Chapter 2. How to discuss money matters honestly and openly?
It may not be easy for you to immediately dive into discussing money matters. So, how can we discuss money matters honestly and openly?
How to
A wise approach is to include financial goals into the discussion of personal goals, which could act as an icebreaker to discussing money matters. By sharing your financial past, present, and dreams for the future you and your partner can warm up to other complicated financial discussions including income, debts, spending, saving, and investing habits.
Most couples enter a relationship without making a decision of whether they should consolidate their finances or keep their personal accounts separate by not sharing any assets and/or liabilities. This decision should be one of your priorities, as it establishes the basis of all future financial transactions in a relationship/partnership. It is important to know if you would enter a committed relationship/partnership with joint debt or debt that will continue to be paid off individually. The same is true for assets. You should determine how you would handle your long-term assets, whether that be joint or individually.
Once you establish a basic understanding of the financial direction in your relationship, it opens the door for you to discuss on a granular level these additional topics:
- Who would keep the budget?
- Who would handle the bills and bill payments?
- How would you make money decisions for common purchases?
- How would you handle personal spending?
- How would you share planning for financial goals?
- How do you decide on needs and wants?
- Who maintains saving and investing?
- How do you handle tax obligations and filing responsibility?
- How do you plan for emergencies?
- Who would carry the insurance responsibility?
- How would you plan for retirement?
- What financial wisdom do you plan to leave for your family?
Other topics should be added to your list of discussion. It is advisable to establish an open and an honest communication around money management topics using specific financial data. You need to avoid casting blames or keeping scores if your goal is to reach financial stability in your relationship.
Practice
Now that you know how to approach discussing money matters, think of paying it forward and discuss your experiences with a friend or a family member.
Congratulations! You can move on to Chapter 3. What are the deal makers and deal breakers in relationships?
To review the full module on Money and relationships, click here.