September 24, 2016
For couples money can be a sensitive topic especially when the relationship starts to get serious. Now there is no right and wrong way to have a discussion about money, but having an open and understanding the relationship and being truthful about finances is a good place to start. Such discussions are a great way of strengthening your financial future together.
Whether you are just beginning to share financial responsibilities, or considering merging accounts, here are a few ways of getting the money conversation started so you can work out which is the best way forward for both of you.
One way to start the conversation, is to talk about the current financial income and financial responsibilities. Even if one person earns more money than the other it’s a good idea for both people to be involved in the discussion. Consider shared expenses. No matter how you manage your bills, agreeing up front on which items should be shared and which items should be individual expenses can make paying your bills a little less stressful.
It can also be helpful for the till you to talk about debts, or any other expenses you have that may impact your individual budgets. This could be anything from Hex debts, to credit card debt. There may be child-support, or other expenses. Whether you decide to go it alone on the these expenses, or manage them together - discussing these costs openly with him or her understand the financial presses they might be under.
Next, sit down and have a think about your goals and what you want to achieve over the next 5, 10, or even 30 years. Then sit down and talk together to see how your financial goals may agree or differ. One person’s goals might be more aligned to making memories, spending more on travel, or dining out. While another’s goal might be to trim expenses, like pay off debts, or save for a down payment on a house. But talking about each other’s goals and determining which goals the two of you will prioritise you can begin to find ways to balance both your expectations for the future.
Then you can start working on a joint budget to help you both achieve those goals. Go over your income and expenses together to decide what costs you can reduce, and which expenses you are agreeing to keep. Then you can start setting aside money for the shared goals. Whether you deciding to build a travel fund, or your decision as to save one wage so the other person could stay at home and look after the kids, doing a budget can help you keep on track to meeting your joint goals.
In order to keep the money conversation going over time you can set up dates to look at your spending and savings and see if you are on track to meet your goals. As your priorities change over time you might find that saving for a down payment on a home might become more important than dinners out or your next big vacation. In any case, setting occasional 'money dates' can help both of you achieve financial goalsand it can help you avoid conflicts over spending.
At a certain point the topic of joint bank accounts might come up. Theere is no single right way for couples to set up their accounts. For instance, you might both prefer the independence of keeping separate accounts, or you might enjoy the prospect of having a joint account so the two of you have equal access to all of your money. Or you could choose to keep a mix of separate and joint accounts with separate accounts for personal spending and shared accounts for your shared expenses and savings, like your family’s emergency fund. This can be more to manage but keeping a mix of separate and shared accounts can make sure that your needs are met as individuals, and as a couple. No two couples are alike, and what works for one couple might not work for the other.
But by having open and honest discussions about money and making financial decisions that work for both partners you will be better prepared to reach your personal and financial goals together.