This article was created in partnership with Frost Bank.
Talking about money can be difficult. But talking about money with your partner is absolutely essential to long-term financial success. Not only do you need to talk about money, but you also need to find common ground financially and build an optimistic outlook for your financial future.
A recent survey conducted by Frost Bank found that more optimism is connected to better financial well-being. Whether you are dealing with debt or you’ve already started building your investment portfolio, if the thought of bringing up finances with your significant other seems daunting, don’t worry! We’ve created a Money Do List to help you both get on the same page.
How to talk to your partner about money
Although society at large considers money talk taboo, it is important to break down these barriers. Just talking about money openly in your own home can have a tremendously positive impact on your financial future.
1. Start the conversation
Instead of waiting for an innocent money talk to boil over into a money fight, simply start the conversation and remember to remain open and optimistic.
Frost’s survey found that 62% of optimists exhibit better financial health than pessimists. If you and your partner can find a way to be optimistic about your finances, the positive impact can be worthwhile.
Additionally, being more optimistic can lead to more conversations about money. In fact, 76% of optimists say they are comfortable talking about money compared to 53% of pessimists. This comfort level creates more interest in learning about money.
2. Be honest
It is critically important to be honest with your partner about your finances as it can only change your relationship for the better.
If you have any financial baggage or setbacks in your past, you should let your partner know as soon as possible. Don’t wait until after you say ‘I do’ to let them know about your student loan debt burden. Make sure that your partner is aware of your financial situation and any ramifications it may have on their life since your debt will affect theirs as well.
If you are tackling life together, you also need to set financial goals together. The future you plan to design for yourselves will require different financial approaches for the unique direction your life will take.
Here are a few things to think about in terms of these goals:
- Settling down. If you envision owning a place to call home at some point in the future, one of your financial goals should be to build your credit and start saving to accomplish this life goal.
- Kids. Although they can add a lot to your life, kids are expensive. It can be especially expensive if one partner wants to take a break from working to raise your children.
- Bucket list vacations. Unfortunately, traveling is not always affordable. If you have must-see destinations on your bucket list, make a plan to see them together without overextending your finances.
- Early retirement. If you have a goal of retiring early, you’ll need to take big financial steps together to save more money.
4. Budget as a couple & be flexible
After you have a handle on your goals, it is time to enact a budget to create attainable goals through careful saving.
Optimists find it important to have a rough plan in place and building a budget is the first step. Create a spending plan with your partner that is easy to maintain and fits your collective priorities.
At the beginning of each year, have a discussion to set goals as a couple. Set clear goals for your savings and spending for the year and consider any upcoming expenses such as a bucket list vacation or large medical bill. Additionally, look beyond the year to determine how much you’d like to save to put towards retirement or a down payment on your future home.
Life happens and it is important to stay flexible with your budget - so if it doesn’t quite work out for one month, don’t take it out on your partner. Instead, learn from the mistakes and move forward.
5. Make time to discuss money on a regular basis
Before you make the leap to get married, make sure to commit to continuing these important conversations on a regular basis. Life will continue to progress, but you will still need to make money decisions together.
For example, you could start by sharing household bills, then merging larger assets. Optimists would approach this conversation by taking small steps toward the goal, as opposed to merging all at once.
No single financial system will work best for every union – you could combine all of your assets completely, keep everything completely separate or just share some accounts while keeping others separate. Although there is no single system that works best for everyone, adjustments can be made over time to suit your needs.
6. Be patient
Even if you are making all of the right choices as a couple, achieving major financial goals will not happen overnight and will require patience. You’ll need to master positive thinking because the right mindset can make a world of difference.
Choosing to be optimistic about your financial situation can lead to better financial health. If you are like most people around the country, then you likely have a desire to be more optimistic in order to reap the rewards.
If you or your partner starts to feel defeated by the long haul, then pull strength from your optimism and continue down the path you’ve built.
The bottom line
Staying optimistic while tackling your Money Do List is essential. With optimism, you might be more receptive to frank conversations about money with your partner. Continue to work together on a regular basis to build a better financial future for your family.
Not sure where you stand on the optimist scale? Consider taking the Opt for Optimism quiz. You might be surprised by your results!