By Gia Miller

Studies have shown that most people would rather talk about sex and death than their money. But when you’re sharing a home and a life, those financial conversations are important, no matter how uncomfortable they might be.

“Money is such an emotional topic,” says Judi McAnaw, a financial advisor for Edward Jones in Armonk. “But you should have that initial conversation as soon as you’re in a committed relationship, however you define that. As soon as finances are involved, you need to have a serious conversation. And the sooner, the better.”

Being on the same page is important throughout your relationship, and yet, according to a 2023 survey by the fintech firm Bread Financial, 64 percent of couples are “financially incompatible” with their partners, meaning their philosophies about spending, saving or investing are different. This can cause one spouse to hide money or spending from the other (known as “money infidelity”) and even lead to divorce.

“Money is one of the biggest friction points in a marriage,” says Nick Preddice, a partner at Affinity Group LLC in Hudson Valley. “So, whether you discuss it over a cup of coffee or open a bottle of wine, you need to sit down and talk about your goals, your ambitions and your desires. Then, you need to wrap money around those goals, ambitions and desires. If you can’t have that discussion, how are you going to discuss all the other things you have to deal with in life?”

So even if you’ve been in a committed relationship for several years or decades, if you’ve never had a deep conversation about your money philosophies and goals, now is a good time to start.

How do you begin?

The best way to begin is to simply ask the question. But don’t spring it on your partner – make a plan to talk about it.

To ease into this topic, plan to have more than one conversation. Your first conversation can look at the big picture, focusing on your overall financial goals and philosophy. Preddice says you should discuss what you hope to accomplish, what’s important to you, and what’s not important.

“For example, I’m a car person,” he says. “I’ve spent a lot of money on cars over the years, and my wife doesn’t get it. But she does understand that it’s important to me because we’ve had those conversations. Similarly, there are things that are important to her that I don’t get.”

McAnaw says another way to start the conversation is to ask your partner how they feel about money and how they feel about debt.

“It’s very important, philosophically, to understand how your partner feels about debt,” she says. “If you have one person who pays off their credit card bills every month and the other person has multiple credit cards with outstanding debt and doesn’t pay them down, then you have different philosophies about how to manage your cash flow. That is going to impact your ability to finance things together down the road. It’s not an easy conversation to have, but it’s so much better to have a frank, open and honest conversation, preferably in the beginning, than to not discuss it at all.”

After you’ve discussed the basics, set another time to go into the details. Prior to this conversation, you’ll each have homework to do.

“I recommend you each complete a budget worksheet (see pages 52–53), so you understand your current spending and income,” McAnaw advises. “You should include all your bank accounts, investments and obligations. Do you have student, home or car loans? Those should be included. You should also think about where you see yourself in three years, five years, ten years, etc.”

Include all your goals during this exercise. Would you like to purchase a first or second home? Do you plan to start your own business? Would you like to start a family or get a first or another pet? They all have a financial impact on your lives.

When you sit down together, take turns presenting your current finances and your future goals.

 “You need to understand how much you’re making and how much you’re spending,” says Preddice. “And for any of those hopes, dreams and ambitions, you need to either build a savings plan or an investment plan. You should discuss what you project your income will be and how you’re going to accumulate the money to pay for your plans. Will there be enough discretionary income to achieve everything?”

Separate but equal 

Whether your relationship recently became more serious or you’ve been together for decades, these conversations will shine a light on your differences. But the key is to work together.

If one spouse makes significantly more money than the other, both experts agree that you should still work together on your finances.

“The person with the most money doesn’t get to make all the decisions alone,” says McAnaw. “It’s still a joint conversation. But that doesn’t mean you can’t have one person who is the decision-maker, it just means that everybody must be in the know. Whenever one spouse says they leave it all to their partner, I always say, ‘It’s great that you’re comfortable assigning that role, but that doesn’t mean you shouldn’t know where every penny is.’ There’s one pool of money, and you need to be on the same page about where it goes.”

