The majority of successful couples have one thing in common - effective communication. Being open and honest with your partner builds trust and makes for a stronger relationship.
However, money can often be a difficult topic of conversation. It might be uncomfortable to discuss at times but addressing money management could also be necessary.
To get you started, here are 6 money topics that every couple should discuss:
1. Joint or separate bank accounts
Traditionally speaking, most couples in long-term relationships merge their bank accounts. It’s yet another symbolic gesture of two people becoming one. By doing so, it can be easier to manage two paychecks, tax refunds and other incoming funds. It may also be easier to pay the rent/mortgage, utilities and other bills you share from one account.
There can be drawbacks to merging accounts but many are circumstantial. For example, if one spouse wastefully overspends, it could become an issue. However, setting boundaries and discussing major expenses in advance can lead to a more stable bank account and less friction about money matters.
2. Paying Bills
Paying bills is an inevitable task for most people. If a couple decides to combine their monthly bills, the responsibility to manage so many accounts can be overwhelming at first. Be sure to sit down and go through each bill one-by-one so that all bills are accounted for and each due date is acknowledged.
If one person does end up being responsible for paying all the bills, it is still important for couples to discuss whose income is paying each bill. This way, both partners can be clear on where their money is going and how it is impacting household finances.
From auto loans to credit card debt, both partners should be transparent about all outstanding debts. It may be a difficult conversation to have, especially if one partner has more debt than the other but avoiding the topic could be more harmful in the long run. A sensible approach to tackling debt would be to list out what each person owes and discuss how you plan to pay off the debts together.
Here is a list of common debts:
- Credit cards
- Auto loans
- Personal loans
- Home loan
- Medical bills
If you and your partner are considering options to combine your debt into one payment, a debt consolidation loan could be the answer. Please visit our debt consolidation loan page to learn more.
Bad money habits can create a divide between couples that could be avoided with a budget in place. If one of the partners has a budgeting style they found success with, it could very well work for the couple as well. Each partner usually brings their own strengths to a relationship and this notion can also apply to developing and maintaining a household budget.
For detailed information on how to build and stick to a budget, check out these OneMain resources:
- Free online budget calculator
- 5 Simple Steps to Help You Build a Budget
- Find a Budgeting Style that Works for You
- 5 Tips for Sticking to a Budget
Raising children may not be a traditional money topic but it certainly warrants a discussion. According to a report by the United States Department of Agriculture (USDA), the average cost of raising a child in 2013 was over $245,000. This total considers the overall cost up to the age of 18 and doesn’t include higher education costs or inflation.
The report also mentions that child-care costs continue to rise. If both parents work full-time, data shows that child-care costs are their second largest expense and account for roughly 18% of a child’s bottom line. Housing was #1 (30%) with food (16%) and transportation (14%) at #3 and #4.
Knowing how much it will cost to raise a family could help you and your partner make smart money decisions to prepare for the future. To view an estimate of the potential cost of raising children where you live, try the USDA Cost of Raising a Child Calculator.
Last but certainly not least is saving for retirement. According to a Time.com MONEY poll, 79% of millennials and 91% of baby boomers say they are in agreement with their partners on saving for retirement. However, the same study also found that 10-14% of baby boomers and up to 40% of millennials don’t know their partner’s retirement account balance or when their partner plans to retire.
That said, start your retirement discussions early. What age do you want to retire? How much money can you afford to put toward retirement each month? If neither one of you fully understands how to plan for retirement, it may be wise to find a financial coach. A professional could provide guidance on what approach is best for your goals and offer suggestions you may not have considered before.
Keep an open mind
As with any serious discussion with your partner, remember to listen and keep an open mind. You may have to endure a few tough conversations but finding harmony with money management is possible with some patience and understanding. Good luck!