The First Money Talk with Your Partner

The When and How of a Conversation Every Couple Needs to Have

At some point, as a relationship grows and becomes more serious between two people, questions begin to arise about long-term plans, particularly as it begins to become clear that at least a significant portion of two lives are going to overlap and become one.

For my wife and I, these discussions started about a year before our wedding. We just talked casually about things, such as merging checking accounts and saving a lot in our supplemental retirement plans. We mused about kids a bit, with a general consensus of waiting for a least a year after our wedding.

Big mistake.

For most of the first few years of our marriage, our financial planning and organization was chaotic at best. We were often doing things in completely contradictory ways, like making separate grocery lists and both shopping on our way home from work, or refusing to budget or merge checking accounts because we both wanted control. We made the mistake of not talking these issues out and figuring out a way to make things work for us and, as a result, we created our own fallow earth where only seeds of financial disaster could take root.

Here’s what I wish I had done.

Figuring Out the Right Time to Talk

There is no simple rule to determine the exact moment to have that first financial heart to heart. The real key is figuring out when the time is right for you. Here are some indicators that you should schedule that talk sooner rather than later.

You’re personally holding off financial plans because of the other person

For example, are you thinking about buying a new car, but are waiting to see if the relationship progresses before making that choice? Are you thinking of moving to a new apartment? Maybe you’re even postponing an important decision about your career. This is a sign that on some level you’re thinking very seriously about the long term with this person, and that means it’s time to start talking about that long term.

You’re left feeling uncomfortable on a regular basis by the other person’s financial habits

Does your partner spend more than you like? Is he or she too much of a tightwad? Does that person not take the appropriate time and effort to manage the details, like making sure that overdrafts don’t happen? If these issues are cropping up and bothering you, it’s time for a talk.

Your spending and your partner’s spending are less coordinated than they should be

This is something that was a clear warning sign for my wife and I as we got closer. We’d both stop on our way home from work and buy milk, winding up with two gallons in the fridge (and one usually going bad before it was finished). We’d both buy stamps. We used to have to pay rent at an office and, more than once, we both went to that office and paid rent or the month. This is a sure sign that something’s out of whack and it’s time for both of you to get on the same financial page.

You’re about to be faced with a major financial issue or milestone

If your relationship is serious and you’re about to be met with a major crisis, like an impending pink slip, a huge financial settlement, or a job offer in a faraway place, now is the time to have a serious talk with your partner about your shared future.

You’re about to make a lifelong commitment to each other

If nothing else has triggered a money talk, an engagement ring should. If you’ve committed to marriage, one of the first things you should work out about your future lives together is how the money should work.

Do Some Prep Work

Don’t just sit down at a meal with your partner and say, “Let’s talk about money.” That’s not fair to either one of you, and you’re likely to come out of such a discussion at least as unclear as you were before. Here are some tips for making it work.

smart

Do some reading first

If you’ve never read a David Bach book, Smart Couples Finish Rich is definitely a worthwhile read. Head down to your local library and check it out, then encourage your partner to give it a read, too.

Compile your own “financial balance sheet” and have your partner do the same

Get the balances on every account that you hold – both debts and savings – and make a list of all of them. Subtract your debts from the money you have to get an estimate of your net worth. This is a great way for you to get in touch with your real situation, and having the opportunity to show this to your partner – and have your partner do the same – will be a really valuable eye opener for both of you.

Schedule time

Plan for a couple hours (at least) for you to talk about things. Don’t do it impromptu – give yourself and your partner some time to get the needed information together and to spend some solitary time thinking about goals and desires.

Make a list of the stuff you want to cover

Both of you should do this, making separate lists. Think of every money question you have that concerns you and write it down, then use that list as an effective agenda. Your partner should do the same – just list out everything, then use it as part of the agenda for the talk.

Tips on the Talk Itself

Most of the general tips for a talk with one’s spouse also apply here:

1. Start off talking about goals.
2. Admit your own mistakes.
3. Look your spouse right in the eye, and hold their hand.
4. Be goal-oriented.
5. Look at numbers – but don’t judge.
6. Be fair. If/when your spouse admits to overspending, don’t blow up at them.
7. Create goals that you both agree on.
8. Create plans to reach those goals.
9. Agree to talk about it regularly.
10. Do something romantic afterwards.

