The money talk is one of the most important conversations to have yet it is one of the most avoided ones. Hardly anyone likes to talk about money.
A Wells Fargo survey found that talking about money is more difficult than talking about religion or politics. Of course, this was a 2014 survey so maybe politics has replaced money at the top of the list.
A more recent Ramsey Solutions survey revealed that the number one topic that couples avoid and fight about is money. The larger the debt, the more likely the couple is to find themselves in arguments. The survey also found that almost two-thirds of marriages begin with debt.
Talking about money before you hook up your lives is imperative. It will not only build a healthy foundation for the future of your relationship, but it will save you from potentially stepping into a relationship that is going to be toxic due to intractable money differences.
When Should You Have Your First Money Talk?
Your first date is not going to be the time to delve into issues about money. Maybe not the second date either. But as soon as the vibes between you seem to be gaining strength and you start talking about moving in together or getting married, you need to have the money talk.
How to Do It
Set a date and commit that you will spend this time discussing money. Keep it comfortable and relaxing like all the other conversations you had as you were getting to know each other. No one should feel stressed or forced into it.
You might want to be in a more private setting, so you are not distracted. And if talking about money at all is difficult, a more intimate setting will allow you to give or receive the emotional support needed.
Begin with Your Life Goals
Sharing your life goals will naturally lead you to a conversation about money because your life goals require funding. For instance, do you want to have children? How many? Will you both continue to work or will one of you stay home? Where do you want to live once you have children? Do you want to buy or own your home? What about college expenses?
Discussing these issues will open a door to understanding how each of you feels about spending money, handling debt, the importance of investments and other financial issues. The conversation will reveal how your intended relates to money which is key to your compatibility and longevity as a couple.
Finding out that the other person has a completely opposite way of relating to money than you do is not necessarily a recipe for disaster. What is important is to discover if there are places where change can occur. For example, let’s say you are careful about spending. You prefer as little debt as possible, like to pay your bills on time and want a savings account. If your intended likes to live like today is the last day of life, has no problem with debt and doesn’t even think about saving money, this could be a disaster. You need to get to the root of why that person has these money personalities. It could be a lack of financial literacy. It could be that this is what they experienced growing up as a child. Is he or she willing to change how s/he relates to money? Can you find common ground?
If the answer is no, then you should reconsider whether you want to move forward with the relationship.
There are other opening topics, such as do you want to travel? Where? How often? Will we work while traveling, or will we take a sabbatical? How will we pay for our travel?
What about retirement? How soon do you want to retire? How will we pay for it?
Your Future Partner’s Financial Health
It is critically important that both of you honestly share your financial condition. According to the surveys, an astonishing percentage of couples report that serious financial information was kept a secret, such as debt. At a minimum, you should both share information regarding:
- Other financial obligations (ongoing financial commitments to others such as child support, taking care of a family member, etc.)
How Will Money and Financial Obligations be Shared?
Will you have a joint checking account? Joint savings account? Will you keep separate bank accounts or some combination (joint and separate)? How will you share the expenses? Who will be responsible for paying the bills, or will you share this task? The answers to these questions will set the stage for an equitable distribution of financial duties. No one will feel left out, disempowered or suspicious.