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Money Conversations are hard. Just the thought of sitting down with a partner to discuss variations in spending habits can cause a sense of existential dread. What if it doesn’t go well? Can we still be together if we don’t have the same money goals? Are our differences insurmountable?
The thing is – financial problems are one of the leading causes of divorce in the US. Although it’s true that circumstances and priorities change, I sincerely believe that having money conversations early and often can help prevent this – or can help identify incompatibilities before a lifelong commitment. Either way, it will save a lot of future pain and heartache.
Should We Talk About Money Before Marriage?
Every person is different, and every relationship is different. Some people say that you shouldn’t talk about finances until you are married, and some couples have completely separate finances even after tying the knot.
But, in my amateur opinion, I think you should start talking about money as soon as you decide to be in a committed relationship – if not earlier. Maybe you should avoid subjects like how much money you make and how much you have saved at the beginning of a relationship (some folks latch on to that as though it’s their gravy train, and will say anything you want to hear in order to keep that gravy going!) but there are a few things you should talk about early on.
Money Conversations You Should Have When You First Start Dating
What Are Your Long-Term Financial Goals?
The great thing about asking a new partner about long-term goals is that they don’t have to divulge any information on what they currently have if they’re uncomfortable with it, but you still get insight into their financial priorities.
Long-term goals can seem so far off that it’s comfortable to have conversations about them. These might include things like homeownership or going back to school or fun things like buying a boat. It could include any variety of goals depending on your current life stage. It’s good to know what your potential partner thinks about when thinking about the financial future.
What Do You Tend to Overspend on?
Maybe you can find a more delicate way to phrase this – but what you really want to know is what they tend to spend their discretionary income on. Do they buy the latest video game whenever it comes out? Head to the bar every time they get paid? Want all the latest fashions? Save for trips?
Knowing what they actually spend money on now will give you a lot of information on what they are likely to spend money on in the future. Are you okay with a partner who spends all their extra money on stuff that you don’t really appreciate? It’s probably a dating faux pas to comment on their spending so early on, but getting a basic understanding of where their money priorities lay can help you determine if you see a future with them.
How Do You Feel About your Current Job? What are your Career Ambitions?
This is a double whammy question -but it’s important! If your current prospect is working a menial job – are they happy there? Are they aspiring to do better? And if they aren’t – are you okay with that?
Some people have no problem being with partners who make less, and some absolutely want a partner who makes either the same or more. I’m not here to go into whether these things are right or wrong – that’s for each individual to decide for themselves. However, if long-term earning potential in a partner is important to you, you need to discuss this before jumping into a long-term commitment.
What Do You Envision for Your Retirement?
I love asking a potential partner hypotheticals. This is a question that I’ve even broken out on a first date before! And it’s important. To me, retirement involves doing it early and exploring the world, and guess what? If a potential partner is not on board with that, we are probably incompatible. It’s better to find that out after one date than after two years, right?
I once mentioned my quest for financial independence and goal to travel the world on a first date, and the look of abject terror on my date’s face was comical. He didn’t have the same goals and desires. He wanted to work until he was 64/65, then retire to a life of leisure. Although there’s nothing wrong with that goal, it’s not compatible with what I want out of life. We decided that a second date wasn’t in the cards. In my opinion, it’s better to find stuff like this out early in a relationship.
How Do You Have A Conversation About Money?
It’s pretty easy to have these early money conversations. They can be fun and posed in hypothetical ways. Learning these things about a partner is a vital part of the getting-to-know-you phase.
However, you should not stop having these conversations after you’re in a committed relationship. Goals change, plans change, circumstances change, and people change. Something that was a goal ten years ago may not be the goal now.
It’s harder to initiate these conversations with a partner when expectations and feelings are involved, but it needs to be done. And, the money conversations need to be more in-depth once you decide to be fully committed.
Money Conversations You Should Have When You Decide to Get Serious
Are We Having Kids? How Will We Pay for Them?
The decision to have children or not has numerous far-reaching implications beyond the financial. It’s a huge, life-altering decision, and I’m always shocked when I hear that people got married without even talking about it.
