Life partners need to be on the same page about money We all know couples who fight about money. In fact, you may personally be in a relationship where finances are a source of tension.
It’s no mystery why these kinds of conflicts are so common — money fuels our ability to take care of ourselves and our dependents. Managing it requires discipline and a plan, but often couples don’t see eye-to-eye on what that means. When long-term committed partners share their finances but not the same values and habits around money, it’s ripe for friction. Fortunately, as with most things, clear and open communication can help. Here are four questions to facilitate an honest and productive conversation with your spouse or partner about money.
No. 1 — How are expenses managed?
If you are soon to be married or living together, you need to determine how your money will be combined (joint checking and savings accounts or separate accounts) and who will be responsible for each household expense. If you’ve been together for some time, your primary focus is to make sure that you’re living within your means and that there is transparency about all money matters. To the extent you take on debt or make large purchases, it needs to be an amount both parties are comfortable with.
No. 2 — What are today’s financial priorities?
These can change from time to time, but it’s important for couples to frequently discuss what is important to them. For example, young couples may want to determine if they should set money aside for a down payment on a house. Some may want to prioritize spending on vacations. Later in life, couples need to think about how they plan to spend their time (and money) in retirement. These are issues that should be discussed frequently to make certain there are no surprises.
No. 3 — What are your long-term goals?
These tend to vary based on your age and are likely to change, to some extent, over the course of your lives. As a young couple, putting money aside for higher education (your own or your children’s) may be one of your priorities. Even though retirement may be a long way off, the sooner you begin saving for that goal, the better. Those who are older may be primarily focused on retirement and the disposition of their estate. Sitting down with a financial advisor can be beneficial regardless of your age. An advisor will gather input from both parties and …….