How to have the ‘money talk’ in a relationship

Financial issues can make or break a relationship, yet most Australians do not have the ‘money talk’ when committing to someone new. Learn why you should, and how to go about it.

Embarking on a new relationship might be exhilarating. But when it becomes serious it also means making some important decisions, regardless of whether it is your first significant relationship or your second, third or fourth. These can include topics such as where you will live together and whether you want to have children.

Considering four out of five Australians agree that financial troubles push couples apart, and a similar amount say money creates tension in their relationship, discussing finances early on make sense too. Yet, according to a 2019 Relationships Australia survey only one in three of us disclose our financial situation or discuss how we will share our incomes before we commit to someone.

The question is, why? And more importantly, why does it matter so much anyway?

Money matters

On Your Own Two Feet financial planning service founder, Helen Baker says having the money talk at the start of a relationship is vital for a few different reasons.

How similar you and your partner’s values around money are or aren’t can determine how much friction finances might cause in your relationship moving forward, the financial advisor and author says.

A gap isn’t necessarily a deal breaker, but acknowledging it and working out how to bridge, it will stand you in better stead than being blind to the facts.

Then there’s the issue of STD’s. Sexually Transmitted Debt. Once you’re in a committed relationship your financial situations not only affect each other, they can impact goals like whether you’ll be able to buy a house together, your retirement plans and where your income needs to be spent, Helen says.

So, knowing whether your new partner is bringing debt into the relationship, or if they have children from another relationship, what the short and long-term financial commitments and arrangements are, is vital.

Why are we so funny about money

Helen says there are a few factors that contribute to why people might avoid discussing finances with a new ‘significant other’.

It could be that we feel embarrassed that financially we’re not where we want to be, or feel we should be, so we’re reluctant to lay our cards on the table, she says.

Culturally, money is still a fairly taboo topic, too. For example, it’s very rare that people openly discuss how much money they make or spend. Add into the mix that it’s still common to be raised believing that it’s inappropriate to talk about money, and there are a lot of different complex layers at work.

How to have ‘the talk’

Before you get into the nitty gritty, it’s a good idea to broach the subject by making it light-hearted.

A simple way is to turn it into a, “Would you rather?” game, Helen says. Asking things like “Would you rather have a big house with a big mortgage and less travel or a smaller mortgage and more travel?” or “Would you rather donate any extra money you had to charity or use it to buy a new car?” is a fun, yet still very enlightening way to start talking about money.

You’ll get a good idea about where each other’s priorities and values lie, whether you’re on the same page, and if not, what you might have to do consider or plan for to account for that.

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If you ask one thing

While the list of questions you could ask each other for a clearer picture of ‘all things money’ is a long one, Helen Baker says these are a great place to start.

#1 Are you naturally, a spender or a saver?

Some of the most common arguments about money in a relationship occur when each person treats money differently. Helen says. There’s no right or wrong, but knowing where you stand as early as possible, and how you can accommodate both attitudes towards money if you need to, is powerful.

#2 When you’re saving how do you do it?

It’s important that when you do decide to save for something together, you’re confident that you’re genuinely working towards the same thing, Helen says. And knowing how someone saves will help you understand their thought process around working towards a financial goal.

#3 How do you feel about debt?

What kind of debt is okay, and which is less attractive? Knowing how much debt you’re both comfortable carrying, and for what, is a good way of seeing how in tune you are risk wise.

#4 What is your credit rating like?

It might seem like a confronting question, but it can seriously impact, any future financial decisions choices and options you have as a couple, so you need to know, Helen says.

#5 Have you ever had financial advice?

The answer to this question will help you understand how much experience each other has had with things like investing and planning, and where your differences or similarities lie.

This article was originally published in The House of Wellness magazine (PDF)