Talking about finances with your partner doesn’t have to be difficult – here’s how to get comfortable with money talk
Money may make the world go round, but it can be a tricky subject to bring up with your partner, especially when it’s a new relationship. In fact, a staggering 30 percent of couples don’t even know each others salaries, according to a survey by Policygenius. However, it’s clearly something that we should be discussing, as this same research revealed that 20 percent of people in couples who don’t manage their money together plan to leave their partner due to financial problems, while just four percent of those who do collaborate financially are planning to leave for those reasons. So, how can we broach the topic with our loved ones? We turned to Lisa Conway-Hughes for her expert advice to help you manage your money as a pair.
How can I talk about finances with my partner?
Money can be a taboo subject and people’s relationship with it is so often heavily influenced by their upbringing, that their views can sometimes be illogical and very difficult to unravel. This can create a lot of potential arguments within a partnership. Here are my tips for how to talk to your significant other about your finances:
1. Talk about the good and the bad – start by talking through your financial dreams and what you would like to work towards as a couple.
2. Treat it like a business meeting and take turns to talk if it gets heated.
3. Make sure you both agree – it is very easy for the more vocal/financially knowledgeable partner to dominate the conversation.
4. Just because you have discussed it once, it doesn’t mean the discussion is closed forever. We all change over time, so it is important to continue to keep the dialogue open.
How will our money work together?
It’s really important to get a plan together that you are both happy with from the beginning. Don’t forget that by combining your finances, you are both responsible for the good and the bad (i.e. debt). Here are some questions you need to ask yourselves to help build financial trust between the two of you:
• Will you go the whole hog and have all money going into one account?
• Will you have a joint account that you each pay into and then have separate personal accounts for personal expenditure?
• Will you pay in different amounts towards the bills if you are earning very different amounts?
• What will happen to you as a couple if one of you isn’t able to earn due to illness/injury?
• Who will manage the day-to-day spending? Ideally you should be doing this together, rather than relying on one person.
What happens if one of us earns significantly more than the other?
Research by LV found that a quarter of women now out-earn their partners and that this imbalance can often lead to arguments. Reports additionally show that having less money than your partner and having to rely occasionally on them for financial support can make you feel a loss of control, guilty for being a burden or even lead to low self-esteem – all of which may start to chip away at the relationship. Find out what you both feel about the imbalance and decide together on what is, and what isn’t acceptable. Even if the finances are unequal, it’s important that you find the equality in other ways in order to maintain a healthy relationship.
What happens if one of us wants to make a change that will result in a significant salary cut?
Again, this decision needs a joint conversation. How will this decision impact you both financially and what sacrifices will have to be made, both as individuals and also as a couple? To avoid any heated arguments in the early days of this discussion, base your conversation on facts. Play around with your budget planner and imagine what your new life (no matter how temporary it is) will cost and what sacrifices will need to be made to make the books balance. If this change is going to have a temporary financial impact, you both need to be sure it is the right thing to do and that it will take you in the direction you want your future to be heading.
Four money mistakes to avoid as a couple
You’re choosing the wrong time to discuss it
Money can be a touchy subject at the best of times, so try to pick the hour of your discussion wisely. Steer clear of evenings after work, as you or your partner might have had a stressful day and won’t be in the right frame of mind to talk bills. Find a more relaxed time and you’re likely to get a better reception and have a more productive conversation.
You’re hiding and lying about money
It’s vital to be upfront about any debt or other money worries you have. Sadly, figures by Lloyds Bank show that almost one in four of us has lied to our partner about money. This can obviously lead to arguments and even a break-up, so while you may be embarrassed by your financial situation, it’s not fair to keep it to yourself and getting it out in the open will help you deal with it together.
You haven’t set a financial goal together
You can’t assume that you’re on the same page with money, you need to talk about it. Otherwise, one person might be saving up for a lavish, once-in-a-lifetime holiday or expensive renovations to your home, while the other is happily spending money on smaller, everyday things. Setting a joint goal with a reason behind it that suits both of you will help motivate you to work together on all things money-related.
You haven’t got spending rules
This will ensure that you check with the other person before making big purchases that could cause financial problems, for example, buying a new car. That way, you both get a say in it before it happens to make sure that you can realistically afford it and that there are no surprises.