How to Talk to Your Partner About Money: A Financial Discussion Guide for Couples
Congratulations! You’ve found someone you’re committed to and want to consider your financial future together. Here is your guide to a healthy, honest, and open conversation with your partner about how to manage your finances as a couple.
Step 1: Schedule time with your partner for you each to share your current financial circumstances.
Perhaps you’ve already discussed your financial situation (assets and liabilities) in which case, great! It can’t hurt to go over again to make sure you’re on the same page. If not, now is a great time to start.
Sit down and talk through your current assets (income, home ownership, etc) and liabilities (student debt, car loan payments, mortgage, etc) for both you and your partner.
Are you working towards paying off student loan or credit card debt? Maybe your partner has a low credit score because of some financial hang-ups they experienced in the past. Although this conversation may feel tricky to navigate, discussing this information with your partner early in your relationship sets you up for success by ensuring you’re financially on the same page and team.
Learning about your partner’s financial situation and sharing your own may trigger strong emotions. Come to the conversation with an open and empathetic mindset.
You might be surprised to learn that you have a significantly higher salary than your partner. Perhaps you experience jealousy of your partners’ lack of student debt. If you are able, take a breather and try to acknowledge these feelings before moving on. We all come to our relationships with different money histories and upbringings and coming to terms with these differences is a normal part of any relationship.
Pro Tip: Schedule this conversation in advance when both of you have the time and energy to devote to these topics. The last thing you want is to slam the door in your partner’s face when they offhandedly mention significant credit card debt because you are running late for work.
Step 2: Use these conversation-starters to discuss your financial goals, money history, and preferences.
Consider some money ground rules that might be important for your lifestyle. Outside of your shared expenses, is it helpful for you each to be able to spend some amount of money without needing permission? If so, how much could be allocated towards that budget?
If you and/or your partner has unsecured debt - such as previous credit card debt or student loan debt - is there a plan to tackle that debt? Now’s a great time to think through that together. If one person is carrying the debt load, how would you feel sharing that responsibility? How would it feel to pay that solo vs as a couple?
Are you working towards any shared long-term financial goals? If so, what are they? It’s okay to dream big together!
Communication is key. How frequently do you and your partner want to check in on your finances? Mark your calendar for a weekly, monthly, or quarterly conversation - whatever feels most doable to you as a couple. The more frequent you have these types of financial conversations the more comfortable they will feel. Practice makes perfect!
Pro-Tip: Make it fun! Think of these as money dates. Schedule them like you would any other date night. Get a glass of wine, light a candle, and talk through how you are doing towards your long-term goals and check in on how you are feeling about your shared finances. Toast each other as you get closer to reaching your goals! Step 3: Agree on a Financial Approach Together
While there is no one size fits all relationship money approach, here are some ideas to consider. Now that you have discussed the topics above you’re better equipped to tailor these concepts to your own financial circumstances or come up with your own unique approach.
Option 1: Merged finances/shared approach
Option 1A: Merged finances with fully pooled income(s)/assets
You and your partner save and spend using your pooled joint income(s)/assets. You can create a joint account where you pool your income(s)/assets and allocate that shared income towards your shared expenses.
Merging your finances allows you to save and work towards shared goals together using your combined assets. You’ll reach shared financial goals more quickly (like saving for a down payment) if you’re both contributing to them. There is no one-size fits all approach here so feel free to get creative.
Pro Tip: Many individuals thrive with the ability to spend some money independently. You may want to splurge on that kitchen gadget while your partner has been eyeing some fancy roller blades. If you do decide to create joint spending accounts, consider creating a separate “Fun” money account for each of you. In addition to having a joint account for shared expenses, these “Fun” money accounts allow you each to spend your “allowance” as you see fit.
Option 1B: Merged finances with proportionate earnings allocation towards shared expenses
In this scenario you approach savings and spending goals using a proportionate earnings approach and contribute a set percentage of your income into a joint account.
For example, let’s say you make $100,000 annually and your partner makes $50,000 per year. Your rent is $3,000 a month. Using this approach, you would pay $2,000 in rent and your partner would contribute $1,000. You proportionately pay twice as much of your shared expenses because your income is 2x as much as your partner’s.
Option 2: Separate Finances - You each maintain full financial independence
You each maintain separate financial accounts
You don’t merge any accounts and you continue to spend and save as separate individuals. You want to fully maintain your financial independence.
Note: You can still contribute to shared goals and expenses through this approach! You just won’t have access or transparency into one another’s accounts.
Remember to check in on shared finances regularly. Finances are an ongoing conversation; it’s important to ensure you are both on the same page.
Looking for a safe and supportive space to address these topics with your partner? Consider working with a money coach to set yourself up for success in the New Year! Schedule your free discovery call today.
