The Financial Conversation every couple should have
Most couples don’t realise that how you grew up with money can impact how you spend and think about money as an adult.
It could be the different socio-economic circumstances you grew up in, how much your parents contributed to helping you get set up as an adult, or even how your parents engage with money now. All of these things can influence our attitudes towards finances.
Conversations around finances don’t need to be fraught with emotion. In fact, they can be a great way to build financial trust and compatibility in a relationship.
The goal of financial conversations isn’t to create identical attitudes towards money either. It’s to make sure both people understand how the other thinks about money and the financial life they’d like to build together.
So, read on for some thought-provoking suggestions to help you and your partner get on the same page financially.
1. Money conversations are relationship conversations
Don’t bury your head in the sand and avoid these conversations for fear of a disagreement.
It’s important that both people understand why the other person thinks about money the way they do. Money touches on so many aspects of our lives – freedom, security, lifestyle, family and personal values.
Understanding where your partner is coming from can make these conversations much easier.
2. What does money mean to you?
This can be a broad conversation around money growing up.
Was money a source of security, stress, conflict or freedom? Are you a spender or a saver? What does being financially comfortable mean to you?
Financial comfort can be very different for each individual. What feels like “enough” to one person may feel completely different to another.
Understanding this difference is important – particularly when you’re building a financial life together.
3. What are your financial goals – both shared and personal?
Depending on the stage of your relationship, these could be anything from buying a home, travelling, starting a family or planning for retirement.
And remember, a goal doesn’t have to be identical to be important and considered.
You may have different personal goals, and that’s okay. The important thing is that you both understand what those goals are and how they fit into the life you’re creating together.
4. Are you both open and honest about your current financial situation?
This one is about trust and transparency.
Things like income, savings, debt, credit cards, investments and other financial commitments are all worth discussing.
You don’t necessarily need to have the same financial situation, but you do need to understand what you’re both working with.
It’s much easier to make financial decisions together when there aren’t any surprises hiding in the background.
5. How will you handle everyday spending?
A common question we receive from clients is around this exact topic.
If there is a mismatch in income levels, how do you split the household bills? Is it percentage-based on income, or do you split everything straight down the middle?
There is no right or wrong with this – it has to be something you are both comfortable with and, obviously, needs to be fair.
For example, you might split the household bills down the middle, but the higher earner pays for the holidays.
The important thing is to have the conversation rather than assuming you both have the same expectations.
6. What are your financial boundaries with family and friends?
Ha! This is a big one.
Each person can have very different views on whether they would lend money to family or friends. Is it a gift or a loan? What happens if they never pay it back?
I once read that you should never lend money unless you are willing to treat it as a gift. In other words, you may never see it again, so don’t lend more than you can afford to lose.
Then there are ageing parents.
What happens if one partner wants to financially help their parents? How much financial support are you both comfortable providing? Are there expectations around inheritances or family wealth?
The number of clients we see who “expect” an inheritance – and have even factored it into their retirement plan – is concerning. We don’t factor it in, by the way!
On the other hand, the number of clients who attempt to write people out of their Wills can also be concerning.
Family, money and expectations can be a complicated combination.
Someone is going to be disappointed at the reading of the Will 😊 Let it not be you.
You don’t need to have all the answers
Hopefully, you’ve enjoyed reading our thought-provoking suggestions.
You don’t need to have all the answers, and you certainly don’t need to agree on everything straight away. Sometimes the most important thing is simply starting the conversation.
Set aside some time to discuss with your partner any of the above that you may not have touched on – or even thought about.
If you find talking about finances uncomfortable or a bit “ick”, set up a walking date, picnic or a nice drive to have the conversation.
Your future self will thank you!
As always, if you have any further questions, we’re here to help.
General Advice Warning
The information on this website and the links have been prepared for general information purposes only and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned in this email, consult a professional financial adviser to consider whether it is suitable and appropriate for you and your personal needs and circumstances.