Category: Personal Finance

Miranda Marquit

Money represents one of the essential conversations you need to have with a potential life partner.

However, not everyone is comfortable talking about money. Your S.O. might not be, either.

No matter how much s/he might try to avoid the subject, though, it’s important to get on top of the situation. You need to talk money with someone who’s going to be such a huge part of your life.

Why you need to talk money

Money is a huge part of life. We don’t like to think about it in those terms, but the reality is that it’s a necessity. You and your partner need to be on the same page when it comes to money.

Your money situation impacts all areas of your life. Money is a cause of stress and, the American Psychological Association notes, can also affect your relationships.

You need to make financial decisions with your partner, and that means you need to talk money. It might seem just fine that one of you takes care of most of the money issues without conversations, but it’s really not.

I know.

In my marriage, my ex didn’t want anything to do with the budget or finances — even when I asked him to participate.

This was stressful, we didn’t really have the same priorities, and it didn’t help that he didn’t know our situation and I felt like I was always trying to make things work.

If you want to be successful with your finances and in your partnership, you need to talk money, at least a couple times a month. Even if you keep your finances separate, touching base is a good idea. You need to be aware of problems that can cause you problems down the road.

Why doesn’t your partner want to talk money?

Your first step is to figure out why your partner isn’t interested in talking about money with you.

This can be a touchy situation because money is so related to our emotions and our view of ourselves. It’s important to approach it with tact and realize that your partner might be reluctant due to:

• Embarrassment: Something in your partner’s money situation might cause some embarrassment. They might not want to disclose past mistakes and/or current debt.
• Trust issues: Depending on where you’re at in your relationship, your partner might not be ready to talk about money with you. You don’t need to exchange bank account information or anything like that. But you should start, generally, with what matters to each of you.
• Your attitude: One of the things I learned about myself during a relationship is that sometimes I come across as a perfectionist with high standards. Also, I used to be really judgy. I had to learn to be more accepting before my partners could disclose things to me.

Figure out why your S.O. is reluctant and try to go from there.

How to start talking about money with your S.O.

No matter the situation, it can be difficult to figure out how to start the conversation. After all, you might not agree about money, and resolving those differences can be daunting.

In some cases, you can glean information about your partner’s money habits by paying attention to the way they use money.

You can use such things as a touchpoint. If they spend a lot on something, you can probe a little. “Hey, do you like X? I notice that you have a lot.”

At some point, though, you might need to just suck it up and ask. Let your partner know that you think things are moving along enough that you are ready to talk money.

Plan a time where you can sit down and talk about finances. It should be a time when you have both had a little time to relax, and when you aren’t hungry. These talks go so much better when you aren’t distracted and when you don’t start off grumpy.

If you are already together, and your partner doesn’t like to talk money, try and frame at something that is good for you both. Start out by saying how important it is that you are a team, and that you want his/her input.

When you can approach it in a way that shows your partner that you value his/her opinion, s/he is more likely to respond positively.

Try to make it a regular occurrence, where you set up a time each week or each month to review something. Base the frequency of a budget review on what your partner is willing to do at first. As you make it a habit, your partner is likely to take a greater interest.

What happens when nothing works?

In some cases, there is just no convincing a partner to talk money with you. If this is the case, you just need to do your best. Look for ways to be real about money and even to protect yourself.

If you haven’t combined your finances, consider staying away from the big pot if your partner isn’t willing to talk money.

When you already have combined finances, but you are doing everything with the money management, try to draw your partner into conversations in non-confrontational ways, and consider making contingency plans that protect your finances.

In the end, your best bet is to start talking about money before you seriously commit to a partner. You’ll be better able to figure out how to move forward.

Miranda Marquit

Lately, I’m not sure what’s going on with my money. Ever since getting back from three months of travel, I just haven’t felt like I have the time to sit down and see what’s going on.

This isn’t a healthy state of financial affairs.

I need to get real about my finances again.

Are your finances in shambles?

The first step to getting real with your finances is figuring out if they are in shambles. While my financial situation isn’t dire, I’m not exactly on top of money like I usually am.

You need to be brutally honest about where you are with your finances. In my case, the fact that my bills are largely paid automatically means that I don’t have a huge issue with missing payments.

However, I haven’t been tracking my spending like I usually do. Instead, I’m just sort of moving money around when I think I need to spend more. It’s a different approach than usual, and there are days that I feel like maybe I’m blowing through my monthly income faster than I should be.

If you’re keeping is real with your finances, you need to acknowledge your shortcomings. Have you been missing bill payments? Are you uncomfortable with your debt level? Do you spend without thinking about your purchases?

Look at your money situation and honestly acknowledge where you are. You can’t improve moving forward if you don’t know where you’re starting.

Evaluate your money goals.

Now that the new year approaches, it’s common to talk about setting goals. It’s an annual theme. And that includes goals about money. Once you know where you stand, you probably want to set goals that help you fix your financial problems or help you improve the situation for the future.

As you get real with your finances, it’s important to evaluate whether or not your goals make sense — and are realistic.

If you have a bunch of debt, it might not be practical to expect to pay it off in a few months. Maybe you can’t immediately max out your retirement account. There’s nothing wrong with this. Instead, the important thing is to make progress. Take a look at where you stand, where you want to be, and a realistic timeframe.

