Advocating for Your Financial Priorities in a Partnership

Feb 15, 2023 | Blog, Financial Health

Everyone knows that money issues are major drivers of conflict in personal relationships. Like most issues in marriages and life partnerships, there is only one way to come to a solution that both parties are happy with: communication. To be productive, communication has to be honest (think full disclosure of all financial issues) and also frank (with both parties being assertive about their concerns and goals). It is difficult to establish and keep open lines of communication about finances, but like most aspects of a long-term relationship, the benefits make the work worthwhile.

There are several ways to calm your anxiety while talking about money. Try a few of these methods and see how discussing your financial goals becomes easier.

If you’re in a new relationship, you have the perfect opportunity to discuss money. That may seem like an odd suggestion, but while you are learning about your partner’s family history and education you can find out a lot about how they view financial matters and share your own point of view.

You can start with casual questions like: “what’s the most expensive thing you have?” or “How much are you comfortable spending on a dinner date?”. And as you and your partner become more comfortable with each other, dig into the most complex questions: “how much do you earn in a year?”, “do you have a budget in place — and do you follow it through?”, and “how much debt is too much debt for you?”. Talking about how your parents handle money can be helpful, too.

You both don’t have to have the exact same approach to money, but you do need to understand and be comfortable with each other’s perspectives. A big spender is most likely to have a lot of conflict with a big saver — opposites may attract, but they have a more difficult time merging their financial lives. While it’s not a romantic thought, you may want to consider your commitment to the relationship if it seems like money conflicts will be serious between the two of you.

If you’re engaged — congratulations! Planning your wedding day is exciting and fun (even if somewhat stressful), but it’s not your most important job during your engagement. Sit down with your partner and talk about the big things in life, including money. Each partner should want to make everything clear to the other before any big commitments are made. The discussion should include assets, debts, income, and expenses. Other important pieces of your financial health include any expected future obligations or positive developments, like gifts or inheritances. Additionally, talk about your personal estate plans and life insurance provisions.

Once all your cards are out on the table, so to speak, your first opportunity to collaborate financially is when you plan your wedding. Use the planning process as an opportunity to discuss your current partnership financials and your joint and separate goals. You can learn a lot about someone by finding out what their priorities are for their wedding day. Do you and your partner prioritize celebrating in an expensive large venue, or would you rather use that money to make a down payment on your future home? Remember, there is no “correct” answer to this question! What’s important is that both people are in agreement or can find a happy compromise.

You must also decide how to merge your financial lives in the long run. There are perhaps as many approaches to this as there are newlyweds. At one end of the spectrum is the “what’s mine is yours” approach, in which both partners merge their previous and future savings, income, and properties, as well as debt and obligations. At the other end is the couple who keep everything separate. For most couples, neither of these extremes makes sense.

In two-income marriages, sometimes couples designate one partner as the spender — their entire income goes to pay everyday expenses — and the other partner becomes the saver — their income goes into a joint savings account or other saving and investing instruments. I often recommend a more balanced approach where each partner keeps a portion of their income and savings in separate accounts, but also contributes to joint accounts for specific purposes. A joint account may be a savings account for a future goal, or it may be a checking account for paying household expenses.

Whatever you choose, remember that you and your partner are a unique combination of your unique experiences and perspectives, what’s right for you and your partner might not be right for others, and that’s ok.

Budgeting is about needs and priorities. Start by looking at your expected joint income. Then plan the big fixed expenses: usually housing, debt repayment (such as student loan payments), and transportation. See where you can get discounts by combining your expenses. Of course, maintaining one residence is significantly less expensive than two. Joint wireless plans are usually less expensive than two separate ones, and it costs less to insure two cars under one auto insurance policy. You may also save some on groceries by keeping one kitchen.

Budgeting gets tricky after fixed expenses and personal needs are satisfied. Options for using any unaccounted-for income are limitless: from charitable giving and supporting family to vacations and second homes to aggressive debt repayment and retirement savings. Agree on your financial goals and go after them.

Of course, agreeing to a budget is only the first step of budgeting as a couple. Equally as important is monitoring how well you conform to the budget as time goes by and modifying either your spending habits or your budget as things change.

What other topics do you consider important to discuss when talking about money with your partner? Please let me know below or reach out to me via Twitter. For more of my thoughts on investing your time and money, please visit my company’s website, LexION Capital.

Elle Kaplan is the founder and CEO of LexION Capital, a fiduciary wealth management and woman-owned business firm in New York City serving everyone who feels left out by traditional “Wall Street”, including women and the families they love.

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