Having the money talk with your significant other
Valentine’s Day is right around the corner. Many are preparing for a big night out, but there is something else you should be preparing for: the money talk. While the money talk may seem intimidating, it is necessary to take the financial stress off your mind and your relationship. Roughly 31% of couples argue about finances at least once a month, whether it’s about big purchases, spending habits or investment decisions, according to a 2017 study from Ameriprise Financial. Here are a few simple, yet important, steps to prepare you to sit down and have the money talk:
Topics to cover:
- Income
- Debt and assets
- Saving goals (including debt goals)
- Financial obligations to family members
- Credit scores and histories
Review your financial history:
Look at each other’s credit score. Even though you will each have your own score, if one of you has a bad credit score it can effect getting joint loans and more. It is good to know where both of your scores stand for future financial decisions.
Spending habits:
Learning how both of you treat money can provide you a deeper understanding of one another and hopefully head off arguments and issues before they occur. People are raised differently on how to view money and how to handle it. If you like to impulsively shop that would be something to know and talk about.
Set financial goals:
If either of you have debt, set a goal to pay it off. What kind of lifestyle do you want? Do you want to take a vacation within the year? Do you want to start setting money aside for retirement? Now is the time to talk about what each of you want for the future and when you want to achieve them.
Setting up a budget:
After establishing your goals, you should make a budget to achieve those goals. Determine the household needs such as utility payments, groceries, debt payments, etc. You should also discuss your individual needs and what is important to you. These can include clothing, coffee visits, gym memberships, and many other items.
The most important outcome of this conversation is to set up a plan to manage your money. You should set up a few short and long-term savings goals. Once a goal is set, you both will be able to commit and work on it. It may not be easy for everyone. If you need help on learning how to budget, using credit wisely, and dealing with debt, Credit Advisors Foundation is here to help every step of the way!
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