When my now husband and I first got engaged, I knew money would be an issue.
Not because either one of us had a particularly large debt, or were “bad” with budgeting. On the contrary, it was more that I love dealing with and talking about money, and I knew I wanted to be 100% in charge of ours.
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Obviously, we would need to have a talk about that.
It sounds easy, but when push comes to shove, the conversation can be awkward. Jackie Black, PhD, BCC, relationship expert and author of "Couples and Money: Cracking the Code to Ending the #1 Conflict in Marriage," and LearnVest Director of Financial Planning Stephany Kirkpatrick, CFP®, gave us some important pointers on the best ways to have the money talk, what topics to cover … and why it’s so important in the first place.
Why You Need to Talk About Money
“People’s pasts deeply affect, and continue to influence, their financial presents and futures,” explains Dr. Black. “Values, beliefs, attitudes and behaviors related to money significantly limit people being able to talk about it and make good choices.”
After all, a talk about money is rarely just a talk about dollars and cents—it’s a more intimate reveal of beliefs and values, expressed through how you spend.
Don’t believe us? Consider this question: Is private college tuition worth it? Most couples could debate for hours about whether they're gunning to send their kids to a an Ivy League or a state school (or whether they'll foot the bill for college at all), and decisions like that have a big impact on where you put your money and how much of it.
Plus, says Dr. Black, the way you manage money with your partner is a mirror of the ways you handle (or don't) all kinds of issues in your relationship. In fact, the more a couple disagrees, the higher their chance of divorce: A 2009 study found that couples who disagree over money once a week are 30% more likely to part ways than couples who have those same disagreements once a month.
Knowing that, it's high time you had the conversation. When you do, here's what you need to get on the same page about.
The 6 Types of Money Conversations to Have
Dr. Black categorizes money conversations into six types. Even conversations about building a life and having a family fall into these categories. According to her, there are virtually no goals, hopes, dreams or decisions that couples make that are not in some way related to money, so there are key questions to ask.
- Earning: This is the time to discuss whether or not you both plan to have a job, for how long and whether each of you (or one of you) wants a career. If you want kids, who will take care of them?
- Spending: You'll want to decide what your priorities are: Whether you’ll spend money on private school, traveling outside of the country or taking care of aging parents. Is there a dollar amount (say, $300, above which you want to check in with each other before buying something?)
- Accounting: How will you keep track of your bank accounts, the money that's going in and out, and have an awareness of your overall net worth? Will you have a budget, and how will you divide the financial tasks in your relationship?
- Saving: How much savings do you each want to have on hand? Are you naturally "savers" or "spenders"? What goals are you saving for, and what do you want to spend that money on?
- Investing: Do you want to put money in the market? This is a discussion about your risk tolerance, different views on how best to invest, or whether to do it at all.
- Building Wealth: Finally, you'll want to talk about how to make your money grow. How much will you need, collectively, to retire comfortably or put kids through college, and what will your mindset be in terms of how you’ll spend your wealth?
The Trick to a Successful Money Talk
In LearnVest and Chase Blueprint's free webinar, The Money Talk, LearnVest Director of Financial Planning Stephany Kirkpatrick advises setting aside time on a weekend morning or afternoon—so you’re not tired or cranky after work, especially since studies have shown that we’re a lot worse at hearing other people’s opinions when we’re tired. It’s also a good idea to have some food, because those same studies have shown that we’re better at being patient and making decisions when we don’t have an empty stomach.
Not every talk needs to be a summit, but you should be talking about money with your partner at least once a month. If you’re uncomfortable starting the conversation, Kirkpatrick recommends the following openers:
- “I was reading a story on this financial website the other day and saw this webinar—it was all about how couples are supposed to talk to each other about their money situations, and I realized that we should probably have that conversation.”
- “I was thinking that I could answer any questions you can think of about my money situation, and I could ask you a little about where you stand, like what the big things are you’re saving up for and what your main priorities are with your money.”
- “You’re really good at investing/saving/balancing your checkbook, and I’d love to be the same way. I am wondering if we could talk about how you got there.”
- “What do you think about my spending habits? Is there anything you wish I would change?”
For more information on topics including knowing where you and your partner stand financially and what to talk about before you combine accounts, be sure to check out LearnVest and Chase Blueprint's free webinar, The Money Talk.