Love & Money: Financial Talks For Every Stage Of Your Relationship

When do you start talking about money in a relationship? While financial compatibility in a relationship is important, no one wants to explain their 10-year student loan payment plan on a first date. Nevertheless, money habits (especially the less-than-favorable ones) and debt should be out in the open long before a couple moves in together or gets engaged, in my opinion. Similarly, within the first year or two, I think it’s relatively easy to gauge whether your financial values align. If one person is pushing for an all-inclusive resort vacation in Tahiti, while the other would rather take a local weekend camping trip, it’s worth discussing the difference in spending styles.

For me, financial compatibility is not about how much my partner makes, or how much debt he has, but about how he chooses to spend his money and approach savings. I honestly don’t think I would see a future with someone who spends $50 at a bar every weekend but isn’t saving any money, simply because that’s not compatible with my relationship with money.

Because money is the “leading cause” of strain in relationships, it’s important to get comfortable talking about money with your partner in an open and non-judgmental way. To help navigate these love and money conversations, I outlined five financial conversations and when you should have them in a relationship. I then asked two financial professionals about each conversation and when it should come up. Ben Barzideh is a wealth advisor at Piershale Financial Group, a wealth management firm just outside of Chicago, and Kimberly Foss is a certified financial planner and president of California-based Empyrion Wealth Management. Here’s what they had to say about these five financial conversations.

When to have it: When it starts to “get serious,” which will be different for everyone, but likely in the first two years of a relationship.

Foss: ‘Fess up about the debt too soon and you risk scaring that special someone away. However, if you wait too long, it can complicate things. If you are becoming very serious in your relationship, it is time to speak up. [If you carry a lot of debt], think of the roles being reversed — wouldn’t you want to know? You might be surprised just how understanding and open your partner is.

Financial conversation: Are our money habits compatible? If not, how can we meet each other halfway?

When to have it: When it starts to get serious.

Foss: Some people are spenders and some are savers. This might seem harmless with small-scale purchases, but it will be a hurdle to overcome when financial obligations and necessities [come into play]. Similar to discussions about disclosing debt, honest communication about your attitude toward money can bring understanding and harmony to financial decisions.

Barzideh: You find out if your financial practices are compatible with your partner’s by having an open conversation to assess where you agree and where you disagree. The areas of disagreement need to be compromised on in order for the relationship to [progress] smoothly. It’s important to be considerate and respectful of your partner’s wishes and habits.

Financial conversation: What are your future money goals?

When to have it: Before moving in together.

Barzideh: In the first five years of a relationship, there needs to be a lot of open communication about every aspect of your current financial picture and also your vision for the future. One of the most critical components of a successful relationship is communication, which absolutely pertains to finances. It’s very important to create an accurate snapshot of [your] current financial situation. Identify core values, goals, and priorities. Basically [ask each other], what are you looking to do with your money and your life?

Financial conversation: What’s mine and what’s yours? What happens to our shared purchases if we break up?

When to have it: Before moving it together.

Foss: Until you are married, keep major purchases separate and documented. Because you don’t have the same legal protections as married couples in case of a split, it’s a good idea to keep track of who paid what toward every major purchase. Detail out a “yours, mine, and ours” list of furniture and household items when you move in together.

Financial conversation: Do we want to merge our finances?

When to have it: Around the time of engagement — or after at least a year of living together if you see each other as life partners but don’t plan on getting married.

Foss: Couples should do what’s right for them. I have a client who says she will never marry her significant other and never combine finances with him. I have another client who combined finances with her now-husband shortly after they were engaged. Typically, I recommend keeping finances separate until the knot is tied as the laws apply differently to married couples as opposed to two people cohabiting. If you do combine finances before marriage, [I recommend] leaving some accounts separate for personal needs or gifts and drafting an agreement (define who “owns” each financial account) before any finances are combined. It may or may not help you legally in the event of a nasty breakup, but it’s better than nothing.

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