Picture this typical scenario: Sara and Joan have just gotten married and want to buy a house within the next year or two. They’ve had some initial discussions about their mutual finances, but lose steam when the conversation becomes complicated. Sara hasn’t given Joan the actual figure of her student loan debt, and Joan hasn’t told Sara she’s been rebuilding her credit score. Whenever they watch HGTV, they get excited about the possibilities of having a house, but things become awkward when they try and talk about how they’ll actually pay for it.

Does any of this ring a bell? People often think talking about money is a taboo subject, and go to great lengths to avoid it, even (and maybe especially) with their partners. But whatever your relationship – whether it’s a marriage, a domestic partnership or cohabitation – bringing up your cash flow is a critical part of maintaining a healthy connection between you and your loved one.  

So how exactly do you talk about the big, green elephant in the room?

While there’s no correct way to paint the picture of your financial life, here are a few fundamental questions to ask when talking about money with your partner:   

1. What are our financial goals as a couple? Discussing your goals as a couple is a great place to begin a financial conversation; it’s where you both dream about the future you want to have together. Maybe you want to buy a house like Sara and Joan; or maybe your goals are a bit smaller, like taking a family trip to Disneyland. Whatever your objectives, sit down and put pencil to paper (or fingers to laptop). Figure out a timeline by starting with your goals and working backwards. If you want to buy a house in three years, calculate about how much you will need to save every month to reach a down payment. Then, ask how much you can each contribute towards this goal based on your respective incomes.
2. What debt do we have? Much like Joan and Sara need to do, sharing your full financial picture with your partner is a must. Do you have some old credit card debt or student loans? Put it on the table. It’s important to be transparent about your debt so your partner isn’t surprised. And when you know exactly what you’re dealing with, you can problem-solve more effectively.
3. How will you pay for your joint expenses? This might sound like a no-brainer, but it’s an essential one to tackle — especially if you both earn different amounts of money or have different spending habits. My recommendation is to open a joint account to cover all these expenses, deposit a predetermined amount into the account, and pay everything out of it.
4. Who handles the bills? Assuming the other person will take care of a bill is the quickest way to get your electricity shut off. Do you jointly pay bills or is one of you responsible for them? Consider taking turns each month, splitting up the bills, or just assigning the task to one person (while the other one does something equally onerous, like the laundry). Ultimately, you need to have a plan for who keeps track of everything so no bill is left unpaid.
5. What should our budget look like? Budgeting may seem like a drag, but creating one is actually a helpful tool that allows you to compromise with your partner. How do you reconcile your different spending or saving habits? Agree on what feels right for each of you, and reflect that in your budget. Then, when you are confronted with decisions about what to spend on a fancy dinner or a vacation, you have a set of rules to follow that you’ve committed to ahead of time.

This list is by no means comprehensive or complete. The important thing is to start (and continue having) the conversation. An ongoing dialogue about finances is really about helping you build a better life together. Talking about money definitely comes with a lot of baggage — but once you get over the initial awkwardness, you’ll be surprised with how many financial dreams you can make a reality.

This is a great article on Navigating the Financial Side of a Relationship. A few other articles on this topic can be found: here, here and here.

Have any questions about financial planning? Let me know how I can help.