August 15, 2024 • 7 min
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Love is a bond that connects us to one another. It’s the foundation for building a life together. If you’re going to be living under the same roof, of course, money also comes into the mix. Having a talk with your partner about finances might not seem very romantic, but it could be one of the most important conversations you have.
Money is the main source of conflict in romantic partnerships. Working as a team toward common financial goals will help you build long-term financial security – and might even bring you closer.
Here are some questions to ask your better half before moving in together or getting hitched.
It’s important to understand each other’s approach toward money. Talking about your spending and saving habits might make you uncomfortable. So make a pact with each other to be kind and respectful.
Then start sharing. Are you a saver? A spender? Do you stay on budget but allow yourself the occasional splurge? Do you have some debt?
Being honest with each other will help you get a full picture of your current finances. That will put you in the best position to build your financial health together over time.
You and your partner might disagree about which goals are most important. Don’t worry, that’s natural. Start by identifying the financial goals you share. Would you like to buy a home? Have children? Travel abroad together? Start saving for retirement?
For many couples, top priorities are paying off debt and creating a safety net – a financial cushion to fall back on in emergencies.
To achieve your long-term goals, you’ll want to create a monthly budget. Decide on general categories you’ll direct your money toward each month. You might decide on a specific percentage of your monthly earnings to save, for example. We’ve got articles to help you create a budget and also update it over time.
A high credit score can save you hundreds of thousands of dollars over a lifetime. You’ll pay less for car and home insurance and will qualify for low-interest-rate credit cards, to name just a few benefits.
It’s important to know each other’s credit scores. Then if one (or both) of you want to raise your score, you can create a plan to do that. Make this one of your highest priorities – especially if you are planning to buy a home.
As you’ve navigated your way through life, you and your partner have probably accumulated some assets. So make a list of them.
Your home (if you own it) and any other real estate are assets. Assets also include checking and savings accounts and investment accounts (such as annuities, stocks, bonds, and 401(k)s and other retirement plans). If either of you own valuables – such as pricey art, antiques or jewelry – add those to your list as well.
Anything you owe is a liability. Chances are you or your partner (or both of you) have racked up some debt. You may, for example, have taken out student loans during your college years. If so, make sure you understand your students loans and try to pay them off as quickly as you can.
Your mortgage, car loan and credit card balances are also liabilities.
Couples who split up financial tasks – clipping coupons, paying bills – according to each person’s strengths save more money and enter retirement happier.
Creating a budget and sticking to it can be scary, especially if you haven’t done so in the past. Budgets can make people feel deprived, but creating one can actually be your path to more financial wellbeing.
When you know exactly where your money is going every month – rent, entertainment, groceries – you’ll feel more empowered.
Take these steps to create a budget:
Let’s say you want to buy a new car and your partner thinks it’s unnecessary. How will you handle it as a couple?
It’s best to have a plan for making major purchases. You might start by agreeing on what a “major purchase” is. Perhaps set a dollar amount that each person can spend without consulting the other.
To avoid squabbles, you might allot each partner some “fun money” that they can spend however they like – no judgment. For major purchases, have a conversation. Keep in mind that couples are most happy, researchers have found, when the purchase benefits both partners.
Whatever you do, never hide big purchases from your spouse or partner. You’re in this together, so honesty is the only policy if you want to meet your shared financial goals.
When you’re living together, you need to combine at least some of your finances. Every couple needs to find an arrangement that works for them – here are some options:
Fully merge accounts
You might want to fully combine your finances. That means opening a joint account and splitting expenses.
Joint and personal accounts
Another approach is to open a shared bank account for household expenses, while each partner maintains their own bank account for individual purchases. That way, you’ll have your own money to spend as you like, and your partner will too.
Separate accounts
Some couples keep their finances separate and split the bills. If you take this route, you may still decide to set up a joint savings account for vacations, for example.
You’ll want to agree how you’re splitting expenses. Will each of you pay exactly half? Or will you split the bills another way? If one person’s income is 55% of the household income and the other’s is 45%, you might each direct those portions of the expenses into your joint account.
And if you’re getting married, you might talk to your betrothed about a prenuptial agreement. It’s a topic many people want to avoid, but if you talk about it you can jointly make a decision about what’s right for you.
Getting organized — and making sure tasks get done — is the key to keeping your financial life humming along.
When it comes to tackling financial tasks, each partner might bring different skills to the table – and that can be an advantage. One person might be a master coupon-clipper and deal-finder, for example. The other might be great at tracking expenses or paying bills on time.
So it makes sense to split up tasks according to each person’s strengths. Research shows that this divide-and-conquer approach works best. It helps couples save more money and even head into retirement happier.
When you have questions about your finances, you’ll want to start by talking to the people closest to you.
It’s also a good idea to consult with a financial advisor. Most banks and credit unions, including Patelco, offer a free consultation. Patelco would be happy to help you find a financial advisor who can help you plan for retirement, begin investing and more. Advisors are available in person or online – whatever works best for you.
You can also find helpful money tips and advice online. Visit the Consumer Financial Protection Bureau to learn about everything from credit cards to reverse mortgages. If you need advice on buying a home, you can talk to a free housing counselor at The US Department of Housing and Urban Development. Meanwhile, the US Department of Labor offers free retirement toolkits.
Having a couple’s conversation about money, setting up a budget and such will give you the best start to your life together. Of course, circumstances change over time. So it’s a good idea to also schedule regular money check-ins, just to make sure you’re still on track toward your goals. If not, you can always make changes.
This article was created in accordance with the Patelco editorial policy.
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1 According to Forbes and RoboKiller, as reported by GOBankingRates in October 2022.
