With Valentine’s Day coming up this week, loved up couples everywhere are talking dinner plans, presents and romantic gestures. But there’s one other thing you might want to bring up with your special someone and that’s money.
Because, ok, while financial discussions might not seem like the most romantic topic under the sun, having an open and honest conversation with your partner about money management and financial goals is an important step in any relationship.
But, since it can also be a tricky subject to bring up, Kirsty Lamont from comparison site Mozo has shared five money conversations that you might need to have with your significant other and her tips on how to tackle them without killing the mood.
1. Where you stand at the moment
First off, it’s important to know where you and your partner currently stand financially, both together and independently. This means knowing how much they earn, what debts they’re nursing and their attitude toward money. It might be a little uncomfortable at first, especially if there’s a big difference in your circumstances (for example, if one person earns significantly more), but laying your cards out on the table like this sets the scene for an honest and productive discussion.
Whether you whip out bank statements and credit card bills or simply list off what you have and owe, the important thing is to be upfront. Oh, and try to reserve judgement if some guilty secrets are revealed – remember that you’re in this together!
2. How much you spend (or don’t)
Often what annoys us most about our partner’s money habits are the little, niggling things. If you’re the frugal one, maybe it kills you that they insist on buying lunch every day. If your partner is the penny pincher, maybe you get frustrated at price comparing petrol in three different locations before filling the tank.
This conversation is all about compromise and containing any potential budget blowouts. First up, admit what bothers you about your partners spending habits, and listen to what bothers them about yours. Then sit down and work out a budget together, and don’t forget to agree on a weekly amount for discretionary spending. This is your cash to use how you like, and your partner isn’t allowed to criticise your spending choices – and vice versa!
3. How you will grow your money
One important part of any healthy relationship is planning for the future, and that definitely includes your finances. Improving your financial position as a couple is an important step towards major milestones like buying a house or getting married, so talking about how you’ll grow your savings stash or increase your earning potential is key.
For this one, try creating an action plan. Narrow your ideas for improving your finances down to two or three options, for example, maybe you’ll tighten your budget to plump up your savings, and invest money to set up another income source. Then tackle the specifics – if you’re investing money, how much do you have to work with? How will you invest your money? What risk level is acceptable? Hammering out these details before you start will help avoid any misunderstandings later on.
4. What are your financial priorities
Everyone has different priorities for their money, and knowing what your partner’s are is the best way to stay on the same page as far as money management goes. But money talks get difficult when you and your partner don’t see eye to eye – he wants to buy a house, you’re always planning the next big travel adventure. She’s focusing on her savings, you’re trying to pay off debts.
If this is the case, sit down with your partner and ask yourselves, “If I had $100,000 what would I do with it?” Then you can discuss why you each chose what you did, and how one person’s goals affect the other. For example, if the fact that a home loan deposit is nowhere on your partner’s list makes you sweat, now’s the time to bring it up and find a compromise.
5. Do you need financial help
This may be the hardest conversation to approach with your partner, but sometimes it’s the most important. It’s one thing seeking financial advice for your own circumstances, but it’s far more uncomfortable to suggest your partner might need professional help to tackle their debt or kick bad spending habits.
But it’s better to do it earlier rather than later, when the problem has grown even worse. This one calls for a private, sit down conversation, where you can calmly and carefully get your point across. This can be a touchy subject, so watch how you speak about it as well as what you say. For example, saying, “I’m concerned about the effect this is having on our financial position and I think we should consider getting some help” is much less confronting than, “I’m concerned that you’re not handling this well, and I think you need some help.”
And if the shoe is on the other foot and your partner mentions their concerns about your own finances, try not to get defensive, and instead, understand that they’re trying to help and be open to finding a solution.
Kirsty Lamont is a Director at financial comparison website mozo.com.au. She is passionate about helping Australians get a better money deal and helping them make better, more informed choices.