Why Discuss Money with Your Partner?

Why Discuss Money with Your Partner?

February 06, 2024

Does that sound threatening? Communicating about money with your significant other actually can be healthy for your relationship. Couples with  similar financial values can simplify the processes of designing and meeting shared financial goals. Here are a few topics to consider:

  1. Credit scores, debt, and income. Being open about your income and how you choose to save and spend is one indication of you and your partner are pulling in the same direction. Comparing credit scores, good or bad, is one way to assess financial health
  2. Assets and liabilities. Discussing what you own and what you owe is another good place to start. Your assets and liabilities can help to define where you are today. And can be a starting point for discussing financial goals. Similar? Different?
  3. Money roles. One way or another, couples decide who will pay which lifestyle expenses. Why not talk it over? You might take on responsibility for certain expenses, or just some categories. Or none of them. Thes are highly personal decisions, no one size fits all. Joint accounts or single-titled bank accounts? Powers of Attorney? It’s just a good idea to talk through who’s going to pay for what, and how to manage household finances in any emergency.
  4. Investing. Defining longer-term financial and legacy goals merits a discussion too. For example, how to planning and save for retirement and any legacy gifting. And, how to manage if suddenly things change due to accident, disease, or other misfortune.

Everyone has ideas around money. Maybe based on how finances were managed growing up. Maybe later personal experiences. It may not be easy to talk about money, but it’s certainly important. Money and financial issues are common causes of breakups. And two heads can be better than one!

Ramsey Solutions, a leading company in financial education, conducted a study whose results it published in in 2018 to determine how couples at that time were communicating and relating to each other around the topic of money. Money fights turned out to be the second leading cause of divorce, behind infidelity. Results show that high levels of debt and a lack of communication are significant causes of household finances' stress and anxiety. Interesting key survey findings include:

  • Nearly two-thirds of all marriages start in debt.
  • 43% of couples married more than 25 years started off in debt, while 86 percent of couples married five years or less started in the red — twice the number of their older counterparts.
  • One-third of peoplewho say they argued with their spouse about money say they hid a purchase from their spouse because they knew their partner would disapprove.
  • 94% of respondents who say they have a “great” marriage discuss their money dreams with their spouse, compared to only 45 percent of respondents who say their marriage is “okay” or “in crisis.”
  • 87% of respondents who say their marriage is “great” also say they and their spouse work together to set long-term goals for their money.
  • 63% of those with $50,000 or more in debt feel anxious about talking about their finances.
  • Almost half (47 percent) of respondents with consumer debt say their level of debt creates stress and anxiety.

 

Discussing money with your partner may not be easy, but it is essential to a healthy relationship. If you need help starting that discussion, schedule a meeting with your financial professional.

 

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.