If we’ve said it once, we’ve said it a million times: how you deal with money can make or break a relationship. Money problems derail relationships, old and new. The key is communication and making mutual decisions you can both live with.
To help simplify things, here’s a checklist of important money conversations you should have with your significant other and when you should aim to have those conversations.
Conversation: Financial goals
When: early in a relationship
How positively or negatively we feel about our place in life is often tied very closely to the goals that we set and our progress towards those goals. Our goals as individuals can either be strengthened through a relationship or deeply hindered, depending on whether or not your partner shares and supports your goals. Many people assume that their partner has similar goals, only to find that their goals are not only different, but completely non-compatible. That’s why it’s a good idea to gauge your partner’s goals and long-term plans early in a relationship. It doesn’t have to be a difficult or serious conversation, but understanding early on where your significant other wants to take their life can help you decide if you want to go with them on that journey.
Conversation: Money styles
When: After the relationship becomes serious
Most people gauge their partner’s money style through experience. You spend time with someone and see how they handle (or mishandle) their money. What usually happens at this point is that we quietly develop distrust and disapproval toward our partner and the way they handle money. What should happen, however, is a conversation. You’re almost guaranteed to have a slightly different style and a slightly different philosophy when it comes to money. It’s important that you discuss why you handle things the way you do. Talk about how you view money, what you worry about and what you consider to be money best practices. The point here is not to get someone to change or to get your partner to forsake their personal money style. The point is simply to understand one another, which will help a lot when issues and disagreements come up.
Conversation: Financial hurdles
When: Before you make a commitment
Understanding what you and your significant other want to accomplish is a great start, and understanding how you each view and handle money gives you a glimpse of some of the potential valleys you’ll have to cross going forward. But some of your biggest hurdles may already exist – in the form of extensive debt or credit issues. Pride, shame and a combination of the two can make it difficult to talk to your partner about financial issues that have occurred separate from the relationship, but it’s vital that you get these problems out in the open. They’re going to come up eventually, no matter what, so it’s better to meet these issues head-on. You don’t even need to necessarily come up with solutions in this conversation – just put it out in the open so everyone is on equal footing.
Conversation: Joint money
When: When you’ve made a commitment
How do you plan on combining money? How will you approach joint purchases? Joint savings? Debt problems? When things become serious and you start building a life together, you need to figure out how you’re going to handle money going forward. You need to create a plan and then stick with it. Winging it will inevitably lead to miscommunication, frustration, and fights. So. Many. Fights. To avoid all of that, you need a plan and it needs to be a compromise that you can both live with. Pick mutual goals and discuss all major money moves before they happen. Put some of it in writing if that helps. No one’s going to get everything they want, but as long as you’re on the same page and take steps to stay on the same page, you’ll both be happier in the long run.