Money is a touchy subject that can make anyone feel a variety of different emotions all at once. They're hard to have and can be stressful, but it doesn’t always have to be that way. There are many ways to have money conversations with your significant other that can be done calmly and end successfully. If you're thinking about moving in with each other or have already started living together, there are a few things to be aware of that will help the conversation go smoothly.
Preparing for the conversation
Going into a conversation about money requires both you and your significant other to have an open mind, to be calm and understanding and to follow a game plan. You want to plan out what you want to say ahead of time, so that when the conversation happens you’re focused and won’t forget any important information. Set goals and play on each other’s strengths when listing your plans for expenses, bills and savings.
Start by gradually speaking about money in small amounts before you have the big sit down. It is also beneficial to have the conversation before you settle on a place to move in together. “The best time to talk money with your SO is when you’re still in the planning stages of moving in together,” says Carole Lieberman, M.D., a Beverly Hills psychiatrist and author. “Once you move in, it’s harder to make your voice count because you may be stuck with moving out if you don’t like your SO’s financial plans.” It will save the both of you a lot stress and potential headaches by having the conversation around the same time you start actively looking for a place to live.
When having the conversation about money, make sure to address multiple areas and not just stay on the topic of spending. Start by dividing up expenses—rent, grocery, utilities—based on each other’s salary and who is good at doing what. “Plan ahead as to how you are going to divide expenses. This could mean splitting everything down the middle,” says Lieberman. “Take into consideration the income each of you have and be proportional.”
If dividing up expenses 50/50 doesn’t work, then use each other’s strengths to see where you’re better off helping is another option. “Be respectful of each other's earnings. One of you might be making significantly more than the other, so it's not right to assume that the other person can split all expenses 50/50,” says Mara Hyman, a marketing professional. “Figure out what your SO can reasonably contribute without talking down to them or making them embarrassed about how much or how little they earn.”
Chelsea Cirruzzo, an American University senior, says, “With shared expenses, like rent and groceries, keeping a ledger is the best way to hold one another accountable. If I offer to get groceries one week and pay $40, and the next week [my boyfriend] Josh gets groceries and pays $60 for food that we are both sharing, I know that I could pay for another expense to even things out.”
Set up a plan for managing your money and even discuss creating a joint bank account to use for bills. However, you might want to continue to maintain financial independence by keeping your own private bank account for your own expenses. Along with dividing up expenses and creating a joint bank account, talk about how the both of you feel about investing, how much you’re earning and saving, and even retirement plans if you have something in mind. “A lot depends on both people's financial situations and budgets, and what your cost of living will be,” says Alaina Leary, a magazine and book editor. “I know couples where one person contributed more rent money than the other, either because they had a higher income or because they pushed for a more expensive apartment and were willing to pay more rent for it. I also know a lot of couples where one person will support the other through a hard financial time (when one partner is laid off, or someone goes back to graduate school).” Be honest about every area so that neither of you are blindsided going into this exciting new phase of life.
Plan for emergencies
You’ll never know what twists and turns life may bring you, so it’s better to prepare for any type of emergency as best as you can. For situations such as being laid off unexpectedly, health emergencies, or if either ever wanted to go back to school, creating an emergency fund can be a lifesaver. Emergency funds are good to have as an extra backup after savings. During times of need, worrying about money on top of the stress that you may be experiencing will just make everything worse. Add an additional topic for the importance of an emergency fund with your significant other and discuss how much will go into it.
Another situation to be cautious about when having the money conversation with your SO is to be aware of each other’s backgrounds, views and aspects that affect this topic by how the both of you were raised. Not everyone has the same views about money and you'll need to be understanding when different views come up. If multiple areas of the conversation seem to conclude in a disagreement, then you may want to reevaluate things or decide that moving in together isn’t a good idea right now. You can also decide to seek a professional to help plan out a budget.
Moving into a new place with your significant other and starting a new phase of your relationship is a very exciting time. There will be a lot new things to explore about each other, new memories and traditions and getting through the dreaded money talk with each other will make it all worth it. Create a plan, build a detailed budget and put everything out on the table. The more you prepare, keep an open mind and calmly speak to each other, the smoother the conversation will go.