October 16, 2023 UFinancial

Talking money in relationships

7 tips for talking about finances with your partner

Discussing finances with your partner isn’t always easy. Approaching topics like debts, spending habits, savings, income, and other financial matters can make people feel vulnerable or uncomfortable. While many couples try and avoid the topic all together. In fact, Fidelity Investments’ 2022 Couples and Money Study revealed that 1 in 5 couples identified money as their greatest relationship challenge — and nearly 1 in 4 individuals said they were often frustrated by their partner’s money habits, but let it go for the sake of “keeping the peace”.

If you find it difficult to openly discuss financial matters with your partner, here are some tips to initiate and sustain these conversations in a constructive and healthy way:

 

  1. Start the conversation early

We aren’t saying to openly ask for someone’s saving habits on the first date, it is a good idea to assess your financial compatibility relatively early in a relationship. A few months into your relationship, start talking about your financial goals, such as retirement plans and homeownership, and spark the conversation to be both-sided. Instead of focusing on specific figures, ask open-ended questions that prompt discussions about your attitudes towards these goals. For example, you might ask, “Do you have any plans or goals for buying a house?” This will provide an insight into whether your financial goals and behaviours align. It’s crucial to understand that not everyone shares the same financial outlook, but significant disparities, such as one person favouring extravagant spending while the other prefers a frugal lifestyle and early retirement, should be taken into consideration.

 

  1. Keep the conversation going

Conversations about money should be an ongoing part of a healthy relationship, especially if you intend to make joint financial decisions or share financial responsibilities in the future. According to a poll by CreditCards.com published in January 2022, 32 percent of couples admitted to financial “cheating,” involving spending more joint funds than their partner would approve of, concealing debts, or maintaining secret credit cards or bank accounts.

Open and honest discussions about finances can help prevent such financial “cheating.” Before joining your finances with someone, such as opening a joint bank account, buying property together, or getting married, complete transparency regarding your financial situation is fundamental.

relationship money talk

  1. Talk openly about your experience with finance

While discussing future budgeting and sharing specific financial details like income, expenses, and retirement goals is important, it’s crucial to recognise that everyone’s relationship with money is shaped by their life experiences, not just their current situation. Some people may have experienced financial hardships during their childhood, while others may have grown up in financially secure households, affecting their risk tolerance and financial stress levels. Partners should openly share their financial histories and acknowledge how these past experiences may influence their attitudes and decisions.

  1. Lock in the conversations in advance

Whether you’re planning a financial discussion with your partner, parents, or other individuals you share financial obligations with (e.g., roommates or siblings with shared family finances), it’s valuable to plan ahead. Set aside ample time for a private, distraction-free conversation, preferably without young children present, to ensure a smooth and productive discussion. This preparation allows both parties to think about the topics in advance, leading to a more relaxed and effective conversation.

relationship money talk

  1. Professional advice

If you and your partner or other family members have opposing views on finances, or even if you don’t, seeking an impartial, third-party perspective can be beneficial. A financial planner can assess your current financial situation and provide recommendations on how to achieve your financial goals. While some people may be apprehensive about altering their financial habits, having a plan for your financial future is preferable to navigating without direction. Guidance from a financial planner provides a shared starting point, allowing you to discuss and implement their advice together.

  1. Discussions about educating your children about money

As everyone’s relationship with money is influenced by their upbringing, parents should not shy away from addressing financial topics with their children. Research published in September 2020 in the journal Frontiers in Psychology revealed that early childhood experiences related to money, such as having a bank account or learning to save for specific items, are associated with higher financial well-being in adulthood. Encourage age-appropriate conversations with your kids about money, offer allowances, and involve them in money-related decisions to empower them to make responsible financial choices. Decide with your partner how you will handle these discussions.

relationship money talk

  1. Expect challenges

The aim of financial intimacy is not to agree on every financial decision, as complete agreement is nearly impossible. Instead, it’s about learning how to navigate financial decisions in a healthy and constructive manner, ensuring that all parties feel heard. Even individuals with similar financial values may clash on certain issues. For instance, one partner might prioritise private school, while the other values exposing their children to different cultures through travel. By respecting each other’s perspectives and being willing to compromise, you can maintain a balanced financial relationship.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent. Content developed in partnership with IFPA.

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