Discussing Your Financial Issues with Your Partner
We all value honesty in relationships. But when it comes to dealing with financial issues, many couples struggle. The National Endowment for Financial Education reports that 41 percent of adults who manage money with a partner or spouse have lied to that person about a financial matter. And even if spouses don't lie about their spending, it's easy to fall into the trap of ignoring money, forgetting to talk about it, or letting one partner read all of the account statements and pay the bills without the other's input.
Plus, generational trends point to more people dealing with money individually. According to The Atlantic, millennial couples are more likely to have separate bank accounts than people from previous generations. Unless couples make an effort to share information, they can end up in the dark about each other's finances.
Why Being Open About Money is Important in a Relationship
Lack of communication around money can damage a relationship. For many people, money is a source of conflict. According to U.S. News & World Report, one-third of couples argue about money every month. No one likes to feel as if they're being misled, especially when it comes to a sensitive subject. If your partner finds out that you've withheld information or that you haven't been truthful about money, it can place a serious strain on your relationship.
Openness is also necessary for managing your money well. Miscommunication can lead to mistakes or poor choices. For example, failing to communicate about retirement savings could mean that one person spends money that the other was intending to put in an IRA. And a couple could end up with an overdraft if they don't discuss how to spend the money in an account, then both try to withdraw the funds for different purposes.
Achieving financial goals like making a down payment on a house or saving up for a vacation can be impossible if partners don't cooperate with each other. Couples who don't talk openly about money could miss out on financial milestones because they can't agree on a goal, set a time frame, or coordinate their efforts to reach it.
And while you may feel that you're doing your partner a favor by taking care of financial chores for them and not bothering them with the details, keep in mind that doing everything yourself can put your partner at a disadvantage. The New York Times reports that in a study on couples' financial knowledge, the partner who handled most money-related tasks gained financial literacy over time, while the less involved partner did not. If your partner doesn't become familiar with your accounts or get any practice managing money, they might struggle when you aren't there to take charge.
Fortunately, these pitfalls are avoidable when you talk openly about money. If you and your significant other haven't always been transparent about finances, now is a great time to change that.
Starting a Conversation
Let your partner know that you'd like to be more open about your finances. Follow these tips to hold a respectful and productive conversation:
- Choose a time when you can both focus on your finances, without distractions.
- Set an agenda for the discussion. You might want to cover debt and spending in this conversation and leave savings, investments, and financial goals for a later talk. Don't expect to address all financial issues at once.
- Try to keep a nonjudgmental attitude, and really listen to what your partner has to say. When your partner opens up about difficult issues, thank them for their honesty.
- The first step is to get everything out in the open. It's okay to bring up challenges that you don't have a solution for yet. Researching your options and selecting a course of action can go on the agenda for future conversations.
- If talking about money is anxiety-inducing for you or your partner, set a timer for 20 minutes, after which you can conclude the conversation. That way you have enough time to begin communicating, but you don't have to worry that the talk will drag on too long.
Plan to Manage Your Finances Together
After your first conversation, keep talking regularly about finances so that the lines of communication stay open. You might want to pick a date — like the first of the month — to go over your budget and talk about financial issues.
Use your bank's tools to help you and your partner stay on the same page. The two of you should enroll in online banking and use a financial wellness tool to track your financial progress together, watch trends in your spending, and access your financial wellness score. Sign up for account alerts to go to both you and your significant other so that neither of you misses any important account activity.
Although being open about your finances may be a challenge at first, it will bring you and your partner closer and build your trust in each other. And as you collaborate to manage your money, you'll each acquire greater confidence in handling financial tasks. As a result, you'll be better prepared to work toward your goals as a team.