Nobody likes to talk about money.
In many ways, finances are the last big “taboo” in our society. There’s even some research to back it up – a study from University College London surveyed 15,000 men and women in Great Britain a few years ago and found that people are seven times more likely to tell a stranger details about their sex life than they are to tell a stranger their salary.
One of the central missions of my work is to help millennials get more comfortable talking about money.
Because it’s absolutely critical that we do so, particularly as we enter serious relationships. As a generation, we are moving in with partners and getting married at a later age than our parents and grandparents did. Which means that couples have more established habits around money when they start to combine finances. And that, ultimately, can lead to friction in a relationship.
There’s been some research done on this subject, too. And it isn’t good news. Money issues are the number one cause of stress in relationships and can be a leading indicator of divorce.
As uncomfortable as it might be to have a serious, in-depth conversation around money with a boyfriend/girlfriend/fiancé/spouse, we need to learn how to have these discussions. And more importantly, we need to learn how to have these discussions in a way that doesn’t cause us to fight.
[Click here to download your free Newlywed Money Checklist, that will walk you through each of the steps to take with your finances when you get married.]
What a Money Conversation Should Cover
Talking about money with a partner should be an open dialogue. To make it easy for you, I’ve prepared a Money Conversation Starter Kit.
Before we talk about what it should cover, though, we need to talk about what this money conversation shouldn’t include. Primarily, judgment.
This needs to be a judgment-free conversation. Your objective is to understand your partner’s habits and values as they relate to money, not to criticize them. Once everything is out on the table, only then can you begin to craft financial strategies that will work for your family.
I truly believe that this is the only way to reduce or prevent conflict around your finances. Have a serious, no-judgment dialogue about your history with money, and use the perspectives you get from the conversation to shape your family’s financial vision.
Here’s what you need to cover, as I outline in my Money Conversation Starter Kit:
Your Money Histories
Who you are as a person is often a direct reflection of how you were raised. The way you handle your finances today is the result of your history with money to date. Therefore, you need to know your spouse’s money history in order to understand and appreciate how they interact with money.
Before you start making big financial decisions with your partner, it’s critical to understand “where they’ve been” when it comes to money, and vice versa. Doing so will help give you perspective on how they make decisions that might be different from those that you would make on your own. Which, in turn, can reduce fighting about money.
Your Money Habits
If the discussion about your money history is about where you’ve been in the past when it comes to finances, the discussion around money habits reflects where you each are today.
Even if you’ve been together for years and have fully integrated your finances, this is still an important discussion to have. At the absolute worst, this discussion will help you better organize your finances. At best, you’ll learn some critical details about the current state of your finances.
Your Money Goals
We’ve covered where you were in the past, and where you are today when it comes to your finances. Now, we need to talk about where you’re going.
What is it that you want to accomplish financially in your life? What does your dream life look like as a family? We often just go through the motions of our day-to-day life without thinking too much about these things in detail. I think that this is a mistake.
Use my Money Conversation Starter Kit to have a real discussion about what it is that you each want out of your life. Once you’re able to articulate these things in detail, you’re that much more likely to actually make them happen.
Your Investing Philosophy
The discussion about your money goals can be a really fun exercise for couples. But once you’ve talked through some of these goals, you need a roadmap to get you there. And that typically will involve some sort of investing decisions.
How comfortable are you making investing decisions? How much risk are you willing to take? It’s critical to have a discussion about these topics with your partner up front, to reduce conflict about these items later. Even if you don’t know that much about investing, you still need to be comfortable with the amount of risk you’re taking.
The Important Stuff
I’ve saved this set of questions for the end, even though these are the most important things you’ll discuss. The last piece you need to address in your money conversation has to do with the role money should play in your lives.
My favorite question to ask whenever I meet with a new client is simply, “Why is money important to you?” And when I ask this question, I refuse to accept a one word answer like “freedom”, or “security”. Why does freedom matter to you? Why does money make you feel secure? You need to go deep – really deep – into these questions to fully understand the role that money will play in your family.
This isn’t just fluff. I’m giving you some of my best stuff in this free download. I’ve had multiple clients literally burst into tears when they go through some of these questions. Not out of sadness, but out of the realization that it’s within their power to use their money to live their dream life.
I truly believe that you can live your dream life too. But, this only happens when you’re intentional about aligning your finances with that vision. This list of questions to discuss with your partner is a critical step to help you get there.
Money Conversations are Important for All Couples
I know what some of you are thinking: this conversation isn’t one that you need to have.
Maybe you’re just at the point where you’re thinking about moving in with your boyfriend or girlfriend, and feel uncomfortable bringing money up so early in a relationship. Or, maybe you’ve been married a few years and think you know all of the important stuff about your spouse’s finances.
Here’s the thing: it’s never too early to start talking about your future if you’re in a committed relationship. Money will play a pivotal role in the success of your partnership. It’s an uncomfortable subject to discuss, but using the questions in this guide will make it easier.
And if you’re already married, you’re absolutely right that you know a lot about your partner’s financial situation already. Of course you do.
But 99% of the couples I’ve met with have a very superficial knowledge about their partner’s finances. They know the key numbers and financial data points, but not the why behind the decisions they make with their money. And it’s this why that’s so important to understand if you want to avoid fighting about money later on.
You might know your partner’s answers to some of the fifty-four questions in this guide. But I guarantee that if you go through the rest of them, you’re going to find some big surprises.
It’s Awkward, But Critical
Money might be awkward to talk about, but when you’re in a committed relationship, you must talk about it. The good news is that money can be a powerful tool in your toolbox that you need to use to live your dream life – if you have proactive conversations about it with your spouse. Use this guide to help facilitate a conversation with your spouse about money. And while you’re at it, click here to download a free Newlywed Money Checklist that will walk you through each of the financial steps you need to take with your partner when you get married.