Throughout our engagement and the first few years of our marriage, Sarah and I never really sat down and had a real conversation about money. We each just more or less followed the pattern we learned from our parents. We dealt with any shared issues that were absolutely required in the briefest way possible.
Needless to say, it didn’t work. Before our third anniversary, our finances were a complete train wreck. We were in debt up to our ears and didn’t have enough money in either checking account – we didn’t have shared accounts yet – to cover our bills.
We simply had to change what we were doing, so we started talking about money. It started with one pretty long money talk split up over several days, as we were both frustrated and upset. Over time, though, we figured out a lot of things that work well for our conversations about money.
Today, we have short conversations about our finances all the time and a longer conversation every six weeks or so.
Throughout all of this Sarah and I have learned a lot of things about what works – and what doesn’t – when it comes to talking about money. I’ve shared these tips in drips and drabs in the past, of course, but Sarah and I have continued to figure out things that really work when it comes to the dreaded money talk.
Here are twenty things to consider about communication and money with your partner.
Have Money Talks Starting As Early As Possible In Your Relationship
The earlier the better. As soon as you start to realize that you’re serious about some form of long-term committed relationship with someone in which assets will be shared in any significant way, you should begin to have conversations about money.
Why? With a money conversation, it doesn’t take long to figure out whether or not the two of you have compatible ideas about how money should be spent and saved. If the ideas are drastically different, you’re going to have a difficult and challenging long-term relationship if you bear any shared financial responsibilities.
Like it or not, some people very much “live for the moment” and spend as though today is their best and only chance to spend it. Others have a deep “save for the future” philosophy, while others simply have a “money is just money, it doesn’t matter” philosophy to things. For the most part, those general perspectives are incompatible.
If you have a different general idea of how money works than your partner does, either one (or both) of you is going to have to have a philosophical change about money or you’re going to have constant struggles and disagreements. While it is possible to change your money philosophy, I’ve found that it takes a deep internal shock to bring about that kind of change and there’s no guarantee how or when this kind of internal shift will happen.
Have an early money talk just to gauge where you both sit. It will do wonders for figuring out if this is a lifelong commitment you want to get into.
Recognize That You Both “Lose” If You Argue
Any time two people engage in a serious discussion that affects their mutual future, they both lose if it turns into an argument. It doesn’t matter who scored the most “points” – all you’ve done is damage the trust between you and make a vital topic harder to talk about in the future.
Disagreements are fine. They’re part of a healthy relationship. No two people are exact mirrors of each other and sometimes you’re going to feel differently about a particular issue. For example, I am much more prone to providing financial help for my parents in moments of need than Sarah is – it’s simply a disagreement we have.
Arguments are a different beast. They’re an emotional conflict in which “points” are scored and both sides feel like they must “win.”
Here’s the truth: neither one of you “win” when it turns into an emotionally-driven point scoring contest. You both lose because nothing really gets resolved, the topic is now more poisonous than before, and both sides are less trustful.
How do you keep a money conversation from turning into an argument?
Establish a “No Yelling” Rule
If anyone raises their voice, the conversation ends. Period. You’ll go back to it in a few days or in a week when emotions have had time to cool.
Raising your voice in a conversation means that you’re straining to raise your ideas and thoughts above those of your partner. It’s a sign that you do not perceive that the other person is listening to you, for one, and it’s also often a sign that you’re not really paying attention to what they’re saying either.
When you start yelling, you’re focusing more on “winning” with whatever points you have in your head. When you’re focused on “winning” rather than coming up with a solution that puts you both on top, then you’re not having a constructive money conversation.
Whenever someone yells, the money conversation should stop immediately and shouldn’t be touched again for at least a day. Both people should spend some time thinking about why the conversation reached that point. What issue pushed it there? Was it really worth the anger?
After that introspection, have a conversation about the same issue again and see if it goes better. It might even take a few times to get there.
Establish a “Time Out” Rule, Too
You might be able to respect the “no yelling” rule, but that doesn’t mean that you won’t get upset or emotionally charged during a discussion. It happens to all of us.
Whenever you’re having a conversation about money and you start to realize that emotion of any kind is coursing through your veins, you’re probably on the verge of making a pretty dumb statement in that conversation.