And when it comes to deciding whether you should combine all your money into one account, keep everything separate or do a little of both, there’s no right or wrong way to do it. It depends on what you decide to do as a couple. 

“Sometimes people feel they’ve worked hard and want to have their own little pool of money to do what they want and not feel guilty about taking it from the whole pot, and that’s okay,” McAnaw says.

If you choose this route, it’s important to agree on how much each of you puts into your separate accounts and how much goes into your joint account to pay common expenses like a mortgage and food. Or, if you want to keep things fully separate, you should agree on who will pay what bills.

“The problem you might have with separate accounts is if, God forbid, one of the spouses dies unexpectedly and the other spouse isn’t on the account,” Preddice warns. “If you haven’t done estate planning and made sure you each have a durable power of attorney, you’ll find yourself in a surrogate court situation so you can have access to your deceased spouse’s account or accounts.”

How to handle conflicts

What happens if, during your money conversations, you learn that your habits, values or goals are different? Or what if one person’s goals have changed over the years but the other’s have not?

“This is where you have to negotiate and compromise,” says McAnaw. “That’s why it’s so important to have these conversations at the beginning of your relationship, because then you can identify your differences and work together to overcome them.”

What you might learn is that your views on money will require more than one conversation. That’s okay, say the experts. Having difficult conversations is part of a relationship.

“It only becomes a problem if you can’t compromise,” says Preddice. “Any relationship that I can think of, in any set of circumstances, involves compromises. Business relationships involve compromises between an employer and an employee; personal relationships involve compromise; and families involve compromise. It’s only a deal breaker if you can’t compromise.”

But if, after several conversations, you’re still struggling to find common ground, consider seeking help from a third party, such as a financial advisor or couples’ counselor. They may help you work through your differences, but pay attention as you go through this process. Is one partner constantly acquiescing to make the other partner happy?

“You should never go into a relationship thinking that person is going to change into a different person,” cautions McAnaw. “This is one of the most critical aspects of your life. Are you going to be tied to someone who will negatively impact your ability to get a mortgage or purchase a car? Or is this someone who’s going to really partner with you to build a great life together?”

Preddice agrees.

“If you’re finding yourself constantly giving in and the other person is always winning, that’s a problem,” he says. “I’m not a relationship counselor, but it’s not going to work.”

Keep the conversation going

Once you’ve come to an agreement on everything, check in regularly; these conversations should happen at least annually throughout your relationship.

“People typically have them when they do their taxes,” says McAnaw. “But you should also have them if there’s a life event. For example, somebody’s having a baby, there’s a change in career or you’re taking care of a sick family member. Any time there is a significant change, you should sit down and review.”

Your review should focus on how you’re doing day-to-day and towards achieving your goals.

“I think it’s healthier to discuss this quarterly,” Preddice suggests. “Ask yourselves, ‘How are we doing with our budget? Are we allocating the money towards our goals, like we discussed? How is our money working for us? Are we on track?’”

And what happens if you don’t have these conversations?

“Oftentimes, there are surprises, and they’re not always nice surprises,” says McAnaw. “It’s usually fixable, but it’s a lot more difficult or complex to fix.”

So put on a pot of coffee or open a bottle of wine and talk. One day, you’ll thank us.

This article was published in the January/February 2024 edition of Connect to Northern Westchester

Editor-in-Chief at Connect to Northern Westchester | Website | + posts

Gia Miller is an award-winning journalist and the editor-in-chief/co-publisher of Connect to Northern Westchester. She has a magazine journalism degree (yes, that's a real thing) from the University of Georgia and has written for countless national publications, ranging from SELF to The Washington Post. Gia desperately wishes schools still taught grammar. Also, she wants everyone to know they can delete the word "that" from about 90% of their sentences, and there's no such thing as "first annual." When she's not running her media empire, Gia enjoys spending quality time with friends and family, laughing at her crazy dog and listening to a good podcast. She thanks multiple alarms, fermented grapes and her amazing husband for helping her get through each day. Her love languages are food and humor.