(From the Financial Literacy Blog) – According to a recent report, 40% of American adults who live with their significant other don’t know how much money their partner earns. Further, 43% of adults say they have financially cheated on their partner. These statistics reflect a lack of communication about money, with personal finance discussions having long-been a taboo subject. However, overcoming the stigma surrounding money talk is an essential part of wealth management and in ensuring positive financial outcomes in a relationship. Here are some tips on talking to your partner about money:
Listen, Don’t Lecture
When you talk about money with your partner, try not to lecture them—even if you feel they’ve been making financial mistakes or if their financial values don’t align with yours. Because the topic is already so taboo, being confrontational can make discussing money even more off-putting. By being accepting and constructive, you can help break down the stigma surrounding money talk. If you’re confrontational, you’ll reinforce the stigma.
Being truthful with your partner about your spending habits, debts, and financial values is vital to a healthy relationship. Talking about money with someone you love isn’t always comfortable, but it’s always better to reveal your financial situation on your own terms, as these types of conversations are the ones that can build or strengthen the foundation of your relationship. If you attended college and racked up $50,000 in student loans, tell your partner. If previous unfortunate circumstances led to you having bad credit, tell your partner. By addressing your financial truths, you and your partner can create a plan to address them. Further, being untruthful or committing financial infidelity is a major breach of trust in a relationship—whether it’s by sneaking or hiding purchases or keeping money in secret accounts. Being honest about money is an important part of a healthy support system.
Determine the Structure
Do you plan to merge your accounts? Would you rather keep them separate? Depending on where you are in your relationship, your structure may look different than other couples. You can merge absolutely everything, remain fully separate, or even follow a hybrid structure—where you both deposit a certain amount of money every week into a shared account based on income or other parameters you’ve set. Whether you’ve combined your finances or each one of you takes responsibility for different expenses, it’s important to communicate regularly to make sure you’re on the same page. Will you split everything evenly? Will you cover certain bills while your partner covers others? Developing a plan for paying for expenses can eliminate the stress you would face if you didn’t talk about it ahead of time.
Set Financial Goals
Sit down as a couple and discuss your goals. Whether it’s saving enough money to pay for your child’s college tuition or going on vacation, let the goals be known to each other. Remember that goals require sacrifices. That might mean skipping out on seeing the latest blockbuster in the theater or cooking a meal at home instead of eating out at your favorite restaurant. You can keep each other motivated and committed to your goals by celebrating milestones along the way.
Money is uncomfortable to talk about. Set aside a regular time with plenty of advance notice to sit down and talk about finances without distractions. If you don’t set aside a specific time, it’s possible that you may keep pushing the conversation aside. The world of finance is constantly changing, so checking in regularly to discuss budgeting, address problems, and evaluate progress on your goals is important. While knowing when to talk about money is important, knowing when not to talk about it is equally as important. Did you or your partner have a long and stressful day? Did your in-laws surprise you with a visit? Save the conversation for a day where you can be more constructive.
Remember, treat your partner as you would want him or her to treat you. You’re in this together and your local credit union is here when you need help!