FICO first; then sex.
– Suze Orman
Suze said it best with the quote above — money first, then sex!
Talking about finances should come before marriage or cohabitating – in an ideal world. But there’s no time like the present, so if you haven’t started talking with your significant other about money – now is the time.
People always ask me how I’ve talked about money with the guys I’ve dated, or they’ll ask how I knew if they were good or bad with money. Since I have a personal finance blog that I’m sort of obsessed with, it usually comes up early on in a light-hearted way. Guys typically react very honestly. And a word of caution – you should believe what your partner is (or isn’t) telling you. Don’t read into it or think he’s just joking. Take it seriously. Once I had a guy say “sooo how much credit card debt is really bad?! ;)” – let’s just say he was not interested in making smart financial choices and I knew it right away. It’s amazing what people tell you off the bat. Don’t ignore it.
Here are the 14 steps that you can take to start talking about money with your significant other. I’ve used these steps, and while they may seem formulaic, they work. I’m all about systems and processes and talking about money is no different.
Step 1: Suggest talking about money regularly
The first thing you can do is tell your significant other that you want to talk about money. Explain to him that money is important and you want to be on the same page. Ask him if he’d be willing to have regular “money meetings” where you both sit down and go over your finances. Include the fact that you’re doing this as a way of getting closer and being intentional with your future together, and not because you don’t trust him or are concerned with his finances.
Step 2: Set the details for your first money meeting
After your significant other is on board, set a date and time to have your first money talk.
Let him know you want to get everything out on the table, including 1) your past financial mistakes, 2) where you stand now, 3) what your future long and short-term financials goals are, and 4) the logistics of handling money together (bank accounts, budgeting, expectations).
Mention to him that the meetings are supposed to be positive and don’t have to be long. Having them weekly will get you in the habit of talking openly about money, which will encourage transparency and decrease any awkwardness or nervousness around the subject.
Step 3: Hold your first money talk together
It’s really important you stick to your plan of having a meeting to talk about money. If you share a calendar, put it on the calendar. Just be sure to keep the date and time so that you’re consciously prioritizing each other and money. I know a lot of personal finance bloggers who sit down with their spouses weekly or monthly to have a budget meeting. It may sound weird if you’re not used to it, but it’s weird in a good, responsible way!
Step 4: Come prepared
Your first meeting may be a little different than the following meetings because it’s your first time talking about money in this setting. To start the conversation and minimize any nerves, come prepared. Bring the following to the meeting:
- An idea of your past financial mistakes that you want to talk about
- Your credit score
- A list of your current assets and debts (i.e.: your net worth)
- Your financial goals / what you want financially out of life
- Your budget
- Any questions or concerns that you have regarding money
Step 5: Be transparent
When you sit down for your first money meeting, get everything out on the table (have complete transparency). Being open and honest at your first money meeting will set the tone for the future. You also want to make sure you put everything on the table so that money doesn’t become a taboo topic. The more you talk about money openly as just part of life, the easier it will become to talk about in the future.
Step 6: Topic – Financial mistakes
Talk about all of your past financial mistakes. Part of trust is having complete transparency. This is especially true with your significant other. When you’re discussing your finances, tell your partner everything in your financial past. Don’t hide anything. Like they say, “the cover up is always worse than the crime.” – don’t lie or hide information about your financial past.
Step 7: Topic – Where you are now
Talk about your current financial status, including your credit score, debts (credit cards, student loans – everything), assets, and anything else that is relevant. Knowing where you both stand financially is the first step toward creating a plan for the future.
Step 8: Topic – Future financial goals
Discuss your long and short-term financial goals. If you don’t have any, this is a perfect time to start setting them. This includes talking about your savings and spending goals, in addition to buying a house, retirement, investments, insurance, and health care – all of it! This also may be a good time to talk about other important / serious things, like whether you want kids and the finances relating to education and daycare.
- Related: How to set goals
Step 9: Topic – Bank accounts
Decide how you want to combine your lives financially. There are many ways to combine finances and this day in age, there’s no one right way. I talk about five different ways to combine finances here. As long as you’re on the same page, you’re in good shape! And no hiding accounts either – separate does not mean secret!
Step 10: Topic – Budgeting
Talk about how you want to budget together. Is one of you a spender and one a saver? Do you keep each other in line with the budget or do you keep most of it separate? This may be a seamless conversation or it could be the hardest part (probably harder the more opposite you and your partner are). But differences included, I think budgeting together is helpful. Money is part of life together so you might as well figure out how to budget together if you’re under one household. It doesn’t mean it will be easy, but it will be worth it (especially if you’re just starting out!).
- Related: Budget Spreadsheets
Step 11: Decide who will be in charge
One of you or both of you need to be in charge of the finances. You can do it together or one person can take the lead. Decide proactively who is going to manage the money. If both of you manage your finances together, set up times where you go over your finances to make sure you’re on the same page. Planning this will avoid it falling into one person’s lap, which could cause resentment. It’s also tough because the person who is typically better with money will volunteer to be in charge of the finances. But then, the person who isn’t in charge may be a spender and causing some financial problems. It’s definitely hard. You don’t want a relationship where one partner is parentalizing the other. Take time and really dig into your finances regularly. Try different systems and see what works. There’s no one size fits all.
Step 12: Set expectations
Communication in a relationship is SO important. So, decide how much you want to talk about money. Do you need to tell the other person if you’re spending a certain amount of money? Do you want to meet weekly to go over your budget? Do you want to meet quarterly? The important thing is to get on the same page.
Step 13: Ask questions
Ask your significant other questions related to money. This is a good time to further your understanding of his finances and make sure you’re on the same page for the future. Don’t hesitate to ask if you have a question. You’ll be glad you did.
Step 14: Plan your next talk and repeat
At the end of your first money talk, put your next week’s meeting on the calendar and suggest a few things to talk about. Since you’ve already discussed your financial past, present, and future, your future meetings may look more like budget talks, or big-ticket purchases that you want to make. It always amazed me that there was stuff to talk about weekly, but there almost always was!
A Final Note!
Most people dread talking about money with their partner. I say, get ahead of the curve and make it a normal part of daily life.
Money should not be taboo.
The more open, honest, and frequent the conversations are, the better. Money is part of life, so you might as well get on the same page with the most important person in your life.
To really get started with money with your partner, I recommend:
The more you do money together, the better!