Money can be a sensitive subject, one that many people prefer to avoid discussing, especially with their significant others. However, if you’re taking on large joint bills, moving in together, or planning to tie the knot, it may be time to have the tough conversations and devise a plan for combining finances. To help you along the way, we’ve broken down this topic into a three-part series to help you work toward combining finances with minimal stress.
Be Transparent
Before deciding about combining finances, it’s important to know exactly what each person is bringing to the table. This can be challenging, but having an open and honest conversation is the first step.
Planning for a Successful Conversation
To make this work, start by setting up a convenient time for both of you to talk. Choose a time when there are no work or personal conflicts and nothing else vying for your 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, mark it on your calendar, set reminders, and decline any conflicting invitations.
Next, make a list together of what financial information you want to discuss. This can include monthly bills, debt amounts and interest rates, savings accounts, retirement plans, assets, employer benefits, credit reports and scores, etc. Once you’ve agreed on the list, consider storing it electronically in a shared note or document. This way, both of you can access it and come 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. To avoid this, consider setting a shared deadline to have all 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.
How to Begin Once You’re There
When it’s time to have your money talk, start out by setting ground rules so you both know what to expect. Some examples may include giving each other equal opportunity to speak, not interrupting, controlling reactions (i.e., refraining from judging or getting upset quickly), and being 100% honest, even when the topic is uncomfortable.
Then, proceed in the order you’ve determined. It may be that you want one person to go first and cover all 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.
Keep the Conversation Positive
Stick to the ground rules you’ve set to keep the conversation on track. 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 mindful 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).
Remember, you don’t have to make any decisions right away. The purpose of this discussion is to share information honestly so you can make informed decisions later.
Moving Forward Together
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 a follow-up conversation. 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, you can start making decisions - but don’t rush it. It’s likely that you’ll both have absorbed a lot of new information, and it’s okay to give you both some time to digest it all before moving forward. If this is the case, end this talk by scheduling your second conversation, which should be when you start making decisions.
Want more tips on how to combine your finances? Check out From "Me" to "We" Part II of this series or visit our Resource Center to find more money management tips.
Read Part II – 9 Things to Consider When Combining Your Finances
Read Part III – How to Start Combining Finances
The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Some products not offered by PSECU. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs, or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.