New couples have plenty of fun things to talk about, but what about the tricky-but-necessary topic of finances? Instead of avoiding the conversation, it’s better to tackle money issues early on in order to avoid problems down the road. No matter where you are in your relationship, here are some ideas for discussing finances in a constructive way.
Understanding each other’s emotions around money is a good starting point. Generally, there’s a strong relationship between your emotions around money and your history with money. Therefore, talk about how your families handled money when you were growing up. Were family finances a point of contention? Did you learn how to manage money when you were younger? What has been the biggest financial hardship you’ve faced? These conversations can easily segue into ones about how you can improve your saving habits together – or overcome any financial insecurities that might exist.
As the relationship becomes more serious and you find yourself talking about a future together, sit down and talk through your current financial picture. What is your income, and do you track spending? Are there student loans or credit card debt that is being dealt with? After laying everything out on the table, talk about what your financial plans and goals are. What’s your strategy for paying off those student loans? Do you enjoy your work and see yourself at that job for a while? Do either of you see yourself relocating to another state or country?
Also, dream a little bit! What do you want retirement to look like? If you received an unexpected inheritance right now, what would you do with the money? You may be surprised by what these conversations reveal — all the more reason to have them sooner rather than later.
Once you know marriage is the next step, it’s worth speaking honestly about who might handle the family finances and how you will view your household assets. Some couples keep their finances separate, others merge everything completely, and many fall somewhere in the middle. After tying the knot, work as a couple to solidify your goals and then create a spending plan to track your progress. Finally, carve out some time each month to talk about your family’s finances. These conversations will pay dividends as you navigate life together.
David Kern is a Wealth Management Advisor at Wealthquest – a Cincinnati based financial planning and wealth management firm that offers a full range of financial services under one roof, for one simple fee.