But, considering that it costs over $250,000 to raise a child, excluding college -it has a huge impact on your financial life as well. Talk about whether you both want kids and how you will pay for them. This includes conversations about daycare, healthcare, whether someone will be a stay-at-home parent, and what the financial implications of that decision will be. It’s far better to have a plan laid out before having kids than to be surprised at someone’s expectations once a child is on the way.
What is Your Savings Rate?
This is a hard question to ask without sounding like you are after money, but it’s important to know your partner’s relationship with money. Are they even capable of saving? If not, is it due to circumstances beyond their control, such as wage stagnations? Or is it because they are a spender? Do they save for retirement? Have an emergency fund?
I’m not asking you to delve into specifics. I get that some people are shy about divulging exact amounts, even to a partner. However, if you want financial security, you have to make sure your partner wants it to and that they are actively working for it like you are. Getting with the wrong partner can destroy your own financial health – trust me, it’s not worth it.
How Much Debt Do You Carry?
Debt is an incredible burden. With the majority of young adults carrying at least some student loan debt, it’s likely that your potential partner has some. Find out how much they carry and why. Determine how they plan to pay it off.
Being burdened with debt isn’t necessarily a deal-breaker. Education is important, and emergencies happen. But it’s best to know how much debt someone has prior to joining your lives together. Some people team up and help each other pay off the debt, others don’t care and think each person should fend for themselves, and still, others don’t want to get involved with someone who even has a debt burden. These are things that you need to discuss and decide as a team how to tackle each person’s debt load – or decide for yourself whether it’s something you want to deal with or not.
What is your Credit Score? Do you Have Any Credit Problems?
While I don’t recommend asking to see a potential partner’s credit report, it is important to know their creditworthiness. Whether or not they can access credit has serious implications for your entire financial future. Will they even be able to get a home or a car if their credit is bad?
Of course, you aren’t a bank and aren’t judging them solely on their credit score. It’s possible that they made some mistakes or got in over their heads when they were younger. What you do with the information you gain from this conversation is entirely up to you – some people may have no problem working through their partner’s poor credit, while it may be a deal-breaker for others. But you need to know before you decide to get serious.
Money Conversations You Should Have Once You Are Married
When you first get married, you probably want to bask in matrimonial bliss. However, there’s a lot to think about in terms of finances for newlyweds, so when you’re done celebrating your nuptials, consider the financial topics you need to discuss.
There are some conversations that are specific to marriage (or a long-term partnership – marriage isn’t for everyone). This doesn’t mean you should stop talking about any of the stuff above – this stuff is fluid and definitely not a one-and-done sort of thing. You should be talking about your financial goals all the time!
These conversations are serious but definitely a necessity with a long-term partner. Some of them are morbid, and others are uncomfortable, but it is so much better to be prepared with a plan if the worst-case scenario rears its ugly head.
Let’s Talk About the Budget
An important initial conversation you need to have when you get serious is the budgeting conversation. This is the one where you talk about all things finances. Are you going to mix finances? Have one joint account for bills but keep everything else separate? Does each do your own thing?
How will you decide who pays what each month? If you mix everything, how much can someone spend without discussing it with the other person?
Remember, though – circumstances can change. It’s important to revisit the budget conversation every few months to ensure that the split is working for everyone. You’re a team now, and ensuring that both members are comfortable with the money management is vital to the relationship’s success.
What Happens if One of us Dies?
It’s uncomfortable to talk about one’s own death and terrifying to consider the premature death of a partner. So, of course we shy away from this conversation. But ensuring that each person has an estate plan in place and knowing what that plan is will be a huge relief should the worse happen – especially if there are children involved.
Ensuring that both of you have life insurance is a must if you have underage children. More than likely, they rely on both of you and losing one would have a drastic impact on their financial future. Consider term life insurance from Liberty Mutual to make sure that your family is covered.
What Are We Going to Do About Our Aging Parents?
Unfortunately, as we age, so do our parents. Having a plan in place for their care is paramount to your family’s financial health. Do you have the time, energy, and space to take any in-laws in? Who gets priority? Does either of you have siblings that might be able to help with their care? Is a nursing home a viable option?
These are conversations that are much further reaching than any financial implications, but it’s important because any type of care is expensive. If your parents didn’t plan, and you will be on the hook for paying for their care, it’s important that your partner is on board.
Can We Afford to Pay for College?
