Morgan Stanley
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7 Tips for Talking Money With the Person You Love

Your relationship is about living a happy life together, not dollars and cents. Turns out, a little financial planning may help you get there.

Love and marriage: They go together like a . . . money talk and financial plan?

There’s little more exciting than choosing to align your life with the person you love. Of course, there are conversations you’ll want to have with your partner before tying the knot. To avoid disagreements and finance-related pitfalls down the road, one of the most important ones is about money – how you’ll make it, how you’ll save it, how you’ll spend it and how you’ll invest it.

Here are my top tips for talking money with the person you love:

1. Align your financial goals

If your spouse’s primary goal is getting ready for a huge vacation and yours is to increase your contributions to your 401(k), that’ll create angst. Make sure to talk about your priorities and what sacrifices will need to be made, if any, to progress toward those goals.

Consider a woman who philosophically disagrees with her husband about whether they should pay for their two kids’ college education. He wants to, even if they don’t end up covering 100% of the costs, but she has the exact opposite perspective. She thinks college students  take school  more seriously when they have skin in the game. There’s no right or wrong answer. The key is to work out a compromise. You might even loop the kids into the conversation. 

2. Suss out your ‘money styles’

Research has shown that money is a top reason that couples argue.1 To pave the way toward a harmonious future, have a calm conversation about your money styles. Is one of you more of a spender and the other more of a saver? Does one of you view money hyper-rationally while the other feels a great deal of emotion around financial decisions? Find a time to have an unrushed conversation. Where are your styles similar? Where are they different? How can you work together as a team?

The key is to understand the “why.” If someone’s a chronic saver, why does he have that mindset? Could it be because his parents were laid off when he was little and he has some insecurities around that? Someone else might spend more than she should because she’s never had a concern about money based on her upbringing. You’re not going to move the needle until you understand the underlying psychology.

3. Figure out how you’ll manage your money

Do you plan to merge your accounts? Do you want to keep some things separate? Generally speaking, your options include remaining fully separate, merging absolutely everything, and a hybrid—like depositing a certain amount every month into a shared account based on your income.

Whether you comingle your accounts or each party takes responsibility for different bills, you need to communicate regularly to make sure you’re on the same page. Maybe that means sitting down once a year to chart your shared priorities, or checking in quarterly on your progress. Maybe you’d rather discuss money every month or even every week. The frequency is less important than both parties feeling free to raise the topic at any time.

4. Discuss your health care plans

It’s not fun to talk about worst-case scenarios, but your future spouse should know your wishes should you become ill or unable to make your own medical decisions. To avoid hospital-room squabbles about who has the right to make health care decisions for you, you may wish to fill out a health care directive or health care proxy that states who’s empowered to make medical decisions on your behalf.

You should also make sure you have the right level of insurance and have set up health care proxies in case one of you falls ill or a tragic event happens. This is especially important if you have kids.  You never know what the next day will hold. Hopefully you never have to execute on any of this planning, but it’s important to have it in place. 

5. Update your beneficiaries

Designating beneficiaries for your financial accounts (sometimes referred to as TOD or POD—transferrable or payable on death) is an easy way to state your financial wishes should something happen to you. Especially if you have children from a prior marriage or other family members who could make claims on your finances, this is a valuable way to help your loved ones avoid probate court and protracted legal issues. You don’t have to name your spouse as your beneficiary, but updating and clarifying your wishes can go a long way toward helping those you love avoid stressful and emotional disagreements down the line.

6. Spill the beans on your existing debts

Whether or not you fully combine your finances, it’s important to be on the same page as you work together toward shared goals. Set aside a time to discuss any preexisting debts either of you have, like student loans, mortgages, auto loans, credit card debt or any other financial obligations. Although if you did end up divorcing, you shouldn’t be responsible for your spouse’s debts from before the marriage, it’s important to talk about the impact these financial burdens may have on your budgeting or long-term plans. Will you work together to pay off your personal debts? Do you feel like you “own” your debt and don’t want your spouse to help you pay it off?

Also consider sharing your credit scores or credit reports, as your financial history could have bearing on your ability to qualify for a mortgage at a competitive rate.

7. Sign a prenuptial agreement (maybe)

Not every couple needs a prenuptial agreement, but prenups can be a key way for individuals to plan for the “what ifs.” Although it might feel fatalistic—planning for the possible end of your relationship when you’re still at the beginning—just think about how much more level-headed and loving you’ll be if you negotiate a peaceable agreement with the person you love while you’re in love. This process can prevent a lot of stress and squabbling later. Prenups may be especially relevant for those who enter a marriage with significant assets such as real estate and investment accounts, or children from a prior union.

I’ve seen relationships dissolve when a prenup sends a certain message that creates rifts. Prenups can be a very important financial tool, but if you’re considering one, I recommend strong communication (once again). Be able to articulate why this matters to you, and be very empathetic to the other party. Listening to each other’s perspectives can help ensure you’re not hurting the relationship before you even tie the knot.

Ultimately, the love you share with your partner isn’t about dollars and cents. Your main goal should be a fulfilling and happy life together. As it turns out, a little financial planning before you set off on the road together may just help you get there.

Ready to invest in what matters most to you?

MORGAN STANLEY ACCESS INVESTING