Three Ways to Help Couples Discuss Money Management

It’s well documented that over half of first-time marriages in the U.S. will end in divorce, with money being a driving factor. Conflict in marriage is normal as it is the coming together of two people who may share similar values but with critical differences. Money isn’t easy to talk about for anyone, but it is key when joining families. There are ways to get comfortable with having tough money conversations with your partner. Here are three ways to minimize financial conflict:

Communication

As with all relationships, communication is key. Whether you are engaged or are decades into a relationship it’s important that couples have open and honest conversations about their finances. They should each express their views, expectations, and financial goals and make a concerted effort to come to a common ground. Couples should also share where they are financially, which includes but is not limited to their income, expenses, assets, and liabilities. There should be no hidden surprises as there are situations where one partner discovers the other has hidden debts or bank accounts which lead to major sources of distrust. Having open and honest conversations will allow each person to know where they stand and what they each bring to the table. Communication should be ongoing.

Goal Planning Session

If couples don’t know where they are going, it’s going to be hard to get there. Couples often can be at different ends of the spectrum, where one spouse wants to buy a home in retirement, while the other plans to travel the world. Goal planning is critical, so couples should establish their individual goals and collective goals. They should also segment their goals based on time frames—short-term, which is one year or less, and long-term, which is greater than one year. Goals should also be ranked in order of priority, which ensures they are not only being met but also helps to reduce stress.

Combining Wealth

Combining wealth depends on each person’s circumstances. However, there should be at least one joint account used to pay household bills and one account for their bills. If one spouse is coming into a marriage with inherited wealth, it might make better sense not to comingle their wealth to avoid disrupting larger estate planning goals.

Money, marriage, or partnership can be difficult to navigate as everyone’s situation will differ. Some will come into a marriage with more wealth than their spouse and some may come into a marriage with children from previous marriages or relationships, which can add a layer of complexity. The situations can be very difficult to navigate on your own, which is why it’s important that you work with your attorney, tax advisor, and financial advisor to craft a plan that works for you.