Nearly half of all marriages end in divorce and money is named as the #1 cause of friction among couples.

Money can be a sensitive subject, even taboo for many couples. Remember hearing your parents say “We never discuss money or politics at the dinner table?” We usually avoid talking about financial goals and spending until there’s a problem. By that time, the conversation usually starts with blame and both sides put up their defenses.

Talking about money and how it will serve your life’s dream early and often can be a bonding exercise rather than something that tears you apart. And if you missed the “talk early” memo, it’s never too late to start this in earnest. In fact, I encourage you to continue this conversation at least annually, and eventually bring your children into these meetings. Some families call this a Family Council or Summit meeting. You might be surprised by what you learn when you talk about this subject regularly!

You don’t have to be financial soul mates or align perfectly with your partner’s financial goals and values, but you do need to know where you both stand and create a plan that serves your needs. Understanding each of your financial goals and will help you see your money issues from both perspectives and make it easier to find solutions that work for everyone involved.

How to Use This Guide

Find a time when you can really be present for this conversation. Get comfortable. Have some snacks, beverages, and tissues ready. Grab a pen and paper (or your favorite electronic medium), turn off your phones, and put the kids/animals to bed. Take turns answering the questions, in order. For those that are nervous about this conversation, (totally normal!) you’ll be glad to know we’re starting off with some “softball” questions.

What if the conversation becomes difficult? Take as many breaks as needed. Come back together when you are calm and ready to hear one another. Remember that no one is right or wrong – if you’re in disagreement, it’s a result of different values and goals. A value or goal by nature cannot be right or wrong, so give your partner some generosity and try to understand their perspective. If you find you can’t get through the conversation, please reach out to a financial advisor or therapist to help you. It’s worth the effort to land on the same page!

The Questions

1. What lessons about money did you learn from your upbringing?

This is such an awesome question. It can help uncover self-imposed guilt. Are you determined to maintain a certain social class or climb a rung up the ladder because you’ll feel less successful in your parents’ eyes if you don’t? Are you unhappy in a white-collar career because your adults worked so hard to send you to college and you can’t bring yourself to quit? If your children don’t go to a school as good as yours, would you worry that you’re failing them somehow?

Also, it’s crucial to be honest with yourself and your partner about how or whether the adults who brought you up are role models. What specifically did they teach you that has helped? And in what ways could they have failed you regarding money values?

2. What does the word “money” conjure up for you?

This bit of word association may seem elementary, but its power hit home for me, when a client responded with the word “food.”

The client’s mother was an alcoholic, and their food stamps ran out before the end of each month, so she started working at age 11 and grew up to be a successful academic. Because of that history, it took a lot of work and conversation before she was willing to spend money on things she could easily afford. We had this victorious moment when I got a call one day from the client asking me to come outside and see her new car.

Other common responses to the question include security, freedom, reward, and burden. One particularly honest person answered with the word “control.”

The idea here is to uncover and understand each other’s history and values around money. Usually this one word will spark a longer conversation, allowing each partner to tell their story. 

3. What are our combined expenses (i.e. do you have a budget?)

Share your budgets with each other. If you’re ready to combine financial budgets, online tools such as Monarch Money are excellent. Notice where there is alignment, and where there is friction. Also notice which subscriptions you are both paying – can you save any money on those by sharing?

Remember, it’s normal to judge someone who does it differently than you, but it won’t accomplish the goals of this conversation.

4. Should we combine finances, manage them separately or a little of both?

Many couples assume they will combine finances but it’s not entirely necessary, especially now that many households are dual-income. If you find you are just too incompatible financially, or one earns much more than the other, this might be a way of heading off future problems.

You’ll still need to coordinate budgets so you each pay your part of the relationship’s expenses. There will also still be financial goals you’ll want to plan together. Even if you plan your retirement saving separately, you’ll want to make sure each is saving enough so that the burden won’t fall on one individual spouse later in life.

