It’s difficult but necessary. Our financial expert shares tips on communicating about finances with your significant other.
Whether you are married, engaged, or thinking about the possibility of getting serious with someone, a talk about money should be had sooner rather than later.
Money is a tricky, uncomfortable thing that can break a couple at any stage in life. It does not matter if there is a lot of money or a little bit of money, if it is not managed properly it can be detrimental to a relationship.
In my business, I counsel a lot of couples around increasing their income, paying off their debt, and day-to-day money management. More than not, it is clear not all couples have had an open, honest conversation about their finances. As a result, I want to share some tips to help people at any stage in their relationship navigate a financial talk without feeling embarrassed or awkward.
First make sure it just you and your significant other in a peaceful, relaxed setting.
1. Discuss one another’s financial goals.
It is important to know where you and your significant other want to go financially, especially as it relates to lifestyle goals. This is a great conversation starter and will identify current income and debt levels. Couples should understand how their personal finances will now affect their significant other’s finances. It is best to get on the same footing with a solid financial vision and goals to achieve that vision. The two of you have to be financially great together and the only way to do so is by ironing at all the details when it comes to incomes, businesses, homes, and investments.
2. Determine your significant other’s strengths and opportunities.
Knowing if your significant other is a saver or a spender is HUGE. It will help the two of you determine who is responsible for ensuring bills are paid consistently and on time. Obviously savers and spenders budget differently as well, it will take some work to help the spender stay on track. Just as it might be a challenge to get the saver to spend money. Know how to encourage your partner to be their best selves.
3. To have joint accounts or not, that is the question?
This is absolutely the decision of each couple. There is not one right or wrong answer here. Some couples have their own separate checking accounts and then a joint account for family saving and household bill payments. While other couples have joint checking and saving accounts, all the money goes to one place and they both share a debit or credit card. Still there are other couples that do not have joint accounts at all, one partner is responsible for making all the household payments and each person saves in their own saving accounts. You have to find a balance that works for you and your significant other because finances are like relationships, one size does not fit all.
4. Protect your spouse against the loss of your income.
Your significant other will eventually come to depend on your income to manage the household. It is invaluable to protect against such a loss or disability. Finding the right insurance is imperative. Talk to a trusted professional because your job benefits may not be enough or may not be available upon termination or retirement.