Simply ask for a time out. A time out means that you’re stopping the conversation for a while – say, twenty four hours. Spend that time trying to figure out exactly what got your blood rushing so that you can address it in a calmer fashion the next day.
It is far better to call for a time out than it is to allow yourself to keep going when you’re angry or upset or sad or combative. Those emotional states don’t lead to a good rational conversation with your partner that solves problems. Those emotional states lead to arguments and “point scoring.”
Have Each Person Identify Personal Changes They’re Willing to Make Before the Discussion
No one exhibits perfect money behavior. We all make poor money choices at least some of the time. We buy things we don’t really need. We don’t put away enough for retirement. We go to the grocery store without a list and find ourselves with several things in our cart that we didn’t expect. It happens. None of us are perfect.
Before you sit down for a money conversation – particularly one of the first ones you have – think about what changes to your spending you’d be willing to make. What could you do to improve your mutual financial standing that wouldn’t fill you with personal misery?
Think about your spending behavior. Think about financial tasks you personally haven’t taken care of, even though you know you should. Think about the things you should have looked into, but didn’t. Think about how you’re saving money for the future.
What can you change? What should you change? It’s much easier to change if the desire to change comes from within you rather than from some form of pressure from your partner.
Be Willing to Admit Your Own Faults and Mistakes
It’s easy to admit your own mistakes privately. It’s much harder to admit them to your partner. However, admitting your own mistakes honestly and apologizing for them is one of the most powerful things you can do in terms of building a strong and trusting relationship.
As I stated above, no one is perfect. We all make mistakes. However, almost all of us prefer to hide those mistakes. We don’t want to be the person wearing the scarlet “A” on our chest.
Admitting mistakes in a trusting and loving environment is helpful because it builds a ton of trust. It provides a foundation for both people to make better moves in the future. It also makes the other person feel safer about admitting their own mistakes.
It can be scary, but don’t run away from it. Once you finally let go and admit errors and commit to fixing them, everything becomes a lot easier.
Have Each Person Make a List of Questions Beforehand, Too
Whenever you’re starting to link your financial life to someone else, there are going to be questions. How much money does he really spend on clothes? How much does she really spend on gadgets? Should we share a checking account? Should we both sign the lease? How far are we really from buying a house? What can we do about my credit card debt? And what about your debts?
When these questions pop into your head, write them down. I often keep a pocket notebook for just this purpose – writing down questions and thoughts that pop into my head. When the time for a money conversation arrives, don’t be afraid to ask these questions. There should never be a fear of asking questions.
At the same time, you should know that your partner is going to have questions to ask about you. If you expect your partner to answer questions openly and truthfully, you should expect that when your partner asks you questions, you’ll answer them truthfully.
The goal of such questions isn’t to score points. It’s to establish information so that you can come up with plans that work well for both of you. It’s hard to make an accurate plan if you don’t have all of the information needed to assemble that plan.
Do Something Fun Together Before and After the Talk
These days, Sarah and I mostly have quick money conversations that fit into our days in a flexible way, but that’s because we’ve already established many of the basic facts about our respective money habits and goals. We don’t need to rehash that material; we mostly just need to figure out specific issues.
Early on, while we were figuring out all of those things, money talks were often stressful. They represented revelations of things we weren’t proud of, discussions of issues that revealed our missteps, and left us both feeling pretty empty.
One approach we found that really helped with this was to bookend a serious money conversation with fun activities. Usually, we would have these conversations during an evening where the children were visiting their grandparents, so we would prepare dinner together and enjoy a nice meal, have our conversation, and then go out to a late movie at the dollar theater (or something similar).
The reason for this was to show each other that there wasn’t a real rift between us, even if it hurt. It gave us a chance to cement our bond both before and after something that could really stress that bond. From my end, at least, it really helped.
Start By Talking About Goals
One great way to start a money conversation is to ask two simple questions. First, where do you want to be in five years? Next, where do you want to be in twenty five years?
Spend some time painting those pictures in detail. If you’re not quite committed yet, just paint the picture under the assumption that you are committed and you’re sharing your life together; if you’re not at the point where that’s a comfortable picture, you’re probably not at a point where a money conversation makes sense.
Fill in all the details that you can. Do you have children? How old are they? Where are you living? What does your career look like? Do you have debts hanging over your head? What have you achieved? What events have occurred over those years between now and then?
