If you haven’t yet thought about having the money talk with your partner, you’re not alone. At this point, money is almost seen as more taboo than sex, politics, or religion. However, it’s no secret that money leads to a lot of heartbreak in relationships. With close to 90% of divorces stemming from money issues or financial infidelity, learning how to talk about finances with your partner, especially early on, is key to the success and longevity of your relationship. From our experience giving financial consultations with couples, we’ve learned that many couples wait to discuss money until they’re about to make a joint financial decision, but we would strongly urge you to have these conversations sooner rather than later. The reason? Imagine this: You’re going to buy a car or a home with your significant other. The lender pulls your credit reports. And that’s when you find out your better half has a credit score of like, 2. (Ever-so-slight exaggeration on the score, but you get the point: that is not the moment you want to find out about your partner’s shoddy credit history.) Or maybe you’re in honeymoon bliss after the wedding and then find out your new partner actually has a huge student loan to pay off or has maxed out his/her credit cards. While this debt may not be your responsibility per se, it will affect the life plans that you may or may not have been diligently keeping in your journal since age 7. Talk about a buzzkill.
So, hopefully, we’ve convinced you that having the money talk is one of the most important (and ongoing) conversations you’ll have with a partner, but now, where to start? Every couple is different, especially because money is a deeply personal and sensitive topic. While there is no one-size-fits-all approach, we’re both in long-term relationships (6+ years) and have been able to navigate the topic successfully so far. Basically, we kind of know what we’re talking about.
The timeline we both followed for our relationships may be a little different for you and your partner, especially based on when you plan to move in together and make joint financial decisions, but this will give you a general overview and questions to consider.
0-6 Months (Or Newly Dating)
Every relationship moves at a different pace, but for both of us, the first six months of our relationships were just about having fun. We didn’t get into the nitty-gritty, like exchanging credit scores or bank balances (chill out, Meredith Blake), but being attentive to details during these beginning stages can tell you a lot about how a person manages money. None of these observations are inherently good or bad, but picking up on habits and behaviors can tell you a lot about a person’s relationship with money without doing a whole interrogation-style line of questioning. Some things to pay attention to:
☆ Does your partner ball out on payday and then live on Top Ramen for the rest of the month?
☆ Does your partner pay for everything with cash or credit cards?
☆ Does your partner say “yes” to every invite, trip, or activity, or do they decline occasionally to focus on other goals?
☆ Does your partner buy a new outfit for every event?
At the beginning of her relationship, Lauren asked her partner a ton of questions about every aspect of his life. Sounds a little intense, but, evidently, it didn’t scare him off. When it came to money, by asking questions about what his childhood was like, what his high school/college jobs were, what scared him about the future, etc., she learned a lot about his approach to money before they had any “official” conversations.
At the beginning of a relationship, you should definitely focus on having fun and getting to know someone, but you can still learn about their approach to money just by paying a little attention.
6 Months-2 Years (Getting Serious)
Around this time, we both started to open up a little more about specifics with our finances. For instance, if you read our previous articles, you’d know we both love to travel, and it was important for us to have partners who enjoyed doing so as well. About a year into their relationship, Lauren and her partner were planning their first international trip as a couple. Lauren’s partner was stressed about booking because he’d been been feeling stretched thin with always agreeing to go to all of the happy hours, dinners, etc. that she wanted to do. This led to them both breaking down and sharing their budgets to figure out what they could each afford to do and how to allocate funds.
This also ties into one of our most important money principles: spend freely on the 2-3 categories that you value most, and cut costs as much as possible on the things that you don’t. This is important in your relationship as well as your personal spending. By sharing our entire budgets with our partners, we learned more specifics, such as each other’s incomes and how much we were paying for student loans, but more importantly, we learned more about what the other person valued spending money on. Learning this helped us cut costs in other areas—like, while we wanted to try all the best happy hour spots in Seattle, our partners didn’t prioritize that. So we learned to start cooking at home with our partners to get that quality time, and Lauren and I still hit up all the happy hours…without the guys.
3 Years (Or Before You Move In Together)
We each moved in with our partners three years into our relationships. We’ve always believed that moving in together should never be about convenience, saving money, or anything other than wanting to start a life together. So, before we each moved in with our S.O.s, we wanted to lay everything about our financial health out on the table.
We made sure that our partners were comfortable with this, then we set a date and made sure to have a great bottle of wine ready to go. Trust us, the money talk can be uncomfortable at first, so you’ll want to make it as fun and relaxing as possible.
During these conversations, we kept track of EVERYTHING that the other person could possibly ask about finances.
Credit Score: If you need a great place to find this information, Credit Karma is our go-to. Many people confuse a credit score with a credit report. You can check your credit score for free and as often as you like, without impacting your score. A credit report is what you can only check for free once a year. If you want to know more about the difference between the two, check out this Hello HENRYs post.
Salary: Obviously, your annual income. This is also a great place to list any bonuses or additional incentives that are part of your total compensation.
Assets: This is where we listed all of our accounts and the balances in each. Checking accounts, savings accounts, 401(k), investments, real estate, etc. Anything that has a value and that you personally own. It’s helpful to break down each asset, as well as include a total. That way you can understand how your partner’s assets are allocated.
Seeing the breakdown can help you to have important conversations, such as whether he/she is risk-averse versus opposed to investing, if they have been saving for retirement, etc. Then you can come up with an approach together.
Debts: In this section, we listed any money that we owed to someone else. Student loans, car loans, medical bills, all credit cards (plus the balance on each). Even if the balance is zero, it’s still helpful to know how many cards your partner has and their overall history on each. For example, you may just have one credit card for emergencies, while your partner is the type to open a new account just to save $10 at Pottery Barn. Again, no judgment on either—it’s just important to understand how you both differ in your approach to credit.
Net Worth: This number is determined by subtracting your total debts from your total assets. Ideally, this number should be positive. If not, you should understand why and be actively working to increase it every month. Net worth is the single most important indicator of your financial health and well-being. So many people assume a person’s income is the most important predictor of their financial future, but this is not the case. Let’s say your partner is making $250K a year but has a negative net worth. There may be valid reasons for the difference; maybe your partner has student loans that resulted in a higher-paying job but will take some time to pay off and get out of the negative, whereas you have no student loans. However, if your partner is simply spending more than they make, you may need to have a bigger conversation about how you can get on the same page and not live beyond your means.
4 Years + Beyond
A year after moving in together, Zach and Lauren bought their first home and have continued to have open, honest conversations about money. They have a finance “meeting” on the calendar every three months, which may seem intense for some, but for them, it has prevented many disagreements about money. During these meetings, they continue updating the same spreadsheet that they used before they moved in together with all of their debts, assets, etc. It’s been really cool to have a log to see how far they have come with their finances over the past two years.
Even if you aren’t in a serious relationship, we would strongly suggest keeping a similar spreadsheet for yourself to track your progress and to easily see which areas you want to focus on!
And that’s pretty much everything you need to know about how to have the money talk with your partner, no matter what stage your relationship is in. The important thing is, once you’ve started the conversation, it’s never truly over. Continue to have honest and open communication to avoid any surprises later on.
Images: Kelly Sikkema / Unsplash, Giphy (4)