Talking About Money with Your Partner: 8 Rules to FollowFeb 02, 2021
Ok, let’s talk about the 2 most uncomfortable subjects in one blog, shall we?! Relationships and money, here we go!
Lucky for you I’m an expert in uncomfortable conversations and have helped hundreds of couples start talking about money. I’ve seen my fair share of money dynamics and although you never know what happens at home — from the conversations I’ve had you start to learn what works and what doesn't.
Now, for my own experience. I was previously married to a spender. Truth is, naturally I’m a bit of a spender too, but when your spouse's spending is astronomically worse than yours — you start to reel it in. Despite the hard times, this weird circumstance taught me a ton about how to communicate and handle money in a relationship. You can learn a little more about my story here. Now, I can humbly brag that my partner and I are killing the money- communicating game!
8 Money rules to follow in your relationship
Although every relationship is different, when you have these 8 simple rules in play, you and your partner can celebrate being confident in all your money matters.
- Structure your accounts correctly
- Never leave all the responsibility to one person
- Give each person the autonomy to make spending and saving choices
- Set a ‘spend limit’
- Make time for formal communication
- Be uber-transparent
- Don’t overlook non-financial contributions
- Have a joint vision
Structure your accounts correctly
There are many different opinions on this, but I can tell you from experience that what works MOST of the time is the mine, yours and ours method. That means a sole-owned checking account for you, a sole-owned account for your significant other, and a joint account you use for bills and joint expenses. This inherently gives each person a little bit of autonomy and no one gets the opportunity to judge or have to defend their spending habits. Now, how much goes into each account will vary couple to couple. If you make similar salaries, I would say to contribute an equal amount to cover expenses. If there is a big difference in salaries, you could do a weighted percentage. If one person stays home and takes care of children, maybe there is an allowance method. Either way, allowing each partner to have something that’s theirs alone is super important in keeping balance in the relationship. If you want more expert advice, I suggest taking a look at Farnoosh Torabi, one of my favorite money experts who has some great content around how couples can structure their accounts.
Never leave all the responsibility to one person
Both parties should know at least where and how their money is managed and have a say in the decision making. This avoids to major scenarios that I’ve seen too many times. The first — someone comes in under distress because they were left alone due to death, separation or divorce and have no idea where any of their money is, what bills they have, and how much to pay, save, or invest. The second situation — a couple comes in because of an emergency and one partner realizes the other partner has mis-managed their funds. This is awful to watch and creates distrust, anxiety and resentment in the relationship. So, do yourself a favor and make sure both parties feel responsible for the financial decisions in your relationship. I promise it’ll be worth the little extra time and effort it takes in the long run.
Give each person the autonomy to make spending and saving choices
This goes along with rule #1. Having autonomy gives balance and integrity to your relationship and a sense of financial freedom. Particularly for women or for partners to earn less. This allows one to spend or save as much of their allowance as they like without the other person constantly checking in and having to disclose every cup of coffee, haircut, or new pair of shoes. It also allows a partner to save as much as they wish — because your finances should never be a factor in forcing you to stay in a bad situation.
Set a ‘spend limit’
As much as spending autonomy is important, so are limits. Couples I saw who had awesome communication about money typically set a spend limit — in other words the maximum amount that a partner can spend without asking their better half. The amount will vary couple to couple, but I would suggest 15% of your monthly take home income might be a good place to start.
Make time for formal communication
I used to not think this was less important and that consistent talks would do that trick. However, after having some recent money dates in my own relationship- I’ve found them really helpful. This gives each person the ability to prepare questions, think about long term goals, and disclose what’s going on in their own world without distractions. My suggestion would be to do this at least twice a year- maybe more if you have some major financial goals you are tracking.
If you are in a healthy relationship that you want to continue — my advice: Never deliberately hide debt or money from your partner. Period. It just rarely works out the way your want it to. This is especially important if you’re looking to take on any sort of legal commitment together like buying a house or getting married. A good way to start this is to get clear around your finances. An easy way
Don’t overlook non-financial contributions
If you stay at home — meaning you take care of the home, children, cleaning, gardening, cooking, shopping, laundry, etc. please recognize that this is work. And this work should be rewarded and appreciated. Deep down- we all need to feel that our contributions are valuable and matter to our partner. Check in with each other, appreciate each other and make sure you both feel comfortable making both financial and non-financial contributions to your relationship.
Have a joint vision
It’s OK if you and your partner are moving at different speeds, but it’s going to eventually be an issue if you have two different visions. If you want to ride in an RV around the US in 20 years and your partner want to work 30 years to afford retiring in Paris… you all will eventually need to have a major conversation. Best to have that sooner or later and work out the compromises early.
If you and your partner are not married, and are looking to do so…. please please please get a prenuptial agreement. Above all else, your marriage will be a legal contract with many different implications depending on what state you live in. Just like you would before you went into business with someone or financed a car or home — do your homework and know what the repercussions could be if things went south or you just naturally grew apart (sorry, it happens!). Besides, before your marriage you’re more likely to make kind and fair decisions about where your money goes than at the time of separation. You can find some great tips on how to get the conversation started at acorns.com
So, these are the 8 Rules I have. It’s really all about being proactive, respectful and honest with your partner — hopefully some of the same skills that make being with your partner so wonderful to begin with!