Most conversations with your partner are apt to be about everyday topics: dinner options, vacation destinations…maybe even speculating about what the neighbors are up to. What might be more challenging? Talking about money. Yet it’s incredibly important, given that finances are regularly cited as a top reason couples fight. If you’re in a committed relationship, talking about money could be one of the most crucial conversations you have. Here are some guidelines to keep in mind as you talk finances.
Make a money date with your partner.
It might not sound romantic but planning for a money talk can be more palatable if you surround it with something fun, like having your financial planning discussion over your favorite sushi takeout or heading to the movie theater after your chat. Personal finance talks can be hard so it’s smart to reward yourself with some fun couple time after.
Talk about your goals and values.
When you get right down to it, how you spend your money is a reflection of what you want out of life. For example, if your dream is to own a home, you’ll need to start saving for the down payment. Or you might want to spend a few child-free years traveling, which means that’s where most your discretionary income will go. Talking about short, medium and long-term financial goals can help build the foundation for your budget. And if there’s disagreement on priorities, it allows for an open, honest discussion so you can figure out how to reach a consensus or work on multiple desires simultaneously.
Decide how you will blend your finances.
Some couples put their money together, others keep it completely separate, and still others find success with a hybrid “yours, mine and ours” strategy, where there’s a fund for shared expenses and a separate account for each person. While there’s not one “right” strategy for different couples to address spending habits, you might be interested to know that a study from a professor at Cornell University discovered pooling finances led to greater relationship satisfaction, leading to couples who were more connected and had more positive interaction. One way to still maintain some financial autonomy is to designate an amount each partner can spend, with no judgment or questions asked. When you manage money like that, it allows one to continue to feed their shoe habit and the other to get the latest gear they’ve been eyeing.
Come clean about your debts.
If you’re just getting started joining financial forces, you might be reluctant to share a dirty little secret. That could be a buying binge that left you with big balances on store credit cards, a depleted bank and savings account or even a legitimate source of debt such as student loans, especially if your partner doesn’t have any. Yet you have to look at how you manage money holistically, which includes making a plan for erasing these debts and getting your credit score back in good shape, if needed.
Vow not to keep money secrets from one another.
This may be easier said than done: A poll from the National Endowment for Financial Education® (NEFE®) found that 43% of couples with combined funds said they had committed an act of financial deception. But it’s a bad idea: A whopping 85% of those revealed that the money problem had affected their relationship. In another study, 42% of respondents said they consider financial and physical cheating to be the same. Talk to your partner about what types of expenditures should require a money conversation before you take action.
Make sure each partner has an equal hand in understanding your finances.
Sometimes in a couple, one person is deemed “better with money,” and carries out the bulk of the financial decisions, especially weightier ones such as choosing insurance and making investment decisions for retirement. However, to ensure a secure financial future, both partners should understand the choices that are being made and how they affect your finances in both the short and long-term.
Revisit your budget frequently to stay on track.
As relieved as you might be to finally have finished your couples money conversation, it shouldn’t be a “one-and-done” proposition. Schedule regular check-ins to revisit your budget to see if you need to fine-tune it and analyze progress on your goals. Between meetings, use Valley’s Mobile Banking app to check your balance and stay in tune with the status of various financial tasks.
Seek a third-party perspective if needed.
Couples counseling can help with many issues, and finances is a big one. If you already see a counselor regularly (it can be a great way to mitigate issues before they mushroom), add discussing finances to your next session. Or, if you feel your partnership would benefit from a session revolving solely around money matters, seek out a provider who specializes in couples financial therapy.
Better financial health can translate to stronger bonds
The whole goal of a relationship is to share all aspects of your life with someone else, and financial stability is a critical component of overall wellness. Building trust and communication by talking about money can be a vital building block of a strong foundation. Money goals can be your new couple goal!
For more advice on money matters, visit the Valley Learning Center today.