How to Talk about Money with your Partner

How to talk about money with your partner? When two people decide to be together as a couple, they are certain to spend a good deal on things or experiences that mean much to them. If they decide to go long-term, much thought will be required on managing their finances, whether jointly or in separate but parallel directions. How can a couple navigate that passage and have a stronger union for it? Here are some ways.

Money talk: Initial dealings

A couple should take the time to sit down and discuss the true state of their personal finances. This will be essential to determining who could be, say, spending beyond their means or noted for their thriftiness. The discussions may also touch on either person’s attitudes towards money growing up, as some lessons learned back in the day are worth relearning for the future. Some may claim being honest about finances early on and resolving to work on them can be a precursor of how a couple can manage their assets if they get married. 

It may also be a time to admit if you ever bought anything covertly and took great lengths not to let your partner find out. A Finder survey from 2021 revealed that at least one in four Australians lied to their partner about their finances or hadn’t come clean to their partner about certain items they bought on occasion.

The Ledger

A couple must spare the opportunity to track down all their important expenses for a recent period of time and map them out against any goals they have for the future. A comprehensive listing of assets, liabilities, and net worth, plus credit scores, also works to help each partner have a big picture of their financial situation. 

The accounting may be possible if the couple prefers to do it separately or together in a closed environment, during a specially planned day. 

Money talk: Future goals

Once a general accounting is done, you and our partner can start mapping out possible goals for the future. Are you considering going back to school for advanced studies? Preparing to move in together? Laying the groundwork for a wedding or elopement? The possibilities are endless. 

Settlements

Depending on the results of your general accounting, some liabilities may appear that require payment in due time. These include existing loans, credit-card debts, and other recurring expenses. From there, you and your partner can make the determinations to which should have more immediate priority to be paid off. You may also use accounting to cut back on unnecessary expenses. 

If loans and credit cards are successfully paid off, some finance experts say that bolsters a couple’s credit history, which can look favourable to lenders they may approach for a future loan. 

Money talk: Shared accounts?

There are couples who may consider running joint accounts, as another test of their commitment to each other. However, there are hurdles to cross over before taking that step. 

If you and your partner are interested in opening a joint bank account, research the science of operating one and approach your preferred bank together for the application. Make sure that only the two of you have access to it and the subsequent statements, plus being able to maintain the balance. There must also be safeguards to closing the account together if things don’t work out.

If a shared credit card is in your plans, you will have to review your current credit history and the state of any existing credit cards before you ever apply for one, as this will test your capability to make repayments on the joint card. Even if your application is approved, both of you must agree to only use the joint credit card when it is absolutely necessary and commit to repayments fast.

Job contingency

A couple may also have to save more money in either a personal or joint emergency fund, to cover daily living expenses if either one is no longer drawing income due to employment situations. Some experts claim that building up a sufficient rainy-day fund and effectively managing it avoids the hassle of taking out payday loans that may carry hideous interest rates and other charges. 

Money talk: Improving financial literacy

Some couples may want to better themselves in the finance field by attending financial literacy courses. A number of companies offer financial literacy courses and you can also look up certified financial advisors who can guide you in your future plans. It may also be a good time to  invest in notable finance guides and take the time to study the lessons, especially when some guidebooks have templates for saving plans. 

Financial agreement

Couples who may have assets intertwined or want to keep certain things separate can consider entering into a financial agreement. The agreement details the assets the couple owns and how they would be divided in case the relationship is no more. However, drawing up the agreement requires much discussion between the partners and consultation with a solicitor. 

Some say money woes are one of the main triggers behind couples breaking up. A little understanding, emotional support, and financial management will keep things together. 

If you liked our “How to Talk about Money with your Partner” and find it useful, check our blogs regularly for more information on how to get out of debt and get updates on personal wealth apps in Australia.