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Now Reading: How Do I Talk To My Partner About Money?

How Do I Talk To My Partner About Money?

In any long-term relationship, you’re going to have the occasional unpleasant conversation. In the two-and-a-half years Renée and I have been together we’ve had our fair share, covering disagreements, family dramas and even past relationships. But without a doubt, the most unpleasant conversation we’ve ever had was the first time we talked about money.

We were three months into a six-month stay in London, our home base while I completed an overseas university exchange. One Sunday, sitting in Soho Square, we had reached a crisis point. Renée’s freelance contracts had ended, she was struggling to find full-time work, and with debt repayments looming, she wasn’t sure how she was going to pay next month’s rent.

I wasn’t able to help much. I had underestimated my own weekly living costs and my savings were fast diminishing.

During the conversation, I remember feeling overwhelmed by this sense of helplessness – like there was nothing we could do to fix this situation. In the days that followed, worries about money filled my mind and stole my sleep. The same thought went through my mind over-and-over “I wish we’d had an honest conversation about money sooner.”

Renée and I aren’t the only ones who have struggled to talk about money. One survey found that for many people, personal finance was a harder topic to discuss than politics, religion or death.

There can be many reasons for this reluctance. You might have grown up in a household where money wasn’t talked about; you might have debts or financial mistakes that you’re ashamed of; or you may just not know how to bring up the topic.

But money problems are consistently listed in the top 3 causes of divorce, so if you want to give your relationship the best chance of success, this is a must-talk-about topic.

Renée and I can still find money an uncomfortable topic to talk about at times, but we’ve learnt a lot from our early mistakes. Here’s everything I wish we had known prior to that crisis convo in Soho Square:

WHEN TO HAVE THE CONVERSATION

The best time to have a proper conversation about money is at the point when your relationship is starting to get serious. For most people, this is around the 4-5 month mark.

When researching for this blog post, some of the articles I read advocated bringing up the topic of money in as non-confrontational a way as possible, asking questions like “what do you think about investing versus saving?” or “what would you do if you won a million dollars?”

I don’t recommend trying to covertly slip questions like these into conversation. Money is a topic that will be an important part of any seriously relationship and it’s a topic that carries a lot of baggage for many people. It’s important to have an intentional conversation about it.

With this in mind, it’s usually worth scheduling a “money talk” with your partner a few days in advance. This prevents either party from being blindsided and it gives you both the chance to mentally prepare for the conversation.

You might say something like “I’d like to share my money situation and goals with you, and I’d like to learn about yours. Is that something we can talk about next time we’re together?”

I’m going to give you a full blueprint of the four important topics you should cover: your “money mindset,” and your financial past, present and future. However, don’t feel like you need to cover everything in one 6-hour sit-down. It’s ok to break this up into four separate conversations or however many you need.

One of the goals here is to lay the foundation for you to frequently re-visit the topic of money in your relationship (in a positive way!), so take your time.

UNDERSTAND YOUR MONEY MINDSET

Before we dive into the numbers, it’s important to understand how both of you think about money. Dr. Brad Klontz, a financial psychologist, argues that there are four behavioural scripts most of us follow when it comes to money.

Each script is a set of habits, beliefs and opinions you hold. It could be considered your money personality (but without the fun Buzzfeed quiz to figure out which one you are). The four scripts are:

Money avoidance: You avoid consciously dealing with the subject of money wherever possible. Maybe you think it’s not important, or superficial, or you’ve been burnt by money in the past. Whatever the reason, it’s something you try not to think about.

Money vigilance: You’re very watchful of your financial situation. Money vigilant people tend to embrace frugality and the importance of saving. They track their spending and often feel bad about buying things.

Money status: You place a high importance on the symbolic value of money. Money status people tend to want to own the newest and best, believing that money and what they spend it on is a symbol of status.

Money worship: You believe money is the solution to all your problems. Money worshippers chase money, thinking about it often and letting it shape virtually every decision they make.

There isn’t necessarily one script that you’re confined to. Klontz writes that “sometimes people come out high on several of those scales,” but “typically there’s one scale that comes out higher for them than the others.”

Each of these scripts has positives and negatives. A money vigilant person might accumulate a decent savings balance, which is good. But they might also be reluctant to be generous and experience guilt whenever they make a big purchase, which is not.

Any of these scripts, if left unrecognised and unmanaged, can cause trouble. So, it’s important to figure out how both you and your partner approach the topic of money. To do that, Kristin Wong recommends asking some of the following questions:

What was your experience of money when you were growing up?

What was your family’s socioeconomic status?

What did you learn from your parents about money?

How often do you think about money in your day-to-day life?  

How important is saving money for you?

What are your biggest financial fears?

What are your biggest financial goals?

It might also be helpful to send your partner this post, so that they can read through the different scripts themselves. After learning about these scripts, I can tell you that I’m definitely money vigilant, while Renée is a self-professed money avoider.

However, the fact that you and your partner have different views and behaviours around money isn’t necessarily a deal breaker. What’s important is that you understand each other, communicate, and respect each other’s differences.

