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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.

I know one 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. Her parents paid for her education and she feels that she didn’t take school as seriously because she had no skin in the game. There’s no right or wrong answer; I can see both perspectives. The key is to work out a compromise. Right now the kids are young, but they might even loop the kids into the conversation once they’re a bit older.

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.

When I was a financial advisor, one client worked for the same company for over 20 years in middle management. He and his wife had two daughters, and their family struggled financially. But he was frugal and loyal to the company, and the company went public. Overnight he went from being a manager in a warehouse to being worth about $15 million. He would say, “I didn’t have this money yesterday, so maybe I won’t have it tomorrow.” It took two years for me to convince him it was all right to buy a $300,000 RV so he and wife could travel, since they’d always dreamed of driving across the US and seeing national parks. Eventually we were able to put a floor underneath his mindset—so as long as he took the right steps to protect his assets and income stream, he should feel comfortable traveling in that RV or gifting money to his daughters.

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.

I once knew a man who was 36 or 37, and his wife was maybe 34 or 35. They had two young kids. Unfortunately, she developed breast cancer and died. The one ray of light, however, was that even before she fell ill, they had the right level of insurance and had set up health care proxies. That meant that when this tragic event happened, the man had the resources available after her passing to hire a fulltime nanny (he had a very demanding job) and contribute to their kids’ educational expenses. 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 end 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