Since this is really the first time you’re talking about money in a serious way, a few additional tips are in order.

Figure out who the “money leader” should be

In most relationships, one person is usually responsible for making sure the bills get paid on time and other such basic financial tasks. Figuring out which one of you will do that early on will save a lot of pain later.

Lay your complete financial situation on the table

Yes, even that credit card debt you haven’t mentioned to your partner yet. Everything. Soon, you’ll be in a situation where a windfall can lift you both and a debt can sink you both – be open about all of it.

If you don’t understand, ask

The key to a good relationship is good communication, and if you can’t ask questions about things you don’t understand, you’re revealing another potential problem. Don’t hesitate to ask a question if you’re seeing something that doesn’t add up.

Talk about the major financial obstacles that you see in the future

Where do you want to live? In what kind of domicile? Do you want children? Do you want to retire early? Do you want to work independently? What things do you envision for your future that will affect the life choices both you and your partner will have to make? Lay it all out there and just flesh it out – the conversation will lead itself.

Go through all of the questions you prepared in advance

Those questions will lead your discussion in healthy directions – follow where they lead you.

Don’t walk away with hurt feelings

There are a lot of ties between money and emotions, and you’re probably going to get your hackles raised more than a time or two during this talk. Afterwards, do something together that’s very separate from the topic as a way to heal. Just spend some good, quality time together and don’t let any hard feelings that came up during this talk fester into something worse. Work through them, and remember that you do love and care for this person even if you’re not on the same page yet when it comes to money.

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  1. Foxie says:

    While I agree wholly with all of your points, it’s also important to realize that the first money talk should be only one of many ongoing conversations about money with your significant other. I think sometime during the first talk you should agree on a set time each week, month, etc. to revisit money and make sure you’re either still on the same page or are getting closer. My husband and I are still working through all the money stuff, even after a full year of marriage. One of the more frustrating things for me is when it seems he doesn’t have an interest in where all the money really goes, so even if you decide who does make sure the bills are paid, it’s also key for the other to stay involved.

  2. No Debt Plan says:

    This is huge issue for newlyweds. We got married in January 2007 and talked about money well before then. We knew what was going to happen after we were married, and how we would manage the day-to-day finances. A lot of couples just assume all will be well, but like you said you can end up going in contradictory ways.

    I support merging all accounts and giving each partner a certain % “free money”, even if it had to be in cash or a separate account. This way 95% of the money is managed as a team, the other 5% is split between the two and you can do whatever you want with it.

  3. Heidi says:

    Excellent advice. My SO and I put it out there long ago, and it’s one less thing that we have to worry about as we plan our wedding.

    I agree with Foxie, that it’s important to note that this should be an ongoing discussion. Where my partner and I slip up is we go months without updating each other on things (he can read about most of my activites on the blog, but I have no way to know how he is charting towards his goals unless I ask – plus, there are some things even I don’t write about).

    Getting those brutal student loan and credit card debt discussions out of the way is the hardest part – forming a plan for getting rid of that debt is the fun part (really, it’s a huge relief to have a plan!).

  4. Saving Freak says:

    We went through financial counseling our first month of marriage. This got us on the same page financially and we have never had a fight about money. The church we attend now makes it a STRONG recommendation that people go through counseling on finances before and after they are married.

  5. Heather says:

    This is really great advice and I appreciate it being laid out in a way that is managable to follow. This will definitely help when the time comes for my SO and I to sit down. Thanks!

  6. Scott says:

    One question I’ve had about the money issue (and about relationships in general) is how do you safeguard against the unfortunate event that the relationship comes to an end without making it look like you’re expecting that outcome?

  7. MES says:

    I agree that is an ongoing process. Don’t assume that the plan you make on Day 1 is the plan that you must stick to years down the road. For us, merging finances was very a slow process that we’re still refining 15 years later. When we moved in together, we paid our own credit cards and student loans and split the household expenses 50-50, even though I made significantly less money. When we realized that I had about $10 of spending money after bills, we went to a percentage system based on our earnings. Only after we did that for a while did we actually open a joint account. We have a much, much different system now, with the joint account getting most of the money and each of us getting an equal allowance. I would have been very uncomfortable merging finances this much in the beginning (pre-marriage), but it works for us now. So don’t feel like you need to merge completely or stay completely separate. There are so many options in the middle.

