to get a policy too. Lots of online companies offer no exam life insurance so that you can get a policy without jumping through extra hoops. At the very least, a life insurance policy would be a nice security blanket for you and your partner as you start your family. 

Step 4: Set Goals Together

Come up with a plan of action to work towards your common goals

Source

Once you and your partner get on the same page about your financial priorities, you can start to set goals for yourselves. Some of those goals may be individual and others may be shared. 

Ask yourselves where you want to be in 5 and 10 years from now and what financial changes need to happen to accomplish them. Talk about how you may accomplish these goals and what steps each of you will take to achieve them. 

Check back in with each other on your progress regularly so that you can keep each other accountable and stay on track. 

4 Tips To Help Your Financial Conversations Go Right

Get the most out of your financial discussions by fostering open communication

Source

Money tends to be a touchy subject for a lot of people, but that doesn’t mean that you and your partner shouldn’t talk about it. Instead, you need to acknowledge that it is an uncomfortable conversation and work together to make it as productive as possible. You both have the same, or at the very least similar, goals in mind. Do all that you can to make sure that the conversation goes smoothly so you can accomplish what’s important to you both. 

1. Make It a Habit

Your finances aren’t something you can simply talk about once and avoid until it becomes a problem again. You need to make it a habit and talk about it regularly to have better conversations. 

How often you have the conversation depends on how deeply you are financially connected. It may work better to have shorter weekly check-ins with each other if you have busy schedules. 

If you and your partner share financial responsibilities together fairly equally, it might be a good idea to set aside time each month to talk about your finances. You can even make it more fun by turning it into a date night! Plan a fun activity at home and end the evening talking about your finances. No matter what works best for you, make sure you make the time for it. 

It’s always best to schedule time in advance so that you can both be prepared. Bringing up finances on the fly when one of you is unprepared can lead to a heated conversation, and that won’t help anyone! Let your partner know what you want to talk about and let them share what they would like to discuss as well so you both are on the same page. Talk about what’s working and what’s not working. Take notes and make sure to actively listen rather than get defensive. 

Stay Open-Minded

When you have these financial conversations, always keep that conversation about both of your own values in mind. Let your partner explain why they have made the choices that they’ve made or have certain views on things. Approach the conversation with an open mind, empathize with their situation, and validate their feelings. 

While you want to be as accommodating of their feelings as possible, don’t shy away from being assertive in your views too. If you share different opinions on a topic, both of you should take the time to lay your views on the table. Then, be open to negotiating and compromise so you can both come to an agreement that works for you—even if it isn’t your definition of a perfect solution.  

Be Honest and Transparent

The idea behind these conversations is to build trust and to work together towards your shared goals. Hiding your spending habits or being dishonest about your debts can cause a huge rift in your relationship. You need to be as open and honest as possible when you have these conversations. 

Stay Level-Headed

Finances can be a heavy topic, and the conversation can get heated quickly. But, yelling at each other won’t get you anywhere. Having a calm, level-headed conversation is the only way to actually communicate with each other and make sure your conversations are productive. 

Even if the conversation is about something you are unhappy with, start the conversation out nicely. It might be easy to point blame at your partner off the bat, but this may discourage them from actually participating in the conversation and any plans to do better in the future. 

It’s also easy to spend the whole time talking about what’s going wrong, but don’t forget to give your partner compliments, too! It’s helpful to hear what you’re doing well. This lets you both know that you are making good choices and can encourage each other to continue making progress in the future. 

Always remember that you won’t always solve all of your financial problems during each conversation. Work towards coming to a compromise when you can, but remind each other that some of your issues may take time to resolve. Stay calm, relaxed, and remember to breathe! Things will work out when you both work together towards a common goal. 

Out of all the issues you may have in your relationship, don’t let money be one of them. The more you talk about finances with your partner, the more comfortable and empowered the two of you will be to make good financial choices. Not only will your relationship be stronger, but you will also feel like the two of you are truly working together to achieve your goals.