Guidelines for Having Successful Financial Conversations with Your Partner
As an individual, it takes hard work to get your finances right — when there are two of you, it can be even more challenging. Financial issues are a major source of stress in many relationships. According to Business Insider, "Money is the No. 1 thing couples argue about."
More often than not, it boils down to not having enough financial conversations with your partner.
Various factors can play a role. Sometimes, the impetus is a power imbalance stemming from one partner having, earning, spending or owing more than the other. A 2017 survey of more than 2,000 individuals found that 27% of respondents who were in relationships identified disagreements over money as the main stressor between themselves and their partners.
As with other relationship strains, a good solution for this issue is communicating consistently, aligning on a shared plan and sourcing the tools needed to make conversations productive. It's also important for both parties to adjust their expectations and commit to learning how to cooperatively manage finances.
Studies that assessed the impact of financial stress on couples from varying backgrounds found that when both partners practice "relationship maintenance behaviors" — which center on a regular dialogue — they generally handle such difficulties best. In fact, a 2017 survey by Ramsey Solutions found, "Those who say they have a 'great' marriage are almost twice as likely to talk about money daily or weekly compared to those who say their marriage is 'okay' or 'in crisis.'"
5 Tips for Getting (and Staying) on Track
Of course, the ways that couples work together vary widely. But there are certain approaches that can help you have successful conversations with your partner about money. Here are five strategies you can use to build and maintain a healthy financial relationship:
- Communicate regularly.
Many people find it difficult to deal with relationship finances. But the easiest way is to start talking (and keep doing so). To get the most out of your conversations, ask questions, be non-judgmental and ensure all bases are covered. As financial adviser Michael Farrell told The Wall Street Journal, "Understanding each person's cash flow — the details of what each is spending, what it's being spent on and why — helps avoid surprises and resentment later on." - Be honest.
It goes without saying that strong partnerships are built on trust. This is especially true with respect to the financial side of relationships. Having candid conversations about financial habits, attitudes and goals keeps everyone on the same page. For some, this might mean creating a "relationship balance sheet," comprised of both partners' assets and debts. It could even extend to exchanging credit reports, as either partner's obligations could affect household finances. In this same vein, sharing FICO scores annually (and discussing how to improve them) is a healthy habit to adopt. - Work together.
The key to successful businesses (and relationships) is teamwork and shared goals, which depend on collaboration, compromise and common ground. When it comes to joint finances, it also means appreciating what both sides bring to the table, even when contributions don't have a monetary value. In cases where partners have contrasting money styles — one's a spender and the other's a saver — each should try and adopt the other's style for several weeks to gain a better understanding. - Stick to the plan.
To keep things on track and achieve financial hygiene, get together for "money dates" arranged at mutually agreeable times. Adhering to a regular schedule can make it easier for both sides to prepare. During these conversations, topics such as monthly spending, bill paying and day-to-day accounting should be discussed. Our Financial Hygiene Checklist provides you with a list of items to review and discuss monthly, quarterly and annually to help guide the conversation. These get-togethers can also serve as forums for developing and refining goals as well as determining whether financial plans are working as intended. - Get help when it's needed.
Relationships rarely come with instruction manuals, especially when it comes to finances. To better understand issues that might arise — and to overcome money-style differences — it can help to work with a financial adviser or therapist, or tap into available educational resources.
Choosing a Management Strategy
Admittedly, such tactics only go so far. In practical terms, couples also need to decide on a strategy for managing household finances. Broadly speaking, there are three main approaches: shared, separate or a mixture of the two:
Shared Finances — Putting everything in one pot makes it easy to budget, monitor spending and accommodate the demands of a growing family. That said, it can also lead to dissatisfaction when there are economic imbalances or contrasting management styles.
Separate Finances — Under this arrangement, partners are responsible for their own spending, saving and borrowing, which some view as a fairer way to reduce conflict. However, it can still be hard to monitor who owes whom or is responsible for what, especially where children are involved.
Hybrid Situations — In this case, partners contribute to shared accounts — often on a 50-50 basis — but also keep funds separate for themselves. This makes it easier to track personal expenses, mitigate disagreements and maintain transparency while preserving a measure of financial independence.
Working It All Out
No system is perfect, of course, but the more you communicate and collaborate when it comes to joint finances, the better things will be. Remember to keep emotions in check during discussions, and focus on your shared interests.
Quite simply, regular financial conversations with your partner make for a healthier relationship. Talking about money can be difficult, but it's necessary — and anything worth doing is worth doing right.