Money is one of the top causes of arguments between loving couples – usually because one partner has different ideas about financial priorities than the other. Or, some might try to hide debt from their other half, which can lead to big difficulties in the longer term.
At MoneyMagpie, we realise money talks can be hard to have – but these are the important conversations you must have before you live together or consider getting married.
Why It’s Important to Talk Money Early On
There is nothing worse than thinking you’re both entirely on the same page and catching feelings, only to find out you’re financially incompatible later on down the line. You’ve invested a lot of time and emotion into the relationship, so it can be hard to walk away. But if you’re in a financially incompatible relationship, there will always be resentment.
Talking about money early on in a relationship helps to get the big questions out of the way so you know that you both have the same financial goals and spending habits. Ask these questions before you take any major financial steps with your significant other.
“Rent or Buy?”
Despite the media rhetoric, not everyone wants to buy a house. There are lots of different reasons for this: some people aren’t ready to commit to a house, while others want to be able to travel without leaving a property empty. Further, some don’t want to take on a mortgage as a lifelong debt.
Knowing whether your joint goal is to save for a deposit is an important one. In fact, it’s probably the biggest expenditure of your life! It’s easy to try to move in together quickly to save money, too. But how we each prefer to live can impact on where we live, the type of building and location, and who we want to live with.
“How Much Do You Save Each Month?”
You don’t need to ask for a figure, but knowing what percentage of the monthly paycheque your partner puts aside will tell you if you’re financially compatible. Some people prefer to squirrel away as much as possible, while others prefer to live for the moment. The two are, usually, incompatible.
“Do You Like to Travel?”
Whether you’re an avid traveller or a homebody, this is a question to ask to find out if you’re financially compatible and your personalities match, too. There is nothing wrong with having wanderlust or liking to spend your free time mostly at home – but one involves a larger expenditure than the other.
If you like to travel, it’s important to know what kind of travel you both enjoy, too. Are you into several city breaks each year? Do you want to do a shoestring year around the world in hostels and cheap flights? Perhaps you only take one long holiday every few years – but it’s a luxury one you’ve saved up for. Knowing what the other person likes will set you in good stead for knowing what your travel and holiday budget should look like as a couple.
“Are You in Debt?”
This is a horribly awkward question to ask, but it is necessary if you’re seriously considering settling down with someone – especially if you think you’re going to open joint bank accounts together. Knowing whether someone is in debt doesn’t bring judgement on them, but it does mean you can plan accordingly when it comes to finances.
If one of you is in a lot of debt and the other is debt-free, this will have an impact on what you can do together as a couple, too. If you’re looking to rent together, for example, it will impact how much each pays towards the rent. And if you want to get a mortgage together, any large debts or defaults will certainly scupper your plans.
Talking about debt can also take a huge burden off your partner’s shoulders if they’ve been avoiding bringing it up. Having your support could help them approach debt management charities like StepChange to start taking steps to getting out of debt.
“Do You Want Children?”
This question is important for obvious reasons – and some less obvious ones. When it comes to finances, children are expensive! So having a plan to start setting money aside together to raise children is important.
However, the less obvious question within this is: “how will we manage working if we have children?”. Is one partner expecting to stay home to look after the baby? Will the other partner share their finances if this is the case? It’s surprising how many people are unprepared for this situation until it happens to them, and your expectations of family financing could cause a rift. Better to have an idea ahead of time so you can all plan accordingly.
“Do You Like Your Job?”
Partnering up with someone who loves their job is a double-edged sword. They’re a lot less likely to try and leave their job on a whim – but you might find they’re married to their work and put it ahead of you.
Conversely, if someone doesn’t like their line of work, they might be considering taking time out to retrain in a new career. This can have a financial impact on you as a couple, as education is expensive, and it’ll put additional financial strain on the working partner.
However, if it means they are training into a line of work they enjoy, then the long-term prospects of a happy partner with a satisfying job often outweigh the short-term stress of supporting them through training.
“What Was Your Financial Upbringing Like?”
People who come from affluent backgrounds will often have a different perspective on finances to those who haven’t. This could be from deciding whether to send your children to private school to investing in stocks and shares instead of putting money in an easy access cash account.
Your financial upbringing doesn’t define you, but it can impact how you perceive money. People who have been broke are often more cautious about spending even when they have spare cash, for example. More than this, a family’s financial background can impact the future, too.
Is one of you set for a large inheritance? How would they view it – ‘mine’ or ‘ours’? Or perhaps you worry about elderly parents – would you offer live-in care or put a relative in a care home? How you were brought up around money will impact how you approach large life decisions like this, so it’s important to make sure you understand where your partner is coming from when it comes to understanding finances.
“Joint Accounts or Separate?”
Finally, if you’re thinking of moving in with or marrying your partner, this is a very important question to ask. Many people will pool their money into a joint account, with salaries going directly into it with both able to spend it.
This doesn’t offer much protection from bad breakups, however. And while nobody wants to anticipate a breakup, having only a joint account could make things even harder. Another reason to not join accounts is if one of you has debt or is an irresponsible spender, because this could cause arguments or financially link the other to their debt.
One of the most efficient ways of pooling money to make sure bills are paid is to have a joint account which you each pay a proportion of your salary into each month. The rest you get to keep for your own savings and ‘fun money’ to spend on what you like. This will help avoid arguments about what you spend money on, while ensuring all the important bills are covered between you.
“Are You a MoneyMagpie?”
Alright, we’ve snuck this one in – but it’s shorthand for a larger question. Ask your potential life partner whether they have an interest in saving money where they can, making good investments, and understanding how to manage their cash.
Some people are a lot more relaxed about their approach to finances – but this is often incompatible with someone who wants to hustle a side business, invest in stocks, or be part of the Financial Independence, Retire Early (FIRE) movement. Your overall attitudes to money management will have a big impact on the financial decisions you make together as you go through life.
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