Knowing that I’m money vigilant, Renée knows that I feel uncomfortable if I’m not saving at least a small amount of money each week. Knowing that she is money avoidant, I don’t just bring up finances with her out of the blue. We schedule in a conversation and I’m careful not to be confrontational about it.

Finding out the other person’s attitude to money is an important first step, because it will help you to better understand why their financial past, present and future look the way they do.

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YOUR FINANCIAL PAST

Any mental health professional will tell you that our childhood experiences play a big role the kind of person we become.

Growing up, my parents didn’t have a lot of money. There was always food on the table, but we were quite frugal with our spending. There’s no doubt in my mind that this is one of the big reasons why I’m a money vigilant person today.

When you’re talking about your financial past, sharing about your experiences of money growing up is a great place to start. Good questions to ask are:

What was your experience of money when you were growing up?

My family struggled with money, did yours?

What did you learn from your parents about money?

DEBT

Whether it’s credit cards, student loans or other liabilities, almost half of millennials report that they have a problem with debt. Knowing whether your partner is one of them and how they handle their debt is going to tell you a lot about how they manage their money

It’s important you both share honestly about any debts you’ve struggled with or are still paying off. Some questions you can ask are:

Have you ever struggled with debt?

Do you have any trouble with credit cards?

Do you still have any debts outstanding?

Do you have a plan for paying off that debt?   

How do you manage the debts you have?

The essential principles you want to be a part of this conversation (and every conversation you and your partner have about money) are honesty and transparency. If you’ve got debts, don’t try to blunt the reality of that. To say you’re “in a bit of debt” when you’ve got 5 figures of credit card debt is dishonest. Let the numbers speak for themselves.

If your partner has significant debts in their past or that they’re still paying, try to be understanding. We live in a consumerist culture that aggressively markets the message “buy now, pay later.”

It’s also quite possible that they’ve never been educated on effective money management. This is something that many parents don’t pass on to their kids and it gets left out of the school curriculum as well.

WHAT IF MY PARTNER IS IN A LOT OF DEBT?

If your partner is in five or six figures of debt, it’s worth considering the impact that’s going to have on your relationship. From first-hand experience, I can tell you that debt can hang over your relationship, preventing the two of you from going out for nice dinners, travelling or saving for your wedding.

But while debt can be a red flag, it isn’t necessarily a deal-breaker. What’s even more important that that your partner’s experience with debt is his/her attitude towards it.

If your partner is in a lot of debt, but they don’t really care, I would consider breaking up with him or her. Money is far from the most important thing in a relationship, but poor money management often points to other problems (irresponsibility, greed, etc.) and it’s definitely going to hurt your future life together.

But if your partner hates that they are in debt, they have valid reasons for the debt they’re in (student loans, etc.), and they are committed to paying off their debt as soon as possible, that’s a different story. It’s still something to take seriously but supporting your partner through that can be a very real expression of your love for him/her.

When I first found out during our conversation in London that Renée was in debt, it was a shock. But she had learned from her past financial mistakes and she was committed to paying the debt off, so I wanted to support her through that.

It wasn’t easy. The debt prevented us from doing so of the exciting (and expensive) things we hoped to do while we were overseas. But a few months later, Renée paid off the last dollar of her debt. While we were out at dinner celebrating, I remember actually feeling grateful for this challenge, because navigating it together had strengthened our relationship.

YOUR FINANCIAL PRESENT

The next topic to talk through is what your finances look like week-to-week. This includes your income, your expenses, your savings, whether you follow a budget, and your short-term financial goals.

Good scripts to follow are:

My income is $45,000 a year and my expenses are roughly $450 per week. What about you?

Do you follow any kind of financial budget week-to-week?

Right now, the biggest expense I struggle with are my car repayments. Do you have any big expenses like that?

I’ve got $5000 that I’ve saved over the past year. Do you have any savings? Do you save money every week?

My next financial goal is [insert goal here], what’s yours?

This part of the conversation is one of the reasons why you’re going to want a bit of prep-time prior to talking about money. You’re going to get clear about:

  • Your total income
  • Your bank accounts and the amount in each
  • Your weekly expenses
  • Any outstanding debts and the payments you are making towards them
  • Any kind of financial budget you use
  • Your financial goals

This is a sensitive conversation that can require a lot of vulnerability, so it’s important that there is an even exchange of information. You’ll notice that the questions above often start with you sharing your income/goals/etc and then asking your partner to share his/hers. Going first can be a simple way to make your partner feel more comfortable.

Remember, it’s not a competition. It’s not about who earns more, who saves more, or who has the tightest budget. This conversation is about understanding, and not just understanding the other person. For many people, this conversation is the first time that they take a serious look at their own financial position and spending behaviours.

As a result, this conversation can often be a catalyst for creating positive change. When Renée and I first talked about money in London, we finished that conversation with a better understanding of our own financial situation, how it affected our relationship, and how it was going to impact our future together. In result, Renée started paying off her debt in a more deliberate way, while I became more mindful of my weekly expenses and budgeted accordingly.

