Ask couples what they most often disagree about, and there’s a good chance the answer will be money. Indeed, finances are a cause of nearly 25% of divorces, according to the Institute for Divorce Financial Analysts. And at the root of many of these arguments is a lack of communication. In a 2014 survey by the American Psychological Association, more than one-third of people said talking about money made them uncomfortable.
Even though it can sometimes be challenging, and while the specific financial matters that most concern couples will ebb and flow throughout life, all spouses should plan to have these five important money conversations regardless of their age, income, or goals.
1) What financial assets and liabilities do we bring to our marriage (and how do we handle them)?
James McKown, CFP®, Financial Planning Manager at Wells Fargo Advisors, says couples who plan to marry should talk about what assets and financial obligations each brings to the relationship and how they’ll deal with them as spouses. (Ideally, this talk will happen before tying the knot.) Generally speaking, McKown says the more you each bring to the relationship — in terms of assets, debts, and even children — the more crucial it is to have a financial plan that suits both of your interests equitably before you wed.
2) Who will manage the different aspects of our financial life?
If one spouse is comfortable managing investments and the other prefers to handle the monthly budget and bills, for example, McKown says it’s fine to divide tasks and designate household financial duties based on your individual strengths and weaknesses. Regardless of how you assign who will handle various aspects of your finances, McKown says spouses need to make a standing date at least once a quarter to review finances together.
“It’s important to meet so you don’t start to wonder what the other is doing,” says McKown. “You don’t need to know everything about a stock or bond if you’re not the spouse who chooses where to invest the money. But you should know the process your spouse uses, where the money is, and who is managing it.”
3) Are our goals aligned?
The financial goals you set as a couple have to be shared and agreed to as you move through life — especially if you have different financial personalities. “Goals give clarity to what is reasonable (or not) and where you may need to agree to make adjustments to reach them,” says McKown.
Even beyond goals, you should discuss financial priorities. If saving is important to you because you’ve been through money struggles in the past, be open and share that concern instead of silently worrying that your partner is more of a spender.