A quick Google search for “money and relationships,” yields plenty of results. The tone of those results, however, is quite dire. We’re talking, “Winter is coming” type stuff: Don’t Let Money Ruin Your Relationship, How To Avoid Letting Money Destroy Your Relationships, and The Money Problem Most Likely to Kill a Relationship. And although this isn’t just fear mongering, we know there’s another way to talk about couples’ finance without signaling doom.
Talking finances is often an awkward conversations, but having that awkward conversation is crucial for laying a solid financial foundation for your marriage. In fact, couples that regularly talk about money are happier in relationships. Of those that talk about money at least once per week, 42 percent described themselves as extremely happy. Of those that talked less than once a month, 27 percent. That in itself is telling.
1. Talk frankly about debt
Let’s get straight to the most awkward topic: debt. First you should know that debt is normal. Most American adults carry some sort of debt, whether on credit cards, student loans, or a home mortgage. Debt can even be part of a healthy financial life—but only if you’re honest about it. A strong financial foundation as you enter into newlywed life requires the truth, even when it’s hard to tell. You both want a clear understanding of each other’s’ debt, especially as you’re combining finances, in part or in whole. That leads us to the next tip.
2. Don’t judge
For a lot of people, talking about money creates feelings of shame. It’s hard to own up to bad financial decisions, especially from your late teens or early 20s when you experienced the wonder (and danger) of credit cards for the first time. There’s this phrase in economics, sunk cost. Investopedia says, “a sunk cost is a cost that has already been incurred and thus cannot be recovered.” Further, “sunk costs (past costs) are excluded from future business decisions, because the cost will be the same regardless of the outcome of a decision.”
We suggest applying that same principle to your personal finances as a couple. In other words, forgive your partner (or yourself!) for past money mistakes. Discussing finances as a couple it is not the time to keep score. It’s healthy and important to acknowledge that what’s done is done. What’s sunk is sunk. Not only is this approach fair, it’s good practice for conflict resolution generally. Enter hard conversations, especially around money, with grace.
3. Make it habitual
As noted above, couples who talk regularly about their finances are happier and healthier. In other words, couples who make financial conversation a habit are better off. There’s plenty of research on habits and how to create them (or recreate them). One requirement for creating new habits is tapping into existing behaviors. Do you have a Sunday morning ritual with coffee and the newspaper? Try adding in a brief discussion of weekly finances. Another idea is to have a payday chat. It’s a great “reset” of sorts, and the perfect time to talk about finances for the next two weeks. Put it on the calendar and stick to it.
4. Leave room for the fun stuff
Budget talk doesn’t have to be all business. It’s also a great time to dream about your future. Do you want to go on an epic honeymoon? Buy a home? Or just the extra income for a monthly date night? These things are exciting and important, but they do require an openness about your financial situation. When you learn to budget and have a clear idea of how to strategically save for the special things, you can set realistic goals as a couple and feel good that you’re making big decisions together.
5. Find the right tools
Maybe you’re a financial planner and you have all the tools necessary to combine your finances and stay organized. Good for you! The reality is, however, that most people are not equipped to stay on top of their finances as a couple. Add to that the complication of bringing your money matters together for the first time in a meaningful way, and you can see how a little support can go a long way. You can always start with the traditional Excel spreadsheet, but in a world where every problem is ripe for innovation, there are a few great new tools on the market.
Our favorite? Honeydue. (Cute, right?)
Honeydue is a personal finance app for couples that takes the friction out of managing money together. The app also lets couples stay on top of money matters in other ways. You can comment on individual transactions and manage bill reminders together, all in a way that is beautiful and intuitive.
Tell us more!
How are you navigating finances as a couple? What are some tips and tricks you’ve used to make sure you’re creating a solid financial foundation as you enter marriage? Leave a comment below or chat us up on Twitter or Facebook!