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Discussing Finances with your Spouse or Partner

As children we are often taught that talking about money is rude. You don’t ask someone how much money they have, how much they earn or how much they paid for things. Even though the Internet has allowed us to become a culture of over-sharers, people still feel uncomfortable talking about money, sometimes even with their financial advisors. That discomfort can create conflict at home if it leads to avoiding discussing finances with your spouse or partner. 

Being able to have frank and respectful conversations about money with your partner is an important part of protecting your future relationship. Financial conflict is the root cause of many breakups. We’ve probably all known couples who split up because of money. (One 2012 study of 4,574 couples found that disagreements about money caused more divorces than disagreements about anything else!) You and your partner don’t want to be one of those couples, so it’s time to start talking. 

The How and When of Discussing Finances with a Partner

Everyone has their own personal relationship with money, which has been shaped by childhood events and past money mistakes. Especially now that people are getting married older than they once did, partners are entering new relationships with decades of past money experiences. Some people have feelings of shame, anger or anxiety around money. 

Because the topic can be so fraught, springing the conversation on your partner may make them feel defensive or overwhelmed. It may be more effective to say something along the lines of, “I want to make sure we’re on the same page about money so we can have a strong financial future together. Can we sit down tonight to talk through some things?” Having a little time to prepare for the conversation gives you both time to collect your thoughts.

As for when to start discussing finances with your partner, the answer is generally “now, and frequently.” There are certain discussions that have to happen when a couple first combines their finances, but all couples should be having regular check-ins with one another about money. Don’t put off these discussions. 

Financial Topics to Discuss

Since every couple has a unique relationship with one another and with money, that background will inform what kind of money conversations you need to have. But these are some of the basic topics that financial advisors would generally advise couples to cover. 

What you have and what you earn. Couples who share finances probably already know roughly how much money they each have and how much money they each earn. But for couples who maintain separate finances and are just starting to have conversations about merging their finances, this is a good starting point. Getting specific about yearly compensation and the contents of your checking and savings accounts is also important for creating accurate budgets and tracking your shared finances. 

Debt and credit. Do either of you have credit card debt or unpaid student loan debt? What about car loans, business loans or other debts that are in your name alone? How much do you owe, and at what interest rates? When are your payments scheduled to end? Even if you’re both financially stable and debt-free now, it may be useful to talk about past money mistakes and credit issues to learn more about each other’s historical relationship with money. 

Philosophies around spending, saving and giving.  Past experiences shape our relationships with money. Someone who is raised in a financially unstable home may grow up to be anxious about spending money because they’re determined to have savings to fall back on. Or they may repeat the same money mistakes they saw their parents make. 

Being able to anticipate some areas where you have different philosophies can be useful for avoiding fights and misunderstandings later on. So when you’re discussing finances, talk about your general philosophies around spending and saving. What you’re trying to learn is: How does your partner use money and think about money? It may be helpful to talk through hypotheticals. For example, say you each won $1,000—would you save it or spend it? What about $100,000? Would you rather invest it, put it in a trust for your kids or spend it on a once-in-a-lifetime vacation? Or, what if a family member came and asked you for a $10,000 loan? How would you both want to respond to that request? 

Also discuss your expectations around communicating about spending. Say your spouse makes a spontaneous decision to splurge on a new $500 gadget using your joint credit card. Do you expect them to talk to you about it first? If not, do you expect them to tell you about it afterward? What kind of spending can you each do independently, and what kind of spending do you want to be a joint decision? 

Your shared budget. When two partners share a household, sometimes one person will default to managing everything money-related. The second partner is in the dark about how much it really costs to maintain the couple’s current standard of living. This can lead to tension if the second spouse spends more than the money-manager spouse thinks they should. Go over the household budget so you’re both clear about how much your bills cost and how much you’re really spending on things like dining out, travel and entertainment.

Financial goals. As you work toward a future together, talk about each of your big-picture financial goals and how they align with one another. Is there something specific you want to be able to afford in the future, like a vacation property? What does a successful financial future look like to you? How do you want to use estate planning to keep your assets in the family after you’re gone? 

Also, how do you each think about investing as part of your financial future? Do you want to take more risks with your portfolio, or do you want to shift into more secure investments? 

Retirement plans. Ideally, you’ll be enjoying a long and satisfying retirement together. So what does a dream retirement look like for each of you? How much will it cost and how much are you projected to have saved by then? At what age do you each plan to retire, take Social Security benefits and start taking distributions from retirement accounts? Review your individual and joint retirement plans right now to make sure you’re on track for the future you’re imagining.  

Discussing finances with your spouse or partner can be daunting, no matter how long you’ve been together or how comfortable you are with one another. These can be emotional discussions that dig up a lot of unpleasant memories about childhood or past money mistakes. Be patient and remember that navigating your shared finances is an ongoing process. 

The financial advisors at Sachetta are here to help. We work with couples to help them clarify their financial goals and chart a course to help them reach those goals. Let us help you start the conversation about finances with your partner. Contact me today!

Eric Sachetta, ChFC®, CFP®

Eric Sachetta, ChFC®, CFP® is a Certified Financial Planner™ practitioner and focuses on financial planning and client relationship management. Eric believes that estate planning provides an opportunity to “look at all things that you value, see how they fit together, and make choices to balance everything and to maximize the things you want to do.”

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