How to Talk Money With Your Partner

Do you talk to your partner about finances? If not, have “the talk”. It may very well save you frustration, save you money, and save your relationship.

I recently read an article on The New York Times, four money talks to have before marriage, and a response at Get Rich Slowly. I agree that this is critical (talking money before you marry could someday save your marriage). But this is not just important for couples considering marriage. A lot of us youngins shack up long before we marry, if we marry at all. So I think these articles need to be re-framed as money talks to have before living together.

What Should You Talk About?

The Times article illustrates four topics couples need to cover, and I can’t think of much to add. They are:

• Ancestry. What did your parents teach you about money? What are your financial predispositions?
• Credit. How do your credit scores compare? What does this say about how you have managed money in the past? How will this impact your ability to reach future financial goals?
• Control. Who handles what bills, how much can each partner spend independently?
• Affluence. What are your financial goals?

Why Have the Talk?

For married couples, the reasons to talk about money are more or less obvious: Your finances are now legally combined and financial problems are the leading cause of divorce.

But if you’re not married, why bother talking about money?

At the very least, if you’re living with somebody, you’re sharing a big chunk of your monthly expenses (housing payments, utilities, groceries, etc.) Do you know what you would do if one of you lost his or her job? Could you still pay the rent?

And although you may be less likely to merge finances than married couples, how you each handle money independently will still impact your common financial goals.

For example: Do you hope to take a vacation this year? Are you both saving for a trip, or will one of you go into credit card debt to make it happen? Do you hope to upgrade your apartment or buy a home? What will it take to move up?

How to Have the Talk

As much as Jay Monee is trying to change public perception to the contrary, I think most would still agree that personal finance is decidedly not sexy. (A million in hundred dollar bills showered on a hotel room bed? Sexy. Comparing credit scores? Definitely not.)

To ease the discomfort of talking about finances:

• Plan a time to talk about money. Carve out an hour or two and sit down over coffee or wine. Whatever you do, don’t spring the subject of your partner’s spending habits at the end of an otherwise romantic dinner.
• Prepare for the talk. With your discussion scheduled, you should each pull your credit scores, write out your latest monthly budget, estimate your net worth (assets and debts), and jot down your financial goals.
• Be understanding and open. As you start to talk about money, listen to your partner’s side. For this to work, there are going to be compromises. Shopaholics can usually learn to tame some spending, but spendthrifts can learn to live a little, too.
• Write it down. Finally, take notes. Write down any financial changes you want to make along with your joint financial goals.
• Keep it going. Talking about money should be an ongoing dialogue, not just a one-time down-and-dirty negotiation. The more you talk about money, the more comfortable it will become, and the easier you and your loved one can find common ground and begin achieving financial goals together.

What about you? What are the most important financial topics you discuss with your partner? Has it been difficult to have these talks? How have you made it easier?