Here are some examples to get you started, but it’s absolutely suitable to be creative and design a system that works for your relationship:

1. Completely combine finances. Both (or the primary breadwinner’s) paychecks are deposited into one account that is used for the family’s expenses. There is an agreed-upon spending and saving budget.
2. Completely separate finances. Each partner maintains their own banking and credit accounts. Goals are sometimes combined (e.g. we’ll save together for retirement) but it’s not necessary. With this model, all you need to do is decide who pays which bills, who funds what goals, and when (if ever) partners will share resources (don’t skip this part!).
3. Separate but equal. Each partner maintains their own banking and credit accounts, and each contributes to half of the household expenses. The important thing to work out here is what is considered a household expense and what is a personal expense. Household expenses typically include the mortgage, insurances (including life and disability insurance), groceries, utilities, household services, and children’s needs. Separate expenses are usually cell phones, cars, gas, wardrobe, gifts, hobbies, and dining out without your partner. I’ve seen travel fall in either category.
4. Set percentage or set dollar contributions. This is one of my favorites when a couple has a large income disparity. The couple does as the separate but equal couple does above – determines their household budget and individual budgets – but instead of splitting it equally they determine the amount of each of their incomes to contribute. Here are two examples:
   1. Percentage method: Jane earns $100k and Tom earns $50k annually. Their annual household expenses amount to $100k. If they each contribute 70% of their income to the household, they will cover their expenses and have $5k left over (some couples work this to the dollar, some use the leftovers for emergencies, holiday gifts, or travel). Each partner then gets to keep their remaining 30% to allocate to their personal expenses, personal or joint savings goals, and discretionary spending. What I love about this method is it often feels the fairest to each spouse, and as their income grows their contribution to the family as well as their own discretionary funds increases in kind.
   2. Set dollar method: Using the same numbers above, instead of each contributing 70% of their income, the couple will determine an amount each should contribute, keeping the rest for themselves. Sometimes they will contribute their amount to a “family pot” account which pays the bills, and sometimes the couples just make it easy by deciding, for example, Spouse A will pay the mortgage, insurance, and groceries and Spouse B will pay for utilities, kid-related items, and home repairs.

5. What is our credit situation?

Look at each other’s credit scores and credit history. Is there a pattern of missed payments and defaults?

Lenders will usually look at the higher score when a couple applies for a loan but a very low score or bad credit history can doom an application. Above 680 FICO is called ‘prime’ credit and generally considered good credit. A credit score from 580 to 680 isn’t necessarily bad credit but it might make getting affordable rates more difficult.

None of this should be done judgmentally or as a comparison of who has managed their money better. Stay curious and compassionate with each other. It does need to be done though and can help avoid some of the biggest financial blow-ups couples face.

6. What are the debts we are each bringing to the marriage?

This one can be tricky, especially if you weren’t expecting it or have conflicting personal values or opinions about debt.

Each partner needs to be completely honest about their types of debt as well as the amounts. You might decide that the tens of thousands in student debt isn’t an issue but the $15,000 in credit card debt could be a sign of chronic overspending. Again, it’s not about judging your partner, but seeing the whole picture and learning how to work with their money habits.

Beyond the type and amounts of debt, make sure you look at the interest rate on each. This isn’t just as a part of open communication about money but your first step in planning how to pay off that debt as a couple.

7. What is the most one of us can spend without consulting the other?

Asking this money question will save you at least a couple of arguments a year, I guarantee it.

This is just as much a fault of the store salespeople as it is couples. A favorite trick of sales people is to shame a customer into buying something by asking them if they need to ask their husband/wife permission to do everything. Don’t fall for this trick.

Understand that your idea of a ‘big purchase’ might be different from your spouse’s so setting a spending limit can help keep you both on the same page. Many couples set spending limits on things like gifts, charity, entertainment, personal care, clothing, etc. Deciding on spending limits in advance is necessary but remember that flexibility is important in life.

8. What are your savings goals? What does “retirement” look like to you?

Few people even ask these questions of themselves, let alone their partner.

Our retirement goals directly affect how much and when we start to save, and our perspective on saving. If your spouse has much more modest retirement goals than you, they might not be very motivated to sacrifice spending now to save money for later.

More than just aligning your savings though, this question will bring you closer together with shared goals and dreams. It doesn’t just have to be about retirement. Make plans for a home, dream vacations, children’s needs, and other financial goals.

9. How much do we need to save to reach those goals?

This is where those financial goals run head first into reality.

Having shared financial goals means you can save for them together, making it easier to reach those goals. If you’re saving for dramatically different goals, is it realistic that either of you can reach them, and what might you have to sacrifice to do so?

