When did you and your partner have the talk? The money talk, that is. Financial communication is one of the most important aspects of any relationship. And it can be challenging.
Have you ever had the experience of an ATM receipt reading “insufficient funds” because your partner paid a bill from your joint account earlier than you were expecting? Minor inconveniences such as these can lead to larger relationship problems. In fact, according to a recent study, 21 percent of couples cited money as the reason for their divorce. Discussing finances with a partner can introduce complexities into your relationship, as everyone has a different approach to managing money and debt. For instance, you may be comfortable taking risks with your money, but your partner may still want to keep their savings under their mattress.
The importance of talking about money with your partner transcends generations and relationship status. For example, while millennials may carry more debt from things like larger student loans, they have benefited from more attractive mortgage rates than previous generations. There are always important financial topics for you to discuss with your partner at every stage of life, like whether you are legally responsible for the other person’s finances or if you are just helping them set goals to pay down debt. According to Lisa Doering MacKenty, CFP®, Vice President and Investment Consultant, at Rockland Trust in Edgartown, “financial planning for all generations requires establishing a balance between debt, retirement, investment, housing, recreation and cash flow.”
Where (and How) to Start Your Conversations about Finances
While planning your financial future, it’s important to sit down with your partner to review your financial goals and ask the right questions. Are you planning to save for a car, wedding or home? Are you both saving for retirement? Do you or your partner have a car loan, credit card debt or student loans to repay?
Talking about finances might not be as fun as binge watching Netflix, but it’s critical to get on the same page for your financial, and often emotional, health. You will appreciate having an awkward conversation now rather than experiencing a life-changing surprise in 50 years when you’re looking to retire and realize your partner hasn’t been saving properly or is carrying more debt than you assumed.
Much like we all have different personalities, we all have our own personal approach to financial management. It’s possible your partner carries more debt, earns less money or is simply not a good saver. This may make it difficult for your partner to open up about their financial situation, so it’s important to remain empathetic throughout the process.
How Couples Can Stay Financially In Sync
While each relationship is unique, the following tips can help turn you and your partner into a financial dynamic duo.
You and your partner can reach the financial mountaintop together. Please stop by a Rockland Trust branch today and see how we can help.
Rockland Trust Company and Rockland Trust Financial Services are not registered brokers/dealers and are not affiliated with LPL Financial.
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