How to Talk About Finances with Your Partner
When you're in a committed relationship or marriage, finances need to be agreed upon in the present and the future. Whether you're the frugal one or the one who likes to spend all you have, if you're joined with another person then your financial decisions will affect that person as well.
What are Common Financial Decisions that can Cause Conflict?
Common conflicts in a relationship involving money are disagreeing about how much money to save periodically, spending on monthly necessities, paying for brand names or generic brands and how much to spend on non-essential items. Are you the type who likes to use coupons and save for future purchases or are you someone who spends your whole paycheck and buys items on credit? If you're in a relationship and you feel like your partner's spending habits are the polar opposite of how you like to spend your cash then you're probably fighting more and your relationship might be suffering because of it.
First Track How Your Money is Being Spent
Before having a discussion with your partner, you should first track where all your money is being spent by using an online banking system or free online software. If you track how your money is being spent on a monthly basis you can hone in on purchases which were not necessary or too pricey. This can be more difficult if you have separate bank accounts or your partner uses cash for purchases. You'll need to track all forms of spending - credit cards, ATM cards, cash withdrawals and so forth. This way you will have a master view of all purchases and how much you are saving.
How to Avoid Conflict While Discussing Finances
Communicating that you disagree with how your money is being spent with your partner is difficult to do without creating conflict. Most people who spend money frivolously will try to defend their actions and explain their spending habits are normal. If your partner is accustomed to a particular lifestyle it can be difficult to break those lifestyle habits of spending. You don't want to make harsh accusations or act patronizing. You and your partner are a team so try to initiate a conversation using the word "we" to show you are 50% as responsible for the spending habits as your partner is. Also show that you have taken the time to research your findings. Below are a couple examples of how to initiate a discussion about your finances.
"Can we discuss our finances? I think that we could be saving more money for our future."
"I feel like our finances aren't being spent as optimally as they could be spent. I've used a software tool that is showing we could be saving $300 in our monthly expenses. Would you mind taking a look at this information with me to see if you agree?"
Discuss How to Spend Money So You Can Track Your Spending
To be able to track your spending habits you need to be able to access the transactions from your credit card and bank account. If you are using cash for weekly expenses you'll spend hours adding receipts up and this won't be the most effective way to track your spending. If you can both agree that you'll make all purchases with a Credit Card or ATM card this will help track your spending much easier.
Find a Common Ground
Whether you are trying to curb monthly expenses, have a savings account or investing for your future - There needs to be a common goal which you both can agree on. Talking to a financial adviser together can close the gap between you and your partner while you learn all your financial options. Maybe you are saving for your child's education and your retirement at the same time. A financial adviser will show you the best ways to diversify your savings plan and your monthly budget.
Stick to Your Spending Plan
Saying you are going to spend a certain amount monthly is easy to do. It is much more difficult to stick to your guns and be proud that you consistently are within your monthly budget. Do you ever notice couples fight more than usual while they are shopping for groceries or necessities? Try to stick by your plan by making lists before you go out spending. You can also further save money by gathering coupons online before your weekly shopping trip.
Agree to Space Out Your Bills Weekly
Agree to set specific dates for auto bill pay during the time of the month when your bank account will have the balance to cover your bills. Say your mortgage bill or rent is due on the first. Have your cable, internet & phone bill be due on the second week of the month. Have your auto insurance and utility bills be due during the 3rd week of the month. The last week of the month will go towards your mortgage or rent payment on the 1st of the following month. Spacing out your bills on a weekly basis will make paying your bills easier.
Don't Argue on Daily Purchases
Are you still disagreeing on daily purchases? Try not to voice an argument every time you don't agree with how your partner is spending. This can really drive a wedge in between you both. You can offer suggestions to show the lower price for generic name brands or sale items which are similar. Say you yourself can't live without a particular name brand of expensive coffee. Search for coupons for coffee online or in your local weekly ads. Show your partner that you are making an effort to lower your own spending. Sign up for weekly deals with Stores that offer special sales on items you or your partner regularly purchase. It takes a bit of extra effort but if you know that you're saving money then you won't be arguing as much over common purchases.
Pair Up and Talk Periodically
It is a good idea to sit down for 30 minutes once a month to talk about your finances and take a look at your online financial software stats together. Get together with your financial adviser a couple times a year if you have one. If you communicate about your finances periodically there will be more understanding and confidence in your relationship or marriage goals for the future.