The Money Talk: A Practical, Step-by-Step Guide
According to the 2019 Newlywed Report from WeddingWire, 54% of couples have discussed finances to some degree by the time they get engaged. Hopefully, if you and your partner have decided on some form of “happily ever after,” you fall within that statistic. If not, it’s time to have the “money talk”.
We can all admit up front that talking about finances is not likely to be anyone’s favorite topic. Not only is this conversation a heavy one, it can also be hard to find a starting point. To get to the other side of this heavy-duty talk in a hurry, you might be tempted to jump right into the numbers. Things like earning power. Debt load. Net worth. Our advice is to resist that urge.
Before you get into the nitty gritty, taking the time to learn about and understand each other’s beliefs and viewpoints about money will be well worth your time. Things like what motivates you and your partner financially, and how the two of you value money as compared to other pursuits in life, are both part of your overall beliefs that we call your “money mindset”.
Here are some questions you can use or modify to explore the subject of money with your partner:
Figuring out your “money mindset” and where it came from
The question “What do you consider your biggest financial successes and setbacks?” is an interesting and revealing place to begin discovering each other’s beliefs about money. Taking the time to remember things like that time you hit a major savings goal so you could dive in the Caymans for two weeks, or accepted a job for less money but greater growth potential, will tell your partner a lot about what motivates you financially. Likewise, talking about past problems and pitfalls with money will tell you how readily our partner learns from and takes responsibility for financial mistakes.
Follow-up questions might include “How would you describe the role money plays in your life” and “Have you learned any lessons about managing money?”
Exploring how your early years affected your beliefs about money
Most of the “money scripts” that run through our heads as adults have deep roots in our childhoods. How your partner’s family felt about and dealt with financial issues is an insightful way to understand why they may feel the way they do as adults. Individuals who grew up in financially insecure families may place a high premium on saving money. If credit card debt undermined their family’s stability, they may be reluctant to consider any type of loan—even a low-interest, good value loan.
The two of you may be aware of the results of these formative experiences from childhood…or not. Asking questions like “What kind of financial behavior did you see modeled growing up?” and “How did money affect the relationships of the adults in your life?” The answers will help you discover if one another’s families’ socio-economic status affecting your money mindsets, and how similar and/or different your experiences with money have been.
Discussing your life and financial goals
Exploring and understanding each other’s financial pasts is important. So is looking ahead to your shared futures. That’s why asking questions about what your partner wants out of life, and how those goals and dreams impact shared finances, are another important exercise. What are our shared major life goals?
One of the biggest considerations for the two of you includes children. Do you both want to start a family? If so, how will this affect your lives—including your careers and your incomes—and are there financial steps you will need to take to support this goal?
Talking about debts and credit history
Most people learn early on in a relationship if their partner is carrying student debt, or if a previous break-up or divorce was costly to them. Sometimes, people are forthcoming with each other about where they land on the credit score scale. At some point, however, those generalities need to yield to the details, so that the nitty gritty about your debts, savings accounts, investments, and other possible money baggage can come into the light.
Hard though it may be, this is no time to be shy. Hide nothing. Include a list of all the debts you owe—the type, balance, and interest rate on each, and how you’re working to pay them off. Be prepared to share your credit history, including your score. (Don’t know your score? You should.) Many couples pursue joint credit at some point, so your partner should understand if you are—or aren’t—in a position to share debt for a car, house, or other need.
Disclosing other financial obligations
Everyone’s financial profile is the sum total of many things other than earning power, debt load, and credit history. You need to discuss and disclose other responsibilities that affect your total financial picture—including the amount of support you may be legally or ethically obligated to offer children from previous relationships or other family members. If you own a business, to what degree have your mortgaged your personal assets to fund it?
Examining spending and saving patterns
Now that you’ve disclosed things like the income, savings, and assets each of you has, it’s time to move into your goals related to each of these things. Cover savings goals you’re already working on, as well as things you’d love to save for in the future. Show your partner your budget and share the process you use to make saving and spending decisions. Ask them if they consider themselves a saver or a spender—that distinction significantly affects your financial partnership. Ask your partner how they feel about budgets. Does setting one up and following make them feel pleasantly in control, or like they’re choking to death? As much as any part of the money talk, this discussion will reveal in which areas you are already of one mind and where you will need to compromise.
Managing money together
Whether you will combine your money, keep it separate, or work out a combination of both is another key area for discussion. While some couples embrace a “same pants, different pocket” approach to money, others will need more differentiation than that. Explore your thoughts about sharing bank accounts or keeping them separate. This will help you determine how you will share financial responsibility. How do you two feel about a “yours, mine, and ours” approach, in which you keep separate accounts for personal needs and wants, and contribute jointly to a household account for other things? How will you share the responsibilities and tasks of managing household finances? Which one of you will take the lead?
We agree that talking about money can be difficult and demanding. Try to frame it this way: as you navigate this deep water, you will learn extremely helpful things about your partner—not just about dollars and sense—but also about how they handle life in general.
We want to leave you with this: How you talk about money is just as important as what you talk about. Keep in mind these loose guidelines to help you make this all-important conversation feel more natural and ultimately more helpful:
- Look for natural openings to talk about money. If a mutual friend shares a money victory or challenge with the two of you, discuss it respectfully afterward. Maybe you can ask, “What did you think of that?”
- Approach this conversation honestly and transparently. Remember your ultimate goal is to ensure a sound financial foundation for the most important relationship in your life.
- Recognize there will be challenges throughout the discussion and assume that you will not always agree. Be flexible and willing to compromise. Make your focus on finding common ground.
- Agree on a few boundaries to keep things respectful and on the rails. No name-calling. No raised voices. No money talk at bedtime or on date nights. Do what you need to do to keep things productive.
- Pace yourself, take breaks, and accept that this is an ongoing conversation that doesn’t happen all at once.
- Don’t judge. Listen and give one another the benefit of the doubt. Step back, be curious, and let your partner own their feelings, experiences, and values—about money and everything else.
Sometimes, despite your best efforts to keep things non-judgmental and productive, you and your partner may wander into hostile territory. This is when it’s important to try to get to what’s driving the discomfort behind these exchanges. Many people find that talks that start out about money that escalate have crossed the boundary into something even more deep-rooted. See if you can figure out what else may be going on when your discussion about money gets uncomfortable.
Some people have trouble staying within the rules during their money conversations no matter how hard they try. If you hit a roadblock, don’t hesitate to bring in an objective third party like a financial coach or a therapist who can help steer the conversation back to being helpful again.