Knowledge Center

How To Discuss Finances as a Couple

educating-myself | Read Time: 3 minutes

By Vernita Dorsey | Published: June 2021

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The excitement that comes with the decision to purchase a home together, getting engaged or married can bring with it some added stress, particularly when it comes to discussing shared finances.

According to a recent WSFS Bank study, 50% of Millennial and Gen Zers said discussing money with family makes them very uncomfortable.

While discussing finances with your partner can be stressful, there are ways to help eliminate some of the pressure and ensure those conversations are productive.

Find the Right Time
When you’re ready to take the next step in your relationship, one of the first items you should check off your to-do list is setting time to discuss finances.

Choose a time when you and your partner can rid yourself of distractions and additional stressors. While you may not want to spend your weekend talking money, it can be an ideal time to have these important conversations to ensure you’re not tired from work.

Assess Your Personal Finances First
After you’ve decided on a time to have your discussion, do some homework to ensure you’re prepared. Taking stock of your own financial situation on a regular basis is a good idea and is certainly something you’ll want to do before talking joint finances.

Ensure you have a grasp on your savings, investments, monthly budgets and spending, as well as any debt you’re bringing to the table.

You’ll also want to know your credit score, as this can impact your financial goals, and you may need to work to improve. Closing or opening too many credit cards can negatively impact your score, so decide if you want to open a joint credit card or just make your partner an authorized user.

Having a clear picture of your own finances can allow your discussion with your partner to be productive and set a course of action for your journey together.

Set Actionable Goals
Once you have a clear understanding of your finances as a couple, it’s important to lay out your goals together and chart a course of action toward achieving them. Whether you want to save for renovations to a newly purchased home, an annual vacation or just build your rainy-day fund, setting quantifiable goals is important.

It's also never too early to start thinking about retirement. If you have existing 401(k)s, ensure you continue to contribute to them and consider starting an IRA to further invest in your future.

After you’ve identified your goals, you can begin short-term and long-term budgeting to help you reach the finish line. Remember to also revisit your budgeting regularly to account for variations and ensure there are no deficits.

Divide Up Responsibilities
There are a number of bills that come with the excitement of buying a home, planning a wedding or other major life events. Make sure you discuss who will be responsible for paying each bill on time so nothing slips through the cracks.

While you’re deciding who will handle each bill, you’ll also want to discuss whether having a joint bank account – like a checking and savings or money market account – is right for you. Opening a joint account can make things easier when it comes to paying bills from the same bucket of money, but not all couples choose this route.

There is not a one-size-fits-all decision when it comes to whether or not to use joint or separate accounts. The important thing is to have a clear understanding of which accounts you will utilize as a couple and which bills will be paid from each.

If you think you need additional help when it comes to creating a financial plan that is right for you as a couple, there are a variety of free resources available online like WSFS iQ. You may also want to talk to a financial advisor who can help devise a strategy toward achieving your long-term financial goals together.

Taking the next step with your partner is an exciting time in your life. It’s important to be honest and transparent when crafting your plan of action so as not to derail the process. By working together on a solid plan, you can set yourselves on a path toward a long and happy life together.




About the Author – Vernita Dorsey
Vernita Dorsey is Senior Vice President, Director of Community Strategy at WSFS Bank. She has more than 35 years of experience as a community banker and has actively served her community throughout her career.

 

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