Talking about money with your significant other can be challenging, especially if each of you come from different financial backgrounds or had different family experiences growing up. According to Dave Ramsey, money is the greatest source of arguments in a relationship. Using the tips below, you can reduce the stress that comes from talking about money with your significant other and build a stronger and more stable partnership.
Living A Realistic Lifestyle
If you and your partner have different tastes in food, clothes, or vacations, you probably disagree on more than just small details. Often in relationships, one member will be accustomed to a fancier lifestyle, or going to expensive restaurants that can run up bills of hundreds of dollars. The most important thing to remember when talking it out is to match your lifestyle to your real income, not the one you wish or want others to think you have. Dave Ramsey instructs to keep in mind that compromise is the most important part of a strong relationship can help each of you keep your cool when talking about what to buy or where to stay, so a splurge in one area might mean cutting back a bit in another.
Bring Up the Past
Being open and honest about things is key to good relations with your significant other, but it's especially important to tell them about your financial situation, even if it's not as good as you might like it to be. Forbes suggests disclosing things up front like debts, sources of income, investments and other assets and obligations up front so they don't come up later and cause a surprise or an argument.
Be Responsible About Risks
If you're planning to invest, Kiplinger notes that you need to talk with your partner about risk tolerance is essential to making sure both parties are satisfied with the returns. Some people prefer to play it safe, investing in low risk stocks or bonds, or even simply keeping money in a savings account or treasury bills for maximum peace of mind. Others may want to see their money potentially grow more quickly and so prefer stocks that could go boom or bust, or investments in start-ups or other early stage companies. Talk about creating a portfolio that balances these desires and provides a reasonable return with relatively low risk, or even consider separate investment accounts entirely if funds are available.
Separate Credit (And Maybe the Rest)
Combining finances is truly a large step in combining your life with your significant other, and if you have very different financial situations you may want to avoid it entirely until things are more in sync. This goes for credit, too. If one partner has a great credit score and the other not so much, simply being together or getting married won't have any effect. But Opploans warns to be wary of opening a joint credit card, taking a mortgage, or other actions that join you together in a credit relationship. If you do, make sure you've made it totally clear with your partner what is or isn't acceptable financially regarding the account, because now you're both on the line and mistakes or delinquencies will start showing up on both of your credit reports if something goes wrong.
You and your significant other can create an amazing life together, including total financial security and independence. Talking about money can be tough, but it's absolutely essential to these goals and will strengthen your bond in the long term so you can enjoy the fruits of your labor in harmony.