This is something that both of you should take part in. You’ll probably develop pictures of the future that have some similarities and some differences. The similarities should be the focus of your plans for the future, but the differences are important as well. Are there goals that you can set that will help you to both achieve unshared life objectives?
Be optimistic, but don’t be unrealistically optimistic. You’re probably not going to be a star outfielder on a major league baseball team. You’re also probably not going to be the CEO of a major corporation. It’s great to plan for those things as goals for yourself, but if you make financial moves assuming outlier-level success in areas you can’t control, you’re setting yourself up for useless financial plans that can’t possibly be followed.
For example, if you have a career in politics in mind, don’t plan everything with the assumption that you’ll be the junior senator from your state at age 40. You can work toward that, of course, but make a financial plan that’s based upon more realistic outcomes that you would still be proud of, such as being a key part of a think tank or being a top campaign strategist for a successful Congressional run.
In those situations, what do the personal finances look like? What kind of future can you build together in the face of optimistic but still realistic goals?
Develop Very Specific Tasks for Both Participants
One major outcome of a money talk should be specific tasks for both of the participants that will help move you both in a direction so that those goals can successfully come to fruition. During the course of a money conversation, both participants should strive to identify things they can do in the near future to bring about the positive financial change both participants desire.
It can be a good idea to formalize this by making a checklist of things to do over the next month. They can be specific tasks, such as signing up for a 401(k), or they can be more general behavioral changes, like only going out to eat once a week. The items simply need to represent changes in behavior from the current situation.
This list of tasks can be the foundation of future money conversations. Each item can be evaluated for success and failure and you can also decide whether that change is actually producing the desired benefits. Sometimes, you might have a great idea for a change but you’ll discover that it really doesn’t produce results!
Talk About How Your Parents Handled Money
If you want to understand how your partner really thinks about money, discuss how that person’s parents handled their money. Many of the behaviors that we witness in our parents are things that we carry forth into adulthood, so understanding how a person’s parents handled money can often be a big clue as to the fundamental reasons behind why a person handles money issues in the way that they do.
How did your parents handle bills? How did your parents save for the future? Did they splurge whenever they had a windfall? Did they buy lots of unnecessary things? Did you have an allowance growing up? Did you have required chores for that allowance?
All of these elements can provide a sense of what’s financially “normal” for a person. It can clue you in to whether money is something you have to work for or whether it’s something given to you. Is it a tool for building a future or is it a tool for immediate pleasure?
Of course, it won’t be an exact match. People are different than their parents. You’re looking for strong influences, not rigid rules. Still, such strong influences can be really revealing and bring you to a deeper understanding of your partner’s connection with money.
Don’t Subscribe to Rules Because That’s What You’re “Supposed” To Do
You’ll often hear “rules” for what a financial couple “should” do based on the successes and failures that the advisor has witnessed. For example, many advisors encourage couples to merge their finances because it adds to the level of responsibility that the partners have, encouraging them both to be smarter about their money.
Figure out why those rules exist and subscribe to them because the reason behind them makes sense and fits your situation well. Don’t just subscribe because that’s what you’re “supposed” to do.
For example, if one of you is struggling with an addiction problem, it can make a lot of sense to maintain separate accounts. Most relationships don’t have this type of concern, but the security against addiction can trump the common rules used in other relationships.
Examine All Financial Statements Together – No Secrets
One big part of a healthy money talk is to put all of the cards on the table so you can develop a clear financial picture. You’re in this together – every debt either one of you has affects both of you. Every ounce of savings affects both of you. Every income stream affects both of you. The cards need to be on the table.
Not only that, these accounts need to be an open book. It’s perfectly fine to have accounts that are only in one name if that works better for you, but they need to be clear to both partners. If you feel better having a personal emergency fund, that’s good, but your partner should know that and should have the freedom to have their own personal emergency fund.
The same is true when it comes to debts. If you have your own credit card for “secret” purchases, that statement needs to be on the table. That debt is going to be affecting the bottom line of your financial situation, so it has to be open.
When you make the choice to hide an account or statement, you’ve already committed to failure. You’ve chosen personal pride over the health of your relationship and that’s purely damaging.
Pair Any Accusation You Make With An Admission of Your Own Fault
When you go through statements, it’s going to be really easy to find the spending and saving errors of your partner. It’s also going to be really tempting to dredge these mistakes out front and center and belittle your partner.
