GrapeVineThe money conversation you need to have with your partner
The money conversation you need to have with your partner
So, you’re getting married! (Congratulations!) Now you probably talked about where you’ll live, the house you want, whether you’ll have kids and how to manage your in-laws. But have you talked about money? According to research, one of the biggest causes of divorce is money. Like it or not, this is a must-have conversation.
Five basic steps for your money conversation –
1) Understand each other’s attitudes towards money Start off by finding out what sort of money personality you and your partner each have. (We have designed one for you, try it here)
We each bring our own attitudes to money, and a lot of it is about how we were brought up.
You might have the same money personality, and this makes it easier to agree on how you will manage your money. But if you are very different, it is a good idea to discuss those differences and reach an agreement.
You might prefer to buy a few high-quality items over lots of poorer quality possessions. You might always know how much is in your bank account, or you might spend until it runs out and then switch to the credit card. When your approach differs significantly to your partner’s, there can be problems, and that’s why you both have to talk about it.
For example, your partner might be someone who spends whatever is in the bank account and never checks the balance, whereas you might spend cautiously and always know how much is in there. One solution might be to agree that each payroll, a specific amount will go straight to a savings account for something you both want. That way your partner can still spend everything in the account, and you can keep saving. What’s important is that you talk about it, because the habits of a lifetime won’t suddenly change when you both say, “I do”.
2) Agree on your goals What are the things you want for your relationship that come with a price tag? Is it a house, kids, regular overseas holidays, leisure time or even expensive hobbies? If it’s all of those things, how do you prioritise them? If you have different priorities, can you agree to compromises for each of you so neither of you ends up resenting future spending decisions and priorities?
3) Audit your current financial situation List all of you and your partner’s debts and assets and set goals for where you want to be in one year, two years, five years and so on. Then plan how to get there. You might consolidate debts to make them easier or cheaper to manage, and plan to make set regular payments.
Agreeing on a timeline for when you will achieve certain financial milestones will help you calculate how much you need to spend on clearing debt or building up savings. Put all of your shared financial information and planning in one place so you can both access it whenever you need to. Be open and honest.
4) Decide who will manage the finances There are a few ways to manage this. One person might manage all the accounts and bills, or you might share the jobs between you. Decide together. Make sure you’re both comfortable with this decision and be aware of financial abuse which occurs when one partner controls all the finances and doesn’t allow the other partner access to accounts.
5) Set time aside for money talks It’s a good idea to let your partner know in advance that you want to have a conversation about how you’ll manage your money as a couple, and to set aside time to do that. Make sure you focus on the issue – that is, how to manage your finances together – not on your partner, so avoid language that might make your partner feel defensive, like sentences that start with “you always…”. Remember, this is about reaching agreement, not about the rights and wrongs of different approaches to money. Like anything in a strong relationship, managing money also takes some shared emotional investment. By choosing not to leave it to chance you’re tipping the odds of happily ever after, in your favour.