  8. My.cold.dead.hands says:

    This will sound harsh, but I don’t believe that this is a topic that has a lot of room for compromise, money habits, spending habits whatever are very much a part of who we are and how we see the world around us. Trying to get someone to change their habits to match ours or ours to match theirs will not likely work for the long haul, because for better or for worse, there is a reason that we do things the way that we do.

    I believe that it’s better to be with someone that you are in harmony with from the start. The transistions will be more organic that way.

    You don’t have to be crass and ask the person about their finances, but during the dating process you should be able to pick up on 80% of their “money personality”, i.e. do they save up for things, spend like there’s no tomorrow, skimp at times when they should be able to relax, demand the latest toys ect.

    Once you’re at the point of contemplating marriage there should be no take-your-breath-away type suprises. Maybe you were’nt aware of a detail here or there, but you should have some idea of where they land on the map.

    I don’t remember who said it, but I believe that a saver should never marry a spender, every plan you have to get ahead financially they will find a way to torpedo it.

  9. 60 in 3 - Fitness and Health says:

    Great advice Trent,
    My only comment is that you don’t really need to have a finance “leader” in your relationship. My wife and I split the bills equally (she pays the power and water, I pay the phone and internet for example) and have merged some expenses while keeping others separate. Each couple will find a different way of doing things as long as they communicate openly and honestly.

    I think that’s the best advice you gave here. Talk to your spouse or partner. Talk often and talk openly. If you can do that, most problems will work out quite easily.

    Gal

  10. Lisa says:

    We happen to prefer pooling our money. But this has led to many discussions over prioritizing what we use the money for. One of us is more frugal than the other, and i won’t say which! We went to a financial planner, and also a marriage counselor. Both helped us tremendously through those initial hurdles. I’d say we have gotten on the same page at last, even with our differences. It took ALOT of open communication.

    Lisa

  11. Aryn says:

    My husband and I were together for several years before we got married, so we were completely familiar with each other’s finances by then, but we still make a point to talk about our money and our choices. We also decided before we got married who would be in charge of which aspects after we got married. He does the bills, I do the investing and taxes. It’s a system that works well for us.

  12. Andy says:

    This is a great article. My girlfriend and I are moving in together soon, and we are pretty sure we will split all expenses down the middle and keep our finances separate. But it would probably be a good idea to really hammer out the details soon.

  13. Somehow, for us, it was easy, even though we never had big talks. I enjoy investing and managing our portfolio, he doesn’t. He earns well, I don’t. So he brings in the paycheck, I invest some and spend the rest. We like to say that he’s in charge of making the money, and I am in charge of growing it and spending it.

  14. Michelle says:

    My fiance and I are going through this right now. I have to admit I have blown up on him on occasion for the way he manages his money. It doesnt matter to me that he earns less, but it does matter that he has no idea where his money goes and has no goals that he works toward. He has some debt and basically no savings, yet he has cash laying all around the house. He doesnt overspend, he just doesnt pay attention, which drives me nuts beause I am a detail person. I have a feeling the best way for us will be to merge our incomes with me being the leader and each of us getting a set amount to spend on whatever. Good suggestion, Trent

  15. danielle says:

    Kevin and I started out with nothing so we merged from the getgo. One we got engaged we opened a joint checking acct, combined our credit cards (and killed 6k in debt in 6 mos at age 24) and started investing as JTWROS.

    What’s mine is his, what’s his is mine. I am one of those people who strongly feels that a true strong marriage means everything is “ours”.

    We have never had a money fight (no joke) and our finances have been merged since late 1999 when we got engaged. We always have an open discussion for anything over $100 besides groceries and fixed costs.

    Our only separate things are our Roth’s, 401k’s- for obvious reasons, and a paypal account I use for ebay and buying and selling cloth diapers which is worth about $100. LOL.

    I definitely manage the investments and finances which is fine by me. DH makes 3 1/2 times what I do, so I am like Vered@momgrind- he earns it, I manage it!