Don’t. That’s a horrible approach to take.
Whenever you choose to point out a mistake that your partner made, pair it immediately with one of your own mistakes. Instead of talking about how your partner has to change to satisfy you, talk about how you both need to make a change to make things better for both of you.
It is never a one-way street. When you try to make it into a one-way street, all you’re doing is guaranteeing conflict and hurt feelings because you’re denying your own faults while pointing out the faults of your partner.
Be Comforting When It’s Hard for Your Partner
Admitting mistakes is hard. No one likes to do it. I know I certainly don’t. It’s much easier to just toss some dirt over the mistakes and not speak about them.
When your partner is trying to work up to the point of admitting mistakes, be comforting. The last thing you want to be in that situation is angry. It is awesome when your partner admits a mistake by their own choice. It is perhaps the surest sign of a great relationship, because it shows an incredibly deep level of trust.
If your partner is trying to build up the fortitude to make such an admission, be comforting. Listen to what that person is trying to say. Put your hand on top of their hand. Look in their eyes. Push every bit of negative feeling or anger or distress out of you.
When your partner admits a mistake, they are doing something incredible and they’re doing it for you. Anger is the worst possible reaction.
Whenever You Don’t Understand Something, Ask
As you go through goals and financial statements together, you’re going to eventually come up against things that you don’t quite understand. What does this line mean? Why do you want to achieve that? What is this $22.92 purchase at Target?
If you don’t know what it is, ask. You should never feel bad about asking.
If you don’t ask, you’re walking away with a limited view of your financial situation. You’re also indirectly telling your partner that you understand – and tacitly approve of – everything in those statements.
If you do ask, you’re improving your understanding of the situation. You’re also implicitly giving your partner permission to ask questions and fill in any holes in their own understanding.
Asking helps both of you.
If You’re Upset, Explain Why You’re Upset in a Calm Fashion
At different points, you might start to feel your blood rising. Something is striking you as wrong and it’s making you upset. That’s okay. That’s normal. What matters is how you deal with it.
If your emotional surge isn’t too extreme, the best method you can use is to try to explain why you’re upset. What exactly is it that’s bothering you. Don’t make it an accusation toward your partner, make it about you.
Just say something like “I’m having a hard time with this. *pause* I don’t understand why… *pause* Please explain it to me so that I do understand.” Say it calmly and without emotion.
Sometimes, these points resolve well. At other times, you both might experience emotional escalation and, if that happens, a time out is probably a good move. Go back to the conversation later when you’ve both had time to reflect.
Try Another Discussion Mode If Face-to-Face Isn’t Working
For some personality types, face-to-face conversation on these topics just doesn’t work. Their conversations are driven by emotion and that emotion boils over quickly before any real discussion can happen.
If that happens, try a different mode of conversation. Exchange emails, where each person takes the time to write out their thoughts in a calm manner. This gives each person time to have an emotional burst, then calm down and write a rational response that they won’t regret.
Some people simply communicate better via the written word. Although I work on my verbal skills, I know that I communicate better by writing because it allows me to pause and reflect on what I want to say. If that’s true for you, a “money talk” doesn’t have to be a verbal sit-down.
Come Up With a Plan For Talking About Money Regularly
A “money talk” shouldn’t be a one-time thing. Not only do the realities of our lives change – interests and habits change, jobs change, people change – but there is also value in looking at whether the actions that came out of previous money conversations are really bringing about positive changes in your situation.
Plan on having money conversations on a regular basis. You can pencil them in monthly as formal conversations or have them more frequently and informally. Sarah and I have a real conversation about financial issues and goals at least once a week. For a while, we scheduled them, but we’ve found that it works well for us to do it more informally and frequently when issues pop up.
The key here is following up and tackling new issues as they arise. Different couples work differently, but as long as you’re dealing with changes and addressing how your plans are working, you’ve done what you need to do.
In the end, it’s all about communication. These tips mostly boil down to communicating effectively about a topic that’s challenging for many couples. It’s about expressing your true thoughts clearly, understanding your partner’s thoughts, and doing both without resorting to emotional responses.
Having a healthy financial relationship goes a long way toward securing success in other areas of a relationship. Make money conversations a priority in yours.