This is also where, both as a couple and individually, you need to look at your spending habits and savings goals honestly. Does your current spending and budget allow you to save enough for your future goals? This also might be a great time to engage a financial advisor, especially if you find online calculators confusing or daunting.

10. What do we do with extra money or savings beyond these long-term goals?

This is an important question most couples miss. They work hard and budget to meet their savings goals and end up having extra money beyond what they planned on saving.

If you don’t talk about what’s going to be done with this extra money, it’s almost inevitable it will cause an argument and foster resentment. One partner will end up spending the extra money, usually thinking it’s no big deal, and the other will feel used.

Decide now what you’ll do with surplus. Consider splitting extra money up into separate accounts you can each use for your own additional spending, creating other financial goals for the money, taking trips or special outings, investing in more interesting or risky ventures, repairs on your home, or donating to charity.

11. Will we be saving and investing in joint accounts for these goals, or separately?

This one relates to the first question of combining or separating finances but needs its own question.

There is nothing to say you can’t separate financial accounts but there are some things that should be planned jointly. Shared expenses are going to follow you through retirement and each partner needs to be saving for their part. You also want to make sure one partner isn’t growing resentful by constantly paying for all travelling or other bucket-list expenses in retirement.

12. Who will be responsible for the family’s financial planning?

There are different levels of responsibility and planning on which a couple can agree. There is long-term financial planning and decision making, and short-term financial management (bill pay, watching the budget, etc.).  

If your goals align closely and each is saving for their share, one person might be fine with managing all the financial planning. Alternatively, perhaps one person manages the long-term planning while the other manages current bills and spending. Maybe one partner is much more adept at financial planning and management, and one has no interest. The possibilities are endless.

However you decide to split up the financial planning, each partner should know they can always be honest and direct with the other about money. Devise a way to communicate about your responsibilities to the household regularly. Do you talk at dinner, after the kids go to bed, during scheduled family council meeting times, via email or text? Even deciding when and how to have these conversations can be extremely helpful.

13. Do we need a prenuptial agreement?

This one is obviously for my engaged friends. Thinking back on everything you just discussed, do you see a need to document any separation of finances? How does each of you feel about prenups (consider naming some thoughts or images that come to mind when you hear the word)? Is there family pressure to create one? If so, do you agree with your family?

Prenuptial agreements can be very helpful in terms of fostering communication, saving time and money, protecting separate property or family heirlooms, defining marital property, and protecting you from your partner’s debt. Those opposed to prenuptial agreements cite lack of necessity in some cases, or the agreement can be unbalanced or disrupt the romance.

14. What do you want your name to mean when you’re gone?

Allow me to wrap up by bringing you back around to what really matters. Picture your family sitting around a campfire at your family compound. The year is 2070. The group is bigger and more vibrant than you ever imagined. Communication flows freely and the family appears genuinely connected and joyful.

You’re a fly on the proverbial wall at this gathering. What are your greatest wishes for that group of people? Who is there? What are they talking about? What is each attendee experiencing individually in their lives? What do you feel most grateful for? What do you wish you could say to the group?

Set an appointment on your calendar to read back through your description two weeks before the next major holiday or family gathering. Considering anything you’d like to do differently or intentionally at this upcoming gathering based on your thinking from this exercise.

Whew! How did you do with these questions? Congratulations if you made it all the way through with your partner. Remember, keep the conversation going! The heart of good financial health in a relationship is communication, understanding, and knowledge of where the money is going and why. Becoming unified in your approaches to finances should start off with these great questions, but it needs to continue with following a budget and meeting regularly to discuss financial challenges, opportunities, and values.

At Wright Wealth, we are trained to facilitate these conversations. Give us a call if you’d like a little support!

Inspired by and adapted from JOSEPH HOGUE, CFA’s 9 Money Questions Every Marriage Needs.

Information is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products, or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this post (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of Angela Wright, an Investment Adviser Representative of Gemmer Asset Management LLC (“GAM”) and should not be regarded as the views of GAM, or a description of advisory services provided by GAM or performance returns of any GAM client.  References to securities or market-related performance data are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see disclosure information: https://www.getwrightwealth.com/disclosure/.