It will come as no surprise to people who’ve been in a relationship that couples fight about money. In our recent Love & Money survey, we found that 53% of survey respondents find that having money conversations with their partner is stressful. Our feelings about money are inextricably linked to deeper emotional values like security, control, status, success and freedom. It’s no wonder that with so many loaded emotions attached, a fight about money can cause a lot of pain for both parties.
The solution? Most psychologists agree that talking about money with your partner early (and often) is the best way to prevent future quarrels. While there’s no way to completely eliminate money stress from your life, knowing your partner’s stance on finance from the beginning can help you predict how well you’ll manage your money together down the road.
Here’s an easy guide to the essential conversations you need to have with your significant other at every stage of your romance:
Let’s be honest: dating can be expensive! Begin a conversation with your partner about how you’ll split dinner and a movie on a Friday date night. Make a plan to split the cost at the point of purchase, Venmo each other later, or agree that one of you will grab the dinner and the other the movie. And don’t worry about killing the romance—instead, just agree that if someone says, “My treat!” you’ll each accept the generosity.
While you may have more dates that involve Netflix and takeout at this point in your relationship, but there’s always money items that come up. For example, if your partner always wants to check out the hot new restaurant in the neighborhood while you are trying to save for a big purchase, you need to have a talk. Be open about how you like to spend your money and what your budget is. Talk to your partner about what you each want to spend on dates, and come up with some creative ways to spend time together that don’t require pulling out your credit cards.
At this stage you may be talking about taking a vacation together, but make sure you both know the other’s budget and expectations before booking that trip to Paris. If you have different income levels, it’s especially important to set expectations around hotel costs, airfare and eating out while traveling. Having a candid conversation about what you can and can’t afford is so much better than having a fight because one of you booked a scuba-diving adventure the other can’t really swing. If you need to compromise on costs, taking advantage of credit card points toward flights, or traveling somewhere you can stay with friends, are both great options.
By now you’re probably pretty familiar with your partner’s financial habits and budget. But make sure you ask all the hard questions you’ll be facing as domestic partners before you move in:
- What can you spend on rent?
- What is your budget for new home items like furniture?
- Do you believe in spending on the same splurges, or would one of you
rather spend lots on groceries, while the other wants all the cable add-ons
and a flat screen TV?
- Should you open a joint checking account and credit card to pay rent and
other shared expenses?
- Who will be the main cardholder if you go that route?
If you’re planning on having a traditional wedding, prepare for some major expenses! Of course, take some time to enjoy your engagement, but make sure you leave space to sit down with your partner and plan out your wedding budget. Who is paying for what? Are your parents and in-laws contributing? What steps will you take together to make sure your big day stays on budget? Money woes right before you say “I do” are never a good idea. Better to have a plan and stick to it now than risk tensions arising down the line.
Before you tie the knot, it’s important to have a serious conversation with your partner about your financial state of affairs. Being open and honest with one another about what you make, owe, and own is important—after all, once you’re married you’ll share one another’s debt (or riches). It’s not always a fun, but that can mean working together to pay off your partner’s debts. You should also make a financial plan for how you’ll manage your finances once you’re married. Will you be keeping your finances mostly separate or combining them into a joint account? Will you be setting a cap on purchases that can be made without the approval of the other partner?
Tread lightly—these are the types of conversations that can have a lot of emotional baggage. It’s important to remain aware of your partner’s insecurities and approach the conversation with an open and empathetic attitude. This can be a great time to get a financial advisor involved. They’ll help you look at your finances objectively, take the emotion out of the discussion, and work with you to put together an actionable plan.
Baby on the Way
Congrats! You have a baby on the way, and you’re excited about everything that the future holds for you and your growing family. Take this time while you’re still getting a full night’s rest to create a financial game plan with your partner. Raising kids is expensive! How are you going to handle the additional cost now while also planning for your child’s future? How much of your paycheck will you set aside for your child’s care and schooling? Will one of you become a stay at home parent? What are the financial implications of losing that income? Are you going to help fund college, or set up a 529 plan? Put your heads together and come up with a plan that includes all of these items.
Where to Begin
As you continue your lives together, you’ll only need to have more and more financial conversations. Luckily, setting the right foundation early on in your relationship means that it will be easier to talk about money with your partner. Open, honest, and serious conversations about money are hallmarks of a solid relationship with a bright future. Good luck!
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
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