It’s well known that money can be a touchy subject for couples. But it can also be destructive if differences have not been properly resolved.
According to a study by Credit Karma, about one-third of respondents said they had ended a relationship over disagreements about their finances. Another 40 percent said that money leads to fights on a monthly basis.
Generally, not seeing eye to eye on your finances goes beyond how much you spend or earn. It can also reveal deeper cracks in the structure of your relationship such as how you truly feel about each other or what your ambitions may be.
For these reasons, it’s critical that couples talk to each other frequently and openly about money. Here are seven important financial conversations you should have with your partner as soon as possible.
1) Are We Going To Combine Our Finances?
This may or may not come as a surprise to you, but a significantly large proportion of couples don’t pool their money. This trend is becoming particularly frequent among younger people with only about 25 percent of Gen Zers and a third of Millennials opting to combine finances, according to a survey from Bankrate.com.
How your household finances get managed is up to you and your partner. However, what’s important is that you both understand each other’s position and why.
The best place to start is to ask the fundamental question of whether or not combining is even something you’re both comfortable with. If you do decide to stay separate, establish who will pay for what – including emergencies and saving for long-term, big-ticket purchases. Remember to be fair with each other, especially if one partner earns more money than the other.
2) How Do You Feel About Debt?
Debt such as student loans, outstanding credit card balances, etc. can be more than just an annoyance. For some people, it can cause them to face serious mental health issues including prolonged stress, depression, and anxiety.
Just like many aspects of compatibility in a relationship, you both need to get aligned on how the other feels about debt. For example, one partner might be comfortable living in the moment by racking up credit card charges. However, the other partner may see this as reckless spending and can’t sleep at night over the thought of having so much high-interest debt.
Right or wrong, you both need to understand where the other is coming from. So discuss what’s acceptable and what’s not.
3) How Much Is Too Much To Spend Without Telling Each Other?
Infidelity can come in many forms. There’s the classic version where someone isn’t faithful to their spouse. But then there are also more emotionally driven ones – one of which is financial infidelity.
Financial infidelity is when you spend too much money without consulting the other person. Or worse – you try to hide or even lie about it. When this occurs, it can create a litany of problems:
- Loss of trust from your partner
- Feelings of disrespect
- Resentment toward one another
For these reasons, couples must consult one another up front by establishing how much is too much. Whether that line in the sand is $100 or $10,000, it’s crucial to know where that it is so you can avoid crossing it. When in doubt, remember to always maintain a policy of honesty and transparency.
4) How Comfortable Are You With Investment Risk?
As couples begin to think about the future, they’ll have to make important decisions about how to invest their money and how aggressively they’d like to see it grow. However, with growth also comes the risk potential, and that’s the side of the equation that can be harder for some people to handle.
If you or your partner is a person who can’t sleep at night knowing that the stock market could wipe out half your savings this year, or that an investment in a new business might result in negative returns, then it’s important that you have a serious conversation before engaging in those activities. Somewhere there’s a middle ground between risk and reward, and it’s up to each couple to find a place where you can both feel comfortable.
5) How Much Do We Hope To Be Earning Five Years From Now?
This is a fun variation of the age-old interview question, “Where do you see yourself in five years?” Similar to your employers, this inquisition is designed to get you thinking about the future and perhaps even say something about your level of ambition. In some cases, you may find your financial goals are quite a bit higher than your partner’s.
The goal of course isn’t to make each other feel bad. It’s meant to be exploratory and potentially a platform to challenge one another. Afterall, the more the two you talk about the future, the more likely you’ll be to refine real, tangible steps for how you’ll get to where you both want to be.
6) What Does Retirement Look Like to You?
While many people have an idyllic perspective of what retirement looks like, the details of that vision aren’t always universally the same.
For instance, some people might believe that retirement means:
- Being able to buy anything they want
- Traveling anywhere in the world
- Owning multiple properties across the U.S. or the globe
However, retirement for others might be more simply:
- Spending time with their friends and family
- Enjoying hobbies they never fully had the time for
- Living modestly similar to the way they always have
As you can see, those are two very polar views of retirement.
The goal isn’t that one of you force the other to give up their dreams. Rather, you should want to try to find common ground.
It’s also important that you shape your collective vision to a realistic goal. Honestly speaking, traveling around the world and buying anything you want will require lots of money. If you both earn a modest income, then you may need to realize what your budget would practically allow.
7) Who’s Going To Keep Us On Track?
In every place of business, someone has the responsibility of making sure the company stays financially solvent so that they don’t go bankrupt. The same should be true about each household.
Whether one or both of you take an active role in managing your finances, the point is to not leave the role vacant entirely. At least one person has to be up to the task. Otherwise, you’d be like a ship without a captain – eventually on a collision course with an obstacle that is sure to sink you both.
For short-term spending, this can be automatically using a helpful budgeting app like Buxfer. Buxfer tracks all of your transactions and consolidates them into a real-time report that you’ll both be able to access. That will help make you aware of whether or not you’re on track.
For the long-term stuff, again, the solution is pretty simple – talk about it! The more two you engage each other in conversations about your finances, the more likely you’ll be to come to a better consensus about how much you should be saving, spending, and investing. In the end, that’s going to bring you closer to the financial future you both want to help the other achieve.
Featured image credit: Pexels
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