If you’re celebrating your beautiful relationship this Valentine’s Day, show your commitment with more than just chocolate – consider a money talk. Someone you love, trust, and can rely on can be a great financial asset, and by having the money talk, you can both learn how to make each other’s financial goals more achievable together. Check out our story to see how an open money talk totally changed my money perspective.
A recent poll by MONEY even found that financial compatibility is important to a successful relationship. If not during your fancy date, then the next day over coffee, start a money talk. Here are techniques to help your talk flow better.
1. Make it a date
Even though the money talk isn’t casual, plan the talk like you would a date – schedule the time and place to have it. This way, you and your partner can gather the information you need to share and plan what you’d like to express to each other. Don’t forget to mark it in your calendar and invite your partner.
2. Start a money talk
Once you’ve made it a date, breaking the ice is the most crucial step. Some people may be very hesitant to have the talk, but it’s up to you to take the lead. The best way to start is by getting a better feel for your partner’s approach to money. You want to first gauge their:
- Tolerance for debt, and ability to pay if off
- Spending behaviors
- Planning habits
- Outlook on investment
One simple yet straightforward way to get a better sense of your partner is by asking them a hypothetical or situational question. For example:
- What would you do with the money if you received a large unexpected bonus from work?
- If you lost your job tomorrow, how long do you think you’d be able to support yourself?
- Do you think we’ll be able to support our aging parents, financially?
These questions might strike an emotional cord, but they’re great ways to fuel the conversation.
3. Share the good, then, the bad
Now with some momentum, it’s time to share the details. If you’re in a strong, long-term relationship with your partner, your finances might eventually overlap. Be prepared to share information about your assets and, probably more importantly, your liabilities. Think about:
- Assets: Cash flow and income, savings, and short- and long-term investments.
- Liabilities: Credit card debt, lines of credit, student loans, mortgages, etc.
Being open and honest now can save you a lot of hassle and lead to more productive planning.
4. Align your goals
Two heads are better than one – and so are two wallets. You might be lucky to learn that you and your partner share some similar goals. Perhaps both of you actually want to spend less on eating out. There you have the chance come up with alternative date plans. If you want to take a bigger step, set an automatic contribution to a shared account to save for a car down payment or vacation. Ultimately, you two can consider growing assets together, like for a long-term investment or a house. Remember two people can grow money a lot faster than one person.
5. Find your roles and take action
At this point, you’ll probably have a good sense of what you and your partner are working on individually, so it’s a great time to consider what you can do together. Determining what type of money personalities you have can help define the roles and responsibilities you should take in your financial lives together. Investopedia has a great article to help determine whether you and your partner are a Big Spender, Saver, Shopper, Debtor, or Investor.
By having a good sense of how you can work together, you can make a plan about how to contribute to your newly shared goals. You can even build off your existing financial plans; there’s no need to start everything from scratch. If you need some help, you might find useful some pointers from our article on setting an achievable financial resolution.
Being open with your partner about your financial situations may save you both a lot of avoidable tension in the future. Not to mention, being proactive about this may open to doors to financial opportunities that you could only achieve as a team.
Having a talk is just the first step to dealing with money in a relationship. Learn more about sharing your finances with your partner by subscribing to Pinkfolio.