Get on the same page financially through better communication.
Money can be a tough subject to talk about. Differences in values, attitudes and financial priorities can make conversations about money a cause of stress and conflict. It might seem easier to put the topic on ice, especially with the added strain of an ongoing pandemic and economic uncertainty. But in difficult times, it’s more important than ever to ensure that you and your partner are aligned and working towards common objectives.
Do it together
What might feel like a daunting task doesn’t have to be if you work together as a team. Break things down into manageable chunks to help get a clear picture of your current financial situation, where you want to be and the steps you need to take to get there. Consider the following:
- Develop a realistic budget that may include short-term sacrifices on both sides to achieve longer-term dreams
- Make joint decisions on how to spend or save based on your financial goals
- Build a financial plan that encompasses short- and long-term objectives as a couple and as individuals
Share your money views and habits
It’s likely there will be places where two people’s current habits, past experiences and future dreams overlap – and points of difference too. But even a super-saver and a big spender can still enjoy a harmonious relationship with each other. Steering clear of judgment and maintaining an honest, back-and-forth conversation makes it easier to find common ground and negotiate differences.
Here are some things you and your partner might want to open up about.
Family influence and financial upbringing. How your family dealt with money can have a big influence on your own saving and spending habits. Understanding each other’s financial upbringing can help bring clarity.
Financial goals. It’s always a good idea to know what you’ll need money for and when. Maybe you want to buy a house, have a baby, take an annual vacation or go back to school. Talking about your individual and shared goals is a great way to lay the groundwork for a financial plan.
Your top financial priorities. Perhaps you feel that improving your credit score is your number-one priority. Your partner might put contributing to their retirement fund at the top of their list. Understanding each other’s priorities can uncover differences and similarities and help frame your strategy.
Money worries. When it comes to your finances, talking about what keeps you up at night can shed a lot of light on what each of you cares about the most. Sharing your worries is also a perfect way to get things off your chest and come up with a plan to tackle your concerns.
Best and worst habits. Let’s face it, you will both have opinions on how the other manages money. Ask each other, What’s my worst money habit and what’s my best money habit? This exercise can go a long way in helping you both develop better money management skills, as well as discovering how your strengths might complement each other.
Planning for the unexpected. There’s never a bad time to implement a plan for the unforeseen. In fact, if the last two years of living through a pandemic has taught us anything, it’s that we never know what’s around the corner. Building up an emergency fund, as well as making sure you have the right type of insurance in place, is a good place to start. You may also wish to create or revise your estate plan.
Pandemic effects. Chances are the pandemic has had some effect on your financial situation. This is the perfect time to consider whether it’s time to revisit your priorities or revise your strategy for the future.
Open to differences
A solid foundation of positive communication about money can be helpful in building a future together. Being open and accepting of each other’s individual goals, as well as establishing joint goals, can bring you closer as a couple and increase your ability to reach your financial objectives. Being on the same page as your partner is also advantageous when working with your advisor, who can recommend more finely tuned investment and protection strategies for both of you.
Kick-start a dialogue
Not sure how to start the money talk with your other half? Here are some ideas on how to get started:
Block off an agreed-to time. Whether it’s half an hour every other day or an hour each week, set aside a time that suits both your schedules. Treat these meetings as legitimate appointments, not to be interrupted by phone calls and other distractions.
Set a topic for each meeting. Attempting to address your entire financial life in one session could be overwhelming. You may want to focus on your budget first, then your short-term and long-term goals, then your debt, then wills and powers of attorney.
Come prepared. If you’re talking about your budget, get out your monthly bills, bank account statements and a calculator. If discussing investments or insurance, make sure you have your statements or policies on hand.
Write it down. Keep a record of what you discuss to help you envision your strategy and track how you are doing later. You can also use these handy worksheets, or create your own, to help you plan and organize your finances – whether it’s budgeting, estate planning or goal setting.