Did you know that 73% of married or cohabiting Americans say financial decisions are a source of tension in their relationship? Taking that next step in your relationship can lead to a feeling of unease but It’s important to have open communication in all aspects of your life when building a trustworthy relationship. Below are a few ways that can help you feel more comfortable talking about finances when dating.
Opening Up About Personal Finances
Discussing finances with your significant other is a big step in your relationship. This could be a topic of conversation you’ve been putting off for a while, however, overcoming the feeling of discomfort will help build intimacy and trust in your relationship. When you and your partner are ready to begin this next step there should be an open conversation, in a judgment-free zone where you feel comfortable discussing your finances.
First, you’ll want to talk about your income. There might be a significant difference between both parties, and you’ll want to make sure you’re not putting additional strain on each other’s finances. If you plan on splitting expenses, take into consideration the difference in your incomes and divide the responsibility accordingly.
Do you or your partner have debt? This includes student loans, credit cards, car payments, etc. Any debt should be put on the table to help get an idea of where you stand financially. Debt can have a huge impact on your future and it’s best to pay it off as early as possible. Make sure you’re both on the same page when it comes to reaching your goals and are open to adjusting your financial habits if necessary.
Create a Plan For Your Future
Discuss where you see yourself in the next five years. Be sure to include your personal goals as well as your goals as a couple. Sit down and make a list of your financial goals and how to attain them. If your goal is to buy a house, figure out how much mortgage you can afford to better understand your position. If your goal is to retire early, it’s best to start saving or investing as early as possible in order to help set yourself up for financial success later in life. Figuring out the requirements for each of your goals will allow you to create an action plan in order to achieve them.
Creating a budget will help you better understand your finances. Having a budget will clearly show you where your money is going and where you have room to save. While saving for the future is always a great way to get ahead, don’t forget to plan for the unexpected. An emergency fund is a great way to help lessen the stress during unforeseen events, typically you’d like to have at least three to six months of living expenses saved up in the event of an emergency.
Creating Monthly Money Dates
Now that you’ve had open conversations where you were able to pinpoint areas that you would like to work on both as individuals and as a couple, you can lean on each other to reach those goals. Set a specific time each month to sit down with your partner and take a look into your finances. Use your money date to track your progress. Look for areas of improvement and hold each other accountable. You might begin to notice you are getting closer to reaching your goals.
A large goal many couples have is taking the plunge into homeownership. Once you have enough money saved towards a downpayment you can begin the next step of buying a house and get preapproved for a home loan. By doing so, you’ll have a better understanding of what you can afford moving forward and will be one step closer to achieving your goal. After you’ve had multiple money dates, the conversation should get easier; you’ll start to feel more comfortable discussing your finances.
Managing Your Bank Account
Is your relationship ready for yet another big step? As your comfort levels increase, another topic to touch on is your bank account. You’ve now taken on the responsibility of splitting expenses, but are you ready to combineyour finances? There are various options when it comes to combining finances. Opening a joint account before marriage could complicate your finances in the event of a breakup. Some people might err on the side of caution and keep finances separate until there is a solid commitment within your relationship. Others might find it easier to pay bills from a joint account rather than keeping track of who owes what and when. The middle ground would be to keep your individual accounts and open a joint account. Your personal account will see your paychecks, savings and personal spending. Your joint account will be used to pay all communal bills such as living expenses, groceries and utilities.
Taking on your finances as a team by setting money dates will help motivate you to reach your goals and hold each other accountable. Having open conversations around your finances and setting goals for the future will lead to the ultimate partnership in creating a future full of love and success.