6 Money Questions Every Couple Needs to Ask Now
Money conversations aren’t the most romantic, but they are vital to long-term relationship success.
“Money problems are very pervasive and it is a tension-filled topic for couples,” says Terri Oerbuch, relationship expert and author of 5 Simple Steps to Take Your Marriage from Good to Great.
A recent survey from Fidelity Investments shows couples admit to arguing “frequently” or “occasionally” over money. What’s more, of those bickering couples, 38% say they don’t resolve the issues in a mutually-agreeable manner.
Oerbuch says talking about money is still considered taboo because parents don’t discuss financial planning, salaries and budgeting with their kids, so we grow up without the models and vocabulary to approach the topic.
In fact, she says people are more likely to talk about sex then money. “When couples, girlfriends or a group of guys get together, they are more likely to approach the topic of sex than they are about money. That is the reason couples have the notion that money causes problems.”
To help spur a financial conversation, experts suggest asking the following questions:
Question No.1: What Does Money Mean to You? Oerbuch suggests individuals ask themselves this question first to identify their relationship with money. “What did it represent when growing up? Was it a status thing? Comfort? Security?” She says how our parents budgeted and talked about money impacts how we handle our finances as an adult.
Once each person determines their money priorities, it’s easier to create a financial plan that takes into account both perspectives. “Knowing the other person’s general philosophies and whether they are a spendthrift or more frugal is important; you don’t necessarily have to match, but you need to know where the other is coming from,” says Mark VandeVelde, certified financial planner and wealth partner at Hefty Wealth Partners.
Question No.2: When Should We Discuss Money? Talking about money in a neutral setting makes the conversation more productive and less likely to lead to a fight.
“Most of the time, couples only address money issues when a credit card bill is overdue, someone lost their job or blew the budget, which is just asking for a fight,” says Oerbuch.
She recommends couples discuss their finances every three months in a neutral setting.
Question No.3: How Will We Make Financial Decisions? It’s common for one person to take the lead in managing the finances, but that doesn’t mean the other person should remain completely out of the loop.
“It should never be 100% one-sided with who is charge,” says VandeVelde. “Not only can that lead to resentment, it can also lead to major problems if something were to happen to the spouse controlling the money.”
According to Fidelity, more than one-third of Americans do not know where important financial and legal documents are stored.
Oerbuch says some couples set “spending thresholds” that determine when the other person needs to give approval before making a purchase. “You need to have the notion of when the other person should be consulted when making a purchase.”
Having a threshold can help reduce blown budgets and hurt feelings. “Whether it’s your daily Starbucks habit or a brand-new TV set, you need to know if you have to call the other person to make sure it’s a joint decision.”
Question No.4: What are Your Long-Term Goals?
VandeVelde stresses that a couple doesn’t have to have the same goals, but everyone needs to be aware of their partner’s wishes to form a financial plan.
According to the Fidelity survey, 4 in 10 working couples disagree on the lifestyle they expect in retirement, which can make creating a savings plan difficult.
“As long as you understand the goals and are OK with not being on the same page you can create the right plan, whether it’s keeping money separate, creating two accounts or keeping all the money together, the key is to understand everyone’s end goal.”
Lauren Brouhard, senior vice president, marketing strategy and business management at Fidelity, says 50% of couples don’t have the same top financial concern. “If the topic becomes too heated, bring in a third party to help take the emotion out.”
VandeVelde advises new couples ask about the other’s desire to have kids or own a home. “If they aren’t on the same page it’s hard to create a long-term savings plan that is going to work.”
Question No. 6: How Much Debt Do You Have? In the era of record student loan debt levels and mounting outstanding credit card bills, VandeVelde says it’s important to have a grasp on the other person’s debt situation.
“Ask about any debt and their repayment plan. Knowing this early in a relationship can avoid any surprises later.”
Question No.6: Is this Argument Really About Money? Sometimes financial conflicts really have nothing to do with money, Oerbuch says.
“Money is tangible and easy to transfer to others issues. Sometimes what you are arguing about really has nothing to do with money and it’s important to take a step back and realize that there is a deeper issue here.”