    We also talk about our financial and personal goals every quarter and hold a “State of the Union” where we discuss, over lots of wine, where we are with each other. 12 years together total and no fights, that happens not by luck but with lots of communication!

  16. Dee says:

    Re: Making a list of all debts

    I would opt for an actual credit report instead of trusting the other person to provide an accurate list. It might put someone off (as an indicator that you don’t trust them), but I would much rather be safe than sorry and know the real amount of debt that my partner owes. There are too many tales of people who only find out much later how much debt their spouses are in and by then, it’s a bit too late!

  17. Miranda says:

    This is a great post! And, as has been mentioned above, money talk should be ongoing. My husband and don’t talk much about money; it is still a bit stressful. But if something big comes up, we do talk about it and re-adjust.

    We pool everything together, and have since we were engaged. It works well for us, due to our spending habits. We both get what we need, and some of what we want. And if there’s something we both want, that is expensive, we get down to brass tacks and talk about what we need to do to get it.

  18. mal says:

    Great points . . . my bf and I need to really sit down and discuss our finances. I really have no clue what he spends his money on although I do know his annual salary.

  19. j says:

    thanks for the extended answer to my mailbag question :) while i have no idea what my boyfriend and i will decide to do, i know that i am waiting for him to make my next financial moves, so the discussions need to begin soon.

    thank you for the comments as well – it’s so interesting to hear that there are options. my parents do everything together and my boyfriend originally assumed we would join finances, but i am not comfy with those tactics yet. i like a lot of the “inbetweens” mentioned above.

  20. My girlfriend knew what’s up after our first year. Here we are in our 4th and talking about marriage. Being on the same page early on saved us both a lot of money.

    A married couple should always have the same accounts. All money goes in one bucket and together it is pulled out. I make more money than her (a lot more) but she has a wealthy family and a trust. When we’re married, WE will have a good salary and WE will have a trust from her parents. Keep it simple and focus on the love (and her new puppy!).

  21. !wanda says:

    @Scott: I think you can introduce topics that concern that situation without stating crass questions outright. My partner and I have had successful discussions about that by framing the discussion as, “What do you want to do with the finances if I get run over by a bus?” Also, he’s seen two of his good friends break up after living together for 7 years and owning property together, so we’ve discussed how they split their stuff afterward (quite amicably, actually, although the emotional stuff was a train wreck). Other than that, I’m trusting the fact that he’s basically a good-hearted and rational person and unlikely to pull anything dramatic, vengeful, or overly unfair.

    Personally, I’ve seen my mother stuck in a hateful marriage because of her finance fears. I’ll probably always keep my own stash somewhere, enough to buy a plane ticket and take care of my basic needs for a few months. Paradoxically, I feel that my relationship is more secure this way because otherwise I would feel unhappy and trapped.

  22. Great advice! I wish more couples would have these talks BEFORE they walk down the aisle as this would prevent so many arguments and divorces. Money is one of the top reasons so many couples are divorcing so this post would be gold to so many right now!

  23. guinness416 says:

    “A married couple should always have the same accounts”

    Nope. Plenty of people have separate accounts, and it works for them. Mine and my husband’s chequing accounts have been separate throughout our nine-ish years together, although we do pool our savings.

  24. George says:

    I can see your point in having the same account. However, the deeper issue are the spending habits of the husband and wife. For many people, separate accounts actually helps keep their marriage together. Priorities have to be set as to what they want to achieve. My former boss who was a very successful investor who lived thru the depression said it comes down to spending less than you make. Too many people buy things they don’t need. A joint checking account won’t solve those problems.

  25. Moneymonk says:

    “Look your spouse right in the eye, and hold their hand”

    sounds like what dave Ramsey would say

  26. Monevator says:

    Try talking to your partner about their parents and money… It’s nearly always revealing of secret money hopes and fears.

  27. Empress Juju says:

    Thank you for this post. I’m not even dating anyone seriously right now, but it got me thinking about past relationships, and about how I never had this talk!

    I now think that money should be an ongoing topic from very early on… In a recent flirtatious conversation with a fella, we started talking about camping and cooking, and his eyes lit up when he talked about road-tripping on $15 a day, plus gas…so did mine!

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