Money matters should not be kept in the dark.
- A new survey reveals that a large portion of Americans prefer to avoid discussions about money with their partners or spouses.
- By discussing financial matters openly, you can work to avoid problems while targeting specific goals.
Being in a relationship often means having difficult or uncomfortable conversations. These can include topics such as health issues, children, religion, and money.
But the latter is something that a large portion of Americans would prefer not to discuss with their partners. In a recent NFCC and Wells Fargo survey, 40% of respondents say they prefer to avoid the topic of money with a partner or spouse. But this is a big mistake, which could have serious consequences.
The Importance of Synchronizing Finances
Some people who get married or decide to live together get joint bank accounts and pay their expenses that way. Others retain more independence in both respects. Either way, it’s important to talk about money with your partner not only to avoid financial problems, but also to make sure you’re working towards common or even individual goals.
Imagine your partner comes into your relationship with $20,000 in credit card debt. It’s the kind of thing that could make it difficult to buy a house together or achieve other goals. If your partner is covering this up or simply keeping quiet about it, you may not know the debt exists until you jointly apply for a mortgage and your application is rejected. The result? A financial blow, but also, a potential blow to your relationship.
That’s why being open about money matters is a better idea. Specifically, you and your partner should make it a point to talk about:
- What is your income
- How much money you each have in savings and investments
- How much debt do you have and what type
- What your respective credit scores look like
You should also, if you live together and share expenses, set up a common budget that outlines what your different expense categories look like. If you don’t plan to pay expenses from a joint account or split them equally, then you’ll need to make a clear plan of who is responsible for which bills.
You may decide that if one person earns significantly more than the other, they will pay a higher share of rent and utilities. That’s fine, but it’s important to have this conversation and come to this arrangement together.
Don’t neglect your financial goals
You may have certain financial goals in mind, such as buying an income property or building up a nest egg that will allow you to retire early. Your partner may have different goals, or some that overlap with yours.
It’s crucial to talk about these goals so you and your partner can work together to achieve them. Just as important, you don’t want to find yourself in a situation where one of you accidentally does something to sabotage the other’s goals.
Let’s say you saved diligently to start a business. If your spouse decides to embark on a home improvement project without talking about the numbers with you, they could rack up such a big tab that you’ll have to dip into your slush fund for your company to cover those costs. This could lead to a world of distress for you – and a lot of unnecessary arguments.
It is often said that honesty and openness are the key to a strong relationship. This extends to money matters. Talking about finances might not be your favorite way to spend an evening, but it’s an essential thing to do with your partner, and on an ongoing basis.
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