Yours, Mine and Ours: Money Advice for Couples

Love is an amazing and strong force—a feeling that keeps songwriters, florists and jewelers in business. It can change lives, bring joy and create bonds that last a lifetime.

Happy couple talking together

But anyone who’s been in a relationship knows that there are certain topics that can all too easily spark arguments. For many couples, money is at the top of that list. To help avoid financial conflicts in your relationship, follow these steps.

Have “the money talk”

A lot of money arguments happen when partners don’t have a common expectation of how money should be earned and spent. The biggest financial issues, though, tend to arise when one isn’t honest about their finances. So while speaking of money may be taboo in social settings, it’s absolutely imperative to for couples to give “full disclosure” about their finances, obligations and expectations before committing their lives to one another. These suggestions may help:

  • Schedule the conversation. Trying to have a serious money discussion while checking email or cleaning up the dinner dishes won’t work. It’s important to set aside time when both you and your partner can talk privately and without interruptions.
  • Know what you owe. During your discussion, review any and all debts—mortgage, car loans, student loans, day-to-day bills, credit cards, and so on. Don’t just address the fact that you have these debts—lay out the balances on each account, interest rates, and any past-due balances.
  • Know what you own. Where are your checking and savings accounts? What are their balances? What investment accounts do you hold together and separately? What are the balances? How much do you save and how often?
  • Know what you earn. Do you each know what the other earns? If not, you must.
  • Know each other’s money style
    • Does one partner have six months of living expenses set aside as an emergency fund, while the other is comfortable living paycheck to paycheck?
    • Does one dutifully save each month for retirement, while the other saves only if there’s money “left over in checking”?
    • Is your beloved making good financial choices? It’s important to realize that your partner’s financial decisions could affect both of you. If they aren’t making good choices now, that tendency probably won’t change in the coming years.
  • What obligations or issues would impact both of you as a couple? Does one of you have a parent who expects to move in in their later years? Children from a previous relationship? An expensive hobby that must be budgeted for? A past legal issue that would impact the ability to get a mortgage?
  • Review your goals. Once you both understand where you’re at financially, you can talk about your future goals and whether or not you’re on track to achieve them. And yes, sometimes the exercise even highlights whether a couple is financially compatible enough to continue with the relationship, but better now than later!
  • Repeat. This isn’t a one-and-done conversation. To stay financially connected, you should meet at least once a quarter to reassess where you’re at, and where you want to be. If that’s too formal, figure out something else. One couple finds they have their best financial conversations when doing other things – for them, that’s kayaking in the summer and cross-country skiing together in the winter. Others make the most of “car time” by discussing finances then.

Make managing money a team effort

In many relationships, individuals tend to take on certain tasks. One person might do the cooking, while the other handles the cleaning.

Managing finances tends to work the same way. Often, one person handles the day-to-day responsibilities of paying bills, managing checking/savings accounts and overseeing investments.

While this is a great system for many couples, it can also lead to financial disconnect and even resentment. Imagine feeling like you contribute financially to the relationship, but you don’t even have the password to see what your checking account and loan balances are? Likewise, the person managing the day-to-day tasks can feel like they have a chore the other is free of and doesn’t like being questioned.

This puts both people in a risky situation. What happens if the person handling the money gets sick or injured and becomes temporarily unable to manage the finances? Or what if the person managing the money makes a big financial decision that doesn’t work out or align with what the other person wants?

To help avoid this situation, try to implement a “checks and balances” approach to managing money. Split up the financial tasks as evenly as possible—and in a way that requires ongoing communication between the two of you.

With regard to purchases, some successful couples have “a number” – meaning, items up to this amount don’t need to be discussed. Anything that costs “the number” or higher must be discussed first.

Consider a prenup (or a postnup)

Contrary to what some people think, prenuptial agreements aren’t just for the rich and famous. According to Business Insider, prenups have been on the rise for years with couples who want to protect their financial interests (or the interests of their children) in the event the marriage ends.

If your premarital estate is significant, it makes sense to ensure that your spouse will share in it only as much as you wish should you divorce or die. This is especially true if you have children from a prior relationship whose inheritance you want to protect.

A postnuptial agreement is similar to a prenup but is signed after the wedding—sometimes years later. Like prenups, postnups are contracts that spell out how assets and liabilities would be split upon divorce or death. They may address how the entire marital estate will be divided or carve out how a single property will be treated if the relationship ends.

Talk to a (financial) professional

Working with a financial professional can be a big help when it comes to discussing your money. It lets someone else lead the charge and helps to bring financial conversations out in the open in a calm, rational manner.

The upside to financial harmony

Although some of these financial conversations may be uncomfortable, there’s a huge upside to getting it right. Just a few of the benefits include:

  • Synchronizing your goals and reaching them more quickly together
  • Avoiding future arguments—large and small
  • Building trust that extends far beyond your net worth

Remember, good communication is a must. You and your partner owe each other these discussions. Talk regularly, honestly and without judgment. Your relationship (and your finances) will be the better for it. Contact us if we can help.