Money matters can be a sensitive topic for many couples, especially when your relationship is getting serious. According to this article, about 64% of couples don’t feel financially compatible with their partner. This means having different philosophies about spending, saving and investing their money. The same article stated that 45% of adults in partnerships admitted to hiding purchases from their partners. Behaviors like this can lead to strained relationships, arguing. and in some cases, divorce. Knowing how to have those financial conversations and how to make decisions with your partner can make a huge difference in the health of your relationship.
While I don’t think you and your partner need to have the same financial philosophy, I think it’s important to be on the same page with your financial goals and strategy. When Kurt and I started getting more serious and started discussing money, we learned a lot about our financial beliefs, and some of them were very different. Being able to openly talk about money and questions we had around it made our partnership stronger. If you’re struggling to bring up the topic or have trouble finding ways to talk about money, below are a few tips to help you and your partner make sound money decisions together while building a stronger connection.
How to Make Money Decisions with Your Partner
Set Clear Financial Goals: begin by setting clear and realistic financial goals as a couple. Whether it’s saving for a vacation, buying a home, or planning for retirement, having a shared vision provides a roadmap for your financial journey. Having a goal can also help you stay on track and prevents you from making poor spending decisions.
Create a Joint Budget: establishing a joint budget is crucial for managing your finances collectively. Outline your income, expenses, and savings goals. This not only helps in tracking your spending but also promotes transparency and accountability. *This doesn’t mean you need to combine all of your finances, however, having a joint budget can be really helpful to help manage your money. Before we got married, Kurt and I established a joint budget and opened up a joint checking account to help us manage our finances together. This also enabled us to save for common goals we had.
Open Communication is Key: be open and honest about money matters. Regularly discuss your financial situation, concerns, and aspirations. Create a safe space where both partners feel comfortable sharing their thoughts and feelings about money. Kurt and I found it easiest to talk money when a basketball game is on the background and when we’re eating a snack or a good meal. This way we’re both relaxed and in a comfortable setting. We also don’t judge each other when we ask simple questions or when we aren’t sure about a finance-related topic.
Understand Each Other’s Money Background: each person brings their own experiences and attitudes towards money into a relationship. Take the time to understand your partner’s financial background, including their upbringing, values, and any money-related anxieties. This understanding can help navigate potential conflicts and find common ground. Knowing that Kurt and I grew up with different money habits truly formed how we managed our money. It’s also important to factor in our money personalities- which affects how we spend, save and make decisions around our personal finances.
Define Financial Responsibilities: clearly define financial responsibilities to avoid misunderstandings. Decide who will handle specific aspects of your finances, such as bill payments, investments, or tracking expenses. This ensures that both partners actively contribute to managing your financial affairs.
Emergency Fund and Insurance: build an emergency fund together to provide a financial safety net for unexpected expenses. Even if you’re not making a lot of money, or if you have other debt, it’s important to put aside money to help build your own rainy day fund. Additionally, consider obtaining life insurance and other forms of protection to secure your financial future and provide peace of mind.
Plan Regular Money Dates: schedule regular “money dates” where you can sit down and discuss your finances. Use this time to review your budget, track progress towards goals, and address any concerns or adjustments needed. Creating a routine helps keep financial discussions proactive and less stressful. In the beginning, especially when we had to pull our way out of debt, Kurt and I would meet every two or three weeks. This helped to ensure we were sticking to our budget, chipping away at our debt and more importantly, it helped make sure we were on the same page.
Compromise and Flexibility: financial decisions may require compromise. Be open to finding middle ground and adapting your plans as circumstances change. Flexibility is key to navigating unexpected financial challenges and ensuring your relationship remains resilient. This also means compromising when it comes to spending for fun things. Being a very frugal person, I appreciate that Kurt will encourage me to spend some of my hard earned money on myself. Over time, I’ve seen that spending money for professional development, wellness, or other treats helped me grow personally and manage my mental and physical health.
Invest in Financial Education: consider investing time in learning about personal finance together. Attend workshops, read books, or take online courses to enhance your financial literacy. The more knowledgeable you both are, the better equipped you’ll be to make informed decisions. Before we purchased our first home, Kurt and I took a free home buying workshop in the city. While we didn’t know what to expect, together we learned so much and were prepared financially and emotionally for the home-buying process.
Celebrate Financial Milestones: it’s so important to acknowledge and celebrate financial milestones, whether big or small. Celebrating those small wins, even if it’s paying off a debt, reaching a savings goal, or making a significant purchase, recognizing your achievements strengthens your financial partnership.
In the journey of love and life, navigating financial decisions together is a significant aspect that requires collaboration, understanding, and open communication. By implementing these top tips, you can build a strong financial foundation that enhances your relationship and paves the way for a secure and prosperous future.