I know that I need to reconcile all my accounts for the last three months. I also need to review my own financial priorities and make adjustments since my new job. It’s a huge undertaking. I either need to suck it up and take a whole day to make it happen or I need to carve out smaller chunks of time over the course of a week.

Either way, I need to get real about my finances and about getting back on track.

Are you honest with your partner?

Let’s not forget that you need to keep it real with your finances when it comes to your life partner. In recent years, there are have been stories about financial infidelity, and the serious problems it causes over time.

No, this doesn’t mean that you need to combine your finances. In fact, I probably won’t combine finances with someone else again. However, I still need to be honest about my finances if I get with a potential partner.

I have a friend who keeps her finances separate from her husband’s. They don’t get into each other’s business. But they do generally keep each other updated about potential issues. You need to be honest about anything that could affect your relationship or the joint portions of your finances.

This might mean fessing up about your debt or admitting to your crappy credit score. It’s not the end of the world. But if you decide you want to buy a home together or if your debt could potentially put strain on your household finances, you need to be real about that.

It’s not easy, but it needs to be done.

When to keep your finances to yourself.

Keeping it real with your finances doesn’t mean that you go around telling everyone your money business. If you’re cool with that, there’s no shame in that game. However, don’t feel like you need to be completely transparent all the time.

I’m not someone who shares income reports. I don’t give exact numbers related to my student loan debt; I just say that I have it and don’t plan on paying it off early.

Even when you’re in a relationship you don’t need to share everything about your finances. I already know that I’m not telling someone about everything in my money life. I stay on top of my bills. I can afford what I spend my money on. I don’t have major issues that will sabotage any joint financial effort.

And that’s all anyone needs to know.

My parents don’t need to know exactly what I make. My friends don’t need to know my exact credit score. It just isn’t necessary.

There’s no reason to brag about your money, but you also don’t need to be ashamed to talk about some of your deals or address important issues.

As long as you own your financial situation to yourself and move forward to do what’s right with your money, you should be fine.

Zina Kumok

We’re all just trying to figure it out after college.

Even though some friends seem calm and in control, they’re probably just hiding their uncertainty. It’s easy to get into a feedback loop with this mindset. Everyone compares themselves to idealized versions of their acquaintances.

This can be especially harmful when it comes to managing your money. If you spend enough time around people who overspend to gain status, that level of extravagance starts to feel normal. Before you know it, you’re shopping for jewelry and meeting up for expensive brunches every weekend on a barista’s salary.

If you feel like your spending is out of control around friends, it’s time to break the cycle.

Here’s why you need to treat money differently than your friends — and how to make it happen:

Your friends are bad with money.

If your friends are anything like the general public – and they probably are – they’re bad at managing money. Almost 75% of Americans are in debt, and the average savings rate is only 5% according to an article from Fiscal Times.

Unless you’re part of a select crowd that defies these odds, you can probably benefit from managing your money differently.

What does it actually mean to be good with managing your money? Here are some general guidelines:

• You put 10% to 15% of your income toward retirement. To retire while you’re still active, you need to be regularly saving in an investment vehicle like an IRA or 401(k) (provided by your employer). If you started saving later in life, you may need to increase your percentage to catch up.
• You actively pay down debt or are debt-free. When you have debt, you pay interest straight into someone else’s pocket. That interest is money you’re throwing away each time you make a payment. Debt robs your ability to save for long-term goals and enjoy the income you have now. Being debt free is a key part of long-term financial success.
• You have an emergency fund with three months’ to a year’s worth of expenses. One way to avoid getting into debt is having an emergency fund to cover any surprise expenses that come up. An emergency fund can keep you solvent if you lose your job, need a hospital visit, or have to fly home for a funeral.

Peer pressure is real.

The American Institute of CPAs and the Ad Council ran a survey and found that more than 75% of millennials “use their friends’ financial habits to determine their own.”

This is great if your friends live in a basement apartment to save money. It’s not so good if they go out to eat every day.

I know I’m tempted by the people I hang out with. If we’re at a restaurant, I’ll get dessert if someone else does. Even though I’m conscious of my money, seeing someone else spend freely gives me the subconscious permission to do the same.

It’s the same when I go shopping with someone else. Will friends ever tell you not to buy something you love? Who wants to do that?

It’s tough to avoid the influence of your friends, so you need to remind yourself why you’ve decided to spend money a certain way. For example, when I graduated college I made the commitment to pay off my student loans in three years.

Having that clear goal in mind made it easier to say no. No to eating out, no to shopping, and no to the bars and clubs. It was still hard, and confusing, to the people around me, but it kept me mostly on track.

If you have a specific financial goal, use that as motivation to say no. Maybe you’re saving for a trip to Paris or a new car. When your friends ask if anyone wants to get an appetizer, just say, “Nah, I’m trying to go to Europe next spring.”

Set the standards.

It’s hard to avoid spending money if all your friends want to do is go out to brunch or buy concert tickets. Instead of saying no or feeling guilty for agreeing, be the person to come up with frugal ideas. Suggest a potluck or wine and cheese night instead of a pricey evening out.

This is a strategy I used when I was aggressively paying off my loans. I wanted to hang out with my friends, but I was cautious of going out to eat or going to the movies. Instead, I’d invite them over for Netflix or movie nights.

Sometimes my friend Jess and I would go to Costco together or run other errands. Sure, it wasn’t as entertaining as a boozy brunch, but it’s part of the reason I’m debt free today.

Plus, spending time together casually can be just as valuable a bonding experience as something that costs money.