In the beginning of a budding romance, finances can be the farthest thing from your mind. Before you take things to the next level (i.e. moving in together), it’s imperative to get on the same page about how the two of you will approach spending, saving, debt, and budgeting as a couple.
And perhaps for sound reason. In an Ally survey of 1,400 Americans 18 and older, 36 percent who are married or in a serious relationship cite money as the number one cause of stress in their relationships. So, it’s no surprise that important financial conversations often get set aside.
To help set the two of you up for financial bliss, here’s how to have the talk with your partner and what to say.
First, find the right time, right place.
Finances are not the kind of thing you want to bring up on the first date. As soon as the relationship turns serious and you begin discussing long-term plans together, that’s a good sign it’s time to have the talk. If you find yourself way past that point, just remember it’s never too late to bring up the subject. The key is to just start communicating.
Most experts will agree it’s best not to leave these conversations to the last minute when one or both of you are already feeling stressed – let’s just say the night before the wedding might not be optimal.
But how do you weave a topic like finances into conversation? Here are a few tips to help you get started:
- Stay calm and approach your partner at a low-stress time.
- Be honest (if you aren’t, it will only cause problems down the road).
- Get detailed (this will help you both figure out solutions that work).
- Talk about family (be candid about how parents, siblings and others play into your financial picture).
- Talk regularly (establish a comfort level of talking about finances in both good times and bad).
Now that you have a good idea where and when to have the conversation, the next (and probably the trickiest step) is finding the rights words. Here are six questions to ask your partner. You may want to just start with one or two… and see how it goes.
What to say…
#1. What are our shared financial goals?
A smart place to start is to sit down together and figure out what you want to do with your money (build a safety net, add to our savings, start investing) and how you’re going to do it. Understanding the backbone of your financial situation—in other words, what’s important to you both and what isn’t—can help the two of you ease into other important money talks.
#2. Does it make sense for us to share bank accounts?
To combine or not to combine, that is the question. Separate accounts allow you more financial freedom with your own money, while joint bank accounts give both partners access to funds. But joint bank accounts can cause issues if you aren’t communicating your spending habits with your partner. Can’t decide? Some couples choose to have both.
#3. Tell me your debt situation, and I’ll tell you mine.
It’s important to understand the debt that’s coming with the relationship since it can impact things you may want to do together, like purchase a home or a car. So now’s the time to lay it all on the table. Talk about how you’re going to navigate yourselves out of debt together. Remember, being open and honest with each other now can help alleviate financial stress down the road.
#4. How are our credit scores?
A credit score is one of the most important factors in getting a mortgage, and you should take a good look at your scores. Establish some tactics to improve or maintain them so getting a home loan can be crossed off your list of worries.
#5. Should we get consider a pre-nup?
Yowza! The term pre-nup can be an uncomfortable one to drop into conversation, but it’s, at the very least, a worthwhile discussion to have. Statistically speaking, divorces are common (about 40 to 50 percent of married couples in the United States get divorced, according to the American Psychological Association), so tackling this issue early on is a good idea. If you don’t want to spoil the pre-wedding excitement with a pre-nup, post-nuptial agreements are also an option.
#6. When do you want to retire?
Your golden years may seem like a long way off, but the sooner the two of you establish your long-term plans, like what your retirement goals are, the better chance you have of attaining them. Start this new chapter by setting an ideal retirement age and savings amount and lay out a roadmap of how you’ll get there.
Keep in mind, drilling your partner with all six of these questions at the same time might be a bit overwhelming. Consider starting with one or two instead, and save the rest for another day. If you can get through all these questions in one setting without freaking out, however, it could be a good sign that the two of you are on to something.