How to have a financial conversation with your partner

Couples who disagree on savings and investment decisions are twice as likely to divorce.¹

UC San Diego Research

Despite it being no secret that money can cause a breakup, being on the same page about finances is not a factor that’s highly considered at the start of a relationship. And depending on financial upbringing, talking about finances at all can be considered taboo. I can attest to this. My family never talked about money – it was treated as a secret. And if anyone shares this experience, it’s understandable why you may not broach the topic until you’re feeling too far down the rabbit hole of the relationship. 

Self-disclosure on your finances can also feel scary for a number of reasons. When I think about how to boil it down, it’s inviting judgement, which makes us feel vulnerable. What’s interesting though, is the way we handle and prioritize money can be very telling about many other areas of our lives and personalities. Think of the old adage, “put your money where your mouth is.” When dollars are involved, it’s interesting to see how a person truly prioritizes their goals and words. In short, the money conversation can help us know our partner better, faster. 

Therefore, setting the tone for the conversation is extremely important. It’s said that it takes 5 positive interactions to negate 1. And positive interactions are more difficult to recall in moments of stress. So if money = stress, you want to minimize conflict on the topic and have positive/productive conversations so you aren’t triggering stress in future discussions. 

1) Don’t ignore obvious flags and signals about your partner’s financials.
 
I usually wouldn’t suggest assuming anything, BUT, in a new relationship make wise observations to get the big picture on whether you’re dealing with a spender or a saver. Are they reading every article about student loan forgiveness? Are they buying rounds at the bar for friends? Do they hire out a lot of services or are they an ardent DIY’er? Doing this gives you a chance to get your bearings before having your first major conversation on finances. No sense having expectations for someone to coupon clip if you’re noticing a pattern of financial behavior that flies in the face of saving a few bucks. These observations are also opportunities to broach your first conversation. “Hey, I notice you’re reading a lot about student loans. Do you have any that might be forgiven?” 

2) Be open about your own values and financial goals

When you feel comfortable, share the lifestyle you envision and explain why your current financial choices are a priority. What do you want to continue doing? What would you change if you could? Where is money holding you back or pushing you forward? This should promote feedback from your partner. Take note of where your goals overlap and diverge. 

3) Figure out control of assets

If you’re a bit further down the road and you’re starting to share bills, it makes sense to figure out who/how to control the assets. Psychologically, having a joint account can make you feel like a team. It also creates a sense of duel ownership and responsibility of whatever the funds are applied toward. Being on equal footing is a very important relationship dynamic, and this is one way to accomplish it. However, that’s not to say each person can’t have their own pot. It’s not unreasonable to each have your own account + a joint. Setting the terms of how to fund the joint and how it’s spent is what’s important. And the beauty is there is no “right” way. It’s just a matter of setting boundaries and communicating. 

Note: When you start buying or making financial commitments together, be careful to consider a “living together agreement,” ownership registrations, beneficiary designations, usage boundaries, etc. For example, with a rise of people coupling vs marrying, I often see parents still named beneficiary despite the couple owning a home together. 

4) Get additional support if needed

When you’re having a hard time staying on track or agreeing on finances, getting the support of third party professionals can be helpful. Powwow can illustrate various goals and “what-ifs” to show the impact of a disputed decision. The process can facilitate compromise and broader conversation. Estate planners, insurance agents, and psychologists are also equipped to address specific money conversations related to concerns on “what-if” divorce, premature death, children’s inheritance, second marriages, etc. 

For more tips on having an effective conversation, click here!

 

¹ https://ucsdnews.ucsd.edu/pressrelease/differences-in-financial-risk-preferences-can-make-or-break-a-marriage