YOUR FINANCIAL FUTURE

Finish the conversation by sharing your financial goals for the future. If you don’t have any, this is a great opportunity to create some. Do you want to own a home someday? Be debt free by the time you’re 35? Go on an epic overseas adventure?

Again, a good way to start this part of the conversation is by sharing your own goals:
My dream would be to own my own home in the next 10 years. What are some of your goals for the future?

I love travel, so one of my goals is to be in the financial position to regularly take overseas holidays. What about you? Do you have any lifestyle goals like that?

One of my goals is to open an investment account that I put 5% of my income into each week. That way, by the time I’m 50, I’ll have a decent nest egg. Do you have any long-term financial goals?

It might be as simple as I’d really like to learn more about money management, so my goal is to read a couple of the best books on the subject. What about you? Do you have any goals around how you’d like to improve with money?

If this has been a hard conversation for you, talking about the future is an opportunity to inject a bit of hope. Even if you’re in a challenging financial situation right now, that doesn’t have to be your reality forever. If you approach that situation with wisdom and hard work, you can make it through to the other side and accomplish your goals.

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CHECK THE BOXES

As I mentioned at the start of this post, don’t feel like you have to cover everything in one, 8-hour-long gauntlet of a conversation. You might want to tackle each of the four segments individually, over a number of weeks.

To make sure you don’t miss any of the big topics, Kristen Wong created the following fantastic checklist of the important things to cover when talking to your partner about money. I’ve added a couple of my own check boxes as well:

 

Your Financial Past

☐ Credit cards you’ve opened

☐ Loans you’ve taken out

☐ Foreclosures, bankruptcies, debt that’s been settled or charged off

☐ How you’ve dealt with money in the past

☐ How your parents dealt with money when you were growing up

 

Your Financial Present

☐ Outstanding debt(s) you owe

☐ Debt you’re actively paying off, including credit cards, student loans, mortgages

☐ Your income or salary

☐ Money owed to you

☐ Investments you have

☐ Your budget

☐ Your money mindset

 

Your Financial Future

☐ Debt payoff goals

☐ Savings goals

☐ Money management goals

☐ Lifestyle goals

☐ Retirement goals

 

AGREE TO DISAGREE

One thing you can be certain of in your conversation about money is that you and your partner won’t agree about everything. And just because you have different perspectives, it doesn’t mean that one of you is necessarily wrong. There are multiple ways to think about and manage money successfully.

Remember, this conversation shouldn’t be about explaining why your way is better or teaching your partner something (unless they ask you to). The goal here, as with virtually every meaningful conversation you have with your partner, is to seek first to understand where they are coming from.

Even if you disagree on a money matter, it doesn’t necessarily need to be a deal breaker. There is usually room for compromise and I’m rapidly learning how important this is in marriage, when it’s no longer your finances and mine, but ours.

For example, let’s say one person in your relationship really cares about sticking to a tight budget. But the other person likes the freedom to go out and spend some of their hard-earned money on whatever they want. A potential compromise could be that you set aside a certain amount of your weekly income (say 10%), that you can spend however you want, but you stick to a tight budget with the rest.

KEEP THE CONVERSATION GOING

Like most of the conversations in this series, talking about money shouldn’t be a one-off. As a married couple, Renée and I spend at least a few minutes every week talking about money – how we’re going with saving, upcoming purchases, any big or unexpected expenses, etc.

We also have a more intentional discussion about money every couple of months, to reflect on how things are going financially and make sure we are still on the same page regarding our short-term and long-term goals.

If you’re married (or currently planning a wedding), I’d recommend these brief weekly check-ins coupled with a more intentional money chat every 1-2 months.

If you aren’t married, talking about money every week is probably unnecessary, but I would still build the habit of touching base every 1-2 months. You’ve hopefully both set some goals – whether it’s paying off credit card debt, putting aside some savings or learning more about money management – and this monthly check-in is a great opportunity to share how you’re going.

Bigger picture, you want to normalise talking about money in your relationship. For so many couples this topic is a complete no-go, and for too long, Renée and I were one of them. We never really talked about money in previous relationships, and we avoided it in our own relationship until we reached a crisis point.

The first time we had to talk about money, it was really uncomfortable. It was awkward the second and the third time as well. But over time, it became a lot more normal. These days, it’s not a big deal to talk about money, even when things aren’t going as well as we would like.

For every one of those couples who eventually lists money as a reason for their divorce, I can promise you there was a lack of communication. They weren’t having intentional conversations about their finances, they weren’t seeking to understand their spouse’s relationship with money, and they weren’t sharing their short- and long-term goals.

Talking about money might not be in your comfort-zone, especially if you’ve got a few financial skeletons in your closet. But if you want to set your relationship up for success, it’s a topic you can’t afford to ignore.

If this article has made you realise that you’d like to learn more about money management, there are three books I would recommend to get started:

The Barefoot Investor by Scott Pape (written in an Australian financial context).

I Will Teach You To Be Rich by Ramit Sethi (two versions, one written in a US financial context, the other in a UK context. Yes, I know the title sounds scammy but trust me, it’s a great book).

The Total Money Makeover by Dave Ramsey (written in a US financial context).



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