Money can be a touchy subject and one that people avoid discussing with their significant others. However, if you’re taking on large joint bills or planning to get married, it may be time to bite the bullet, have the tough conversations, and set up a plan for combining finances. To help you along the way, we’ve broken down this topic into three articles to help you work toward combining finances with minimal stress.
Before you can make a decision about combining finances, you need to know exactly what each person is bringing to the table. This can be challenging, but having an honest conversation is the first step.
To make this work, you’ll first need to set up a convenient time for both of you to talk. Make sure there aren’t any work or personal conflicts or any other events competing for your time or attention. This means it may not be the best idea to talk right before a big football game you’re both hoping to watch or on an evening when you’ll have to work late. You shouldn’t feel rushed or go into it already exhausted. Once you agree on a time, put it on your calendar, set reminders, and decline any conflicting invitations.
After the time is set, make a list together of what information you want to discuss. This can include items such as monthly bills, amounts and interest rates of debts, savings accounts, retirement plans, assets, employer benefits, credit reports and scores, etc. Once you’ve agreed on the list, consider keeping it electronically in a shared note or document so you can both access it and are able to show up prepared.
After your list is created, make a firm commitment to follow through. It’s important that neither of you wait until the last minute to get the information ready. Scrambling to gather documents before your money talk can lead to running late, feeling frazzled or anxious, and ultimately being unprepared for what should be a serious conversation. Consider setting a shared deadline to have all of your information gathered a few days before your talk. This gives you time to process any of your own information that was surprising or stressful before you have to discuss it with your partner.
When the time has come to have your money talk, start out by setting ground rules so you both know what to expect from the conversation. Sample rules may include giving each other equal opportunity to speak, not interrupting, controlling reactions (i.e. refraining from judging or getting mad quickly), and being 100% honest, no matter how uncomfortable the topic may be.
Next, proceed in the order you’ve determined. It may be that you want one person to go first and cover all of their information, or you may want to work your way down the list you prepared and take turns. Talk to your partner and decide what you’re both most comfortable with.
In order to keep the conversation going in a positive manner, follow the ground rules you’ve set. If you start to feel overwhelmed or frustrated, or feel like your partner may be, suggest taking a break to cool off. Pause the conversation, give each other five minutes to stretch, step outside, or move around. Then, jump back in where you left off. Just be careful not to make your break too long or you may be tempted to table the conversation and finish it later (which could end up being never).
While you’re having the money talk, it may start to feel like too much to take in at once. But remember, you don’t have to make any decisions right away. Having the money talk with your partner is simply a time to honestly share information so you can later decide what’s going to work best for you.
Of course, there will come a time when you and your partner have to decide what you’re going to do, so after you go through your list of topics, schedule time to follow up with each other. If you feel like you need more information, agree on what that is and pick a time to talk again. If you think you have enough information, agree on whether or not you’re ready to make decisions that day. If you are, great, but don’t feel pressured to do so. It’s likely that you’ll both have taken in a lot of new information and you may want to give yourselves some time to digest it all before moving forward. If this is the case, end this talk with scheduling the second phase, which should be when you start making decisions.
Want more tips on how to combine your finances? Watch our blog for more From “Me” to “We” posts on options to consider and getting started, and find more money management tips and resources on our WalletWorks page.