College is one of the biggest costs people will have in their lives. Having parents who are willing and able to help pay for it is an incredible asset to young people and a major way to build generational wealth.
You should talk about whether you will pay for college with the initial conversation about having kids. If you decide that you want to help any current or future children with their education, you can set up a College Backer 529 plan. I love this plan because friends and family can “gift” money to it to help you grow the fund. It’s a great option for birthday and Christmas presents for relatives that want to help your kids achieve their financial goals and will give your children a huge head start in life.
What Happens if Someone Loses a Job?
Life happens. Jobs may seem stable and then disappear. We get burned out with high-stress careers. The possibility that one of you will lose a job at some point in your life, whether due to downsizing, health, or anything else, is pretty high.
So what will you do if that happens? Will one of you be a stay-at-home parent? Will you be willing to move? Do you have enough investments/savings to sustain yourselves in the short term? Should you start a side business to hedge against this?
These are all important financial conversations you should have before it becomes a possibility. Knowing you have a plan to fall back on if something happens will be incredibly helpful in an already stressful situation.
Do we need to see a Financial Therapist?
Conversations about money are hard. If you are in a stable relationship but can’t seem to agree on financial priorities, sometimes therapy can help. A therapist can be an objective third party that will help you communicate your priorities to your partner.
If you’re good at communicating about money goals but aren’t sure how to execute them, a financial advisor can help. Make sure that whomever you seek is fee-based and not making a profit off of selling you less-than-stellar investment opportunities.
Should Relationships Be 50 50 Financially?
I think it’s impossible to have a hard and fast rule about what a relationship should be. Instead, it’s important to work as a team and develop a plan that works best for both partners. A 50/50 relationship can easily turn toxic if one person makes a lot more money than the other and yet expects the other to pay the same in expenses. Because of this, many couples have found that contributing based on a percentage of their income works better. Other couples share everything. Still, others have a stay-at-home parent situation, and the family relies on a single income. Splitting everything 50/50 is impossible in that situation.
The important thing when considering who contributes is to ensure that each partner feels that their contributions are valued and that each partner agrees that the split is fair. This may need to be revisited at regular intervals. If someone opted to be a stay-at-home parent, are they still comfortable with that choice 6 months later? If the bills are split 50/50, and someone gets a huge raise, what do you do with the extra? Situations are constantly changing, and constant communication is your best option for navigating those changes with your partner.
Does Money Matter in Love?
I was young and idealistic once -thinking that money wasn’t important. The truth of the matter is that money is important. Incredibly important.
Not only is it essential for financial security, but it’s also crucial for living the life you want to live. Now, that being said, I wouldn’t agree that you should only date folks with money. Sometimes, someone who would rather stay home and take care of the house is exactly what an ambitious career driven person needs. To me, it’s not about the money so much as about your financial priorities and respect. If your partner doesn’t have a lot of money – do they expect access to yours? Do they try to get you to foot the bill for their wants? If so -I’d definitely reconsider the relationship.
But if your partner is happy not making a boatload of money and contributes to the relationship in other vital ways, I don’t think money is as important. However – everyone is different, and everyone expects different contributions to a relationship. What works best for me may not be what works best for everyone.
How Do You Start a Conversation With Your Partner About Money?
These money conversations aren’t easy. No one wants to be blindsided with an argument about how they overspent again. Instead of starting with an accusation because something happened, have the conversations regularly planned. If possible, institute quarterly “money talks.”
Make it fun – have some wine and cook your favorite meals. I think one of the major reasons that we avoid these conversations is that they feel like a chore – and worse yet, when framed the wrong way, one part of the team may feel attacked.
If framed in a relationship-building way, the conversations can be more productive and less likely to cause defensiveness.
What Other Money Conversations Do Folks Need to Have?
Hopefully, this gave you a good start to what you should be discussing with your partner. However, I know this isn’t the be-all-end-all. What other money conversations should be included on this list? Let me know in the comments!
Melanie launched Partners in Fire in 2017 to document her quest for financial independence with a mix of finance, fun, and solving the world’s problems. She’s self educated in personal finance and passionate about fighting systematic problems that prevent others from achieving their own financial goals. She also loves travel, anthropology, gaming and her cats.