If you and your partner can talk about everything from what to have for dinner to where to go on your next vacation but, somehow, you can’t bring up the “m” word, or worse, the “b” word then maybe you need some tips on how to talk to each other about money and budgeting.
While these stereotypes exist, what this really means is that people tend to approach money and budgeting from very different places. For example, we are all affected by how our parents managed money and what their attitudes were towards saving, spending and debt. In fact, it has been suggested that the way you talk about money will mirror the way you handle other complex and often dividing issues in your relationship.
Take the time to sit down with your partner and discuss your career goals. Do you plan on working through to retirement or taking time off for children, travel, etc. Do you long to work for yourself? Are you looking to gain experience and then launch your own business in a similar industry? All of these questions will affect your lifetime earning pattern and potential.
Let’s face it – you need to spend money to live. But you’ll want to make sure that you’re on the same page when it comes to how you’ll spend your money. Do you want luxury travel while your spouse is always thinking home renos? Will you each report all of your spending to the other or is there an amount of money that you can spend without accountability?
Now is the time to figure which one of you is the better number cruncher. Or maybe you’ll share the tasks of banking, paying bills and budgeting. If you decide to allocate this responsibility to one partner, there should be regular scheduled check-ins to make sure everything is staying on track and you are both fully aware of how much you have and where it is.
This one could be the trickiest topic. Be sure to include not only how much you think you should save each week/month/year but what are you saving for. Are you long term savers for retirement or are you short term savers for that new big screen TV? Or a little of both? And what about insurance protection. Do you have enough to ensure that your current lifestyle and future dreams aren’t at risk?
This one is basically a discussion about your risk tolerance. Is one of you more risk adverse than the other? This could cause problems when it comes to investing your money. If one partner always wants to play it safe, and the other is willing to take giant leaps of faith, then you need to decide how much of your money will be invested in safe bets and how much will go to more risky ventures.
No one wants debt. It can feel like a dark cloud over your head but throughout your life you will most likely incur at least some debt. While you can save for a new dishwasher or a vacation down south, it’s harder to save all the money you will need to purchase a house or a car. This is where debt comes in. It is important that, as a couple, you agree on what you are willing to go into debt to purchase and how you plan on repaying that debt. Understanding how long it will take to pay off your purchases can help you decide when, and how much, you are willing to borrow.