Talking about money with a spouse or partner is usually difficult, but never more so when the two of you share finances but have diverging goals. Maybe one among you wants to save for a home while the other prefers to prioritize paying down debt. While you may be a saver, your partner may want to use the fund for home improvement or travel.
How do you & your partner sail through when you aren’t on the same boat regarding money?
1. Work together to determine short- and long-term goals
Sit together & discuss
Juggling the financial needs of two people is a lot easier if you know what each other’s priorities are, both now & in the future. These may include short-term goals such as buying a new piece of furniture or planning a trip, but they should also include more long-term priorities such as paying off student debt, purchasing a home, or maybe anticipating a future career change.
Highlight the instances where you are aligned. You should also identify the areas of differences & understand why you & your partner want the things you want. Your partner may prioritize travel because they want to experience new things. While you may want to spend money on a home because you crave a sense of security. Both of those desires are perfectly reasonable, but they could end in opposing financial goals.
2. Decide the way to manage money in shared accounts
If you and your partner don’t share financial accounts, you almost certainly don’t have an excessive amount of trouble dividing your finances. You might both contribute to joint expenses, like housing payments, groceries, and shared transportation, but when it involves discretionary spending, you’ll only use your own money, because you don’t have access to your partner’s.
But things are often trickier for couples with joint accounts, when “my money” and “your money” suddenly become “our money.” If one partner features a significantly higher debt load than the other, or if there’s an outsized income disparity, it is often hard to make a decision who calls the shots when it involves joint income.
One way to avoid conflict is to keep aside money monthly from the overall household fund for every person’s discretionary spending on things like eating out or going to the movies. That way, no one has to feel like the gatekeeper. As long as an expenditure falls within your individual budget, you’re free to do as you like. This leads us to our next point.
3. Learn to distinguish household vs. individual needs
To reiterate the purpose above, it’s important to form distinctions on your budget between shared needs, like rent, utilities, and groceries, and individual needs, like clothing, entertainment, and hobbies.
For example, if you (but not your partner) like to watch football and are willing to pay extra cash for a premium cable package, that’s a private need. However, if your car breaks down and you would like to check your savings to hide the repairs, that’s likely a household need.
Try making a list of your and your partner’s financial tasks, especially points you disagree on, and label each one as an individual or household need. When compromising on where your money goes, it’s generally better to ensure shared household needs are covered first. But also be aware that the things you identify as an individual or household expenses could change over time. So, as your relationship progresses, check regularly to reevaluate what goals you would like to figure out together and what you’d like better to keep separate.
4. Communicate clearly, openly, and often
Finally, open communication between you and your partner is the most important step to finding a financial compromise. And remember, if your partner makes a mistake with your joint finances, try not to hold it against them and keep the dialogue open. As your relationship evolves, so will your financial goals. Your priorities today will change over time with life stage and circumstances.
Be transparent about where you spend your money and what your financial goals are, and leave room for your partner to supply input also. While you’ll have diverging priorities, there’s little or nothing that can’t be solved with a healthy dialogue and an understanding that you’re on a financial journey together.