How to Talk About Finances with Your Significant OtherFebruary 25, 2017
Money is possibly one of the largest sources of stress on a person’s life and in their relationships. In fact, finances are the leading cause of stress and conflict in relationships, according to a recent survey. It is a topic that many Americans avoid and often include in the same category of heavily debated subjects such as religion and politics. Although talking about money matters with a partner can seem daunting, it is one of the most important discussions a couple can have together. Whether married, engaged, or in a serious relationship, it is never too early to have an open and honest conversation about personal finances and how both parties’ views and habits work together. If you are looking for ways to approach the topic of finances with your significant other, here are some ways to get started:
Are you a spender or a saver?
Assessing you and your partner’s financial habits is a good place to start. People usually fall into two different categories based on their spending habits — spender and saver. Figuring out which type you and your significant other are can help you make financial decisions and better understand where your partner is coming from. Savers tend to look at the bigger picture when it comes to finances. They are looking toward the future by saving for retirement and preparing themselves for the unexpected by saving for emergencies. On the flipside, spenders are more spontaneous with their money and like to enjoy the benefits of their hard work in the present.
If one partner is a spender and the other is a saver, getting on the same page can be difficult — but it is not impossible to reach a compromise. Budgeting is a great way to do this — it satisfies the saver’s need for financial accountability, and it may cause the spender to realize how his or her purchasing decisions affect the couple’s finances. To keep the spender happy, try to work a “fun money” category into your budget as a responsible way to get their spending fix.
What is your current financial situation?
Where you both stand financially is a crucial topic to discuss before marriage. After all, by tying the knot, you are also tying together your finances — and if you are in debt, the other person in the relationship is affected. Many couples who do not have an honest talk about money before marriage are blindsided when they find out their spouse is thousands of dollars in debt. Before taking that step in your relationship, have an honest discussion with your partner where you disclose all credit card debt, education loan debt, or other types of debt.
What are your long-term financial goals?
Take some time in your conversation to talk about your hopes and dreams for the future. Do you want to purchase a home in the future? Do you want to pay off your student loans sooner? Do you want to travel the world? How much do you want to have in savings or investments by a certain point? Where do you see yourself in ten years? In fifty? Talking about the future and seeing if your long-term goals align with your partner’s is a great way to make sure you are on the same page and working toward a shared goal.
The “Money Talk” Is Necessary
Good communication is key for a relationship to be successful — and that is true for finances as well. More than 40 percent of couples surveyed by Country Financial said they did not discuss how they would manage their money together before getting married. Although having clear and open lines of communication about money in a marriage is imperative, many financial experts stress the importance of discussing finances long before a significant other becomes a spouse. While talking about money is a serious topic that can be difficult to approach, it is crucial to ensure you and your partner are on the same page when it comes to money so that you have a greater ability to set your relationship up for success in the future.