Wednesday, May 25 2022

Experts recommend having regular financial check-ins with your partner on spending and saving goals (Getty Images/blackCAT)

Talking about money with your partner can be difficult, no matter how often you do it. To make things easier, we spoke with CPAs to learn how couples can make their money conversations more impactful at different stages of their relationship.

COURTING: FIND COMMON GROUND

When approaching the subject of finances for the first time, be careful, recommend experts.

“Like any conversation, when you get to know someone, take it slowly,” says CPA Michael Deepwell, principal of Lamp Financial, Inc., in Vancouver. “You can touch the tip of an iceberg at first, but later you can deepen the discussion.

What you discuss first, adds Stefanie Ricchio, founder of Modern Accountant, will depend on your age and stage in life.

“In your twenties, you have the luxury of time and you don’t necessarily have to go into detail,” she says. “While in your 30s you can’t wait a year or two to have life-changing conversations about whether what you want financially is the same.”

Couples of all ages should unload their baggage, including the habits and perspectives learned through our upbringing and early spending behaviors. According to a 2021 study by Meridian Credit Union Ltd., 55% of Canadians agree that their childhood experiences with money still impact them today.

“These are things that we don’t even know that are so entrenched in our financial expectations,” says Deepwell. “Until we start seeing a different way, we don’t know what’s possible.”

Once these details are disclosed, broader financial and life goals can be shared.

“You have to figure out your game plan as a couple and that’s more than just numbers,” says Deepwell. “It’s a mindset where you think about the possibilities, discuss your priorities, and then make them a reality.”

LONG-TERM COMMITMENT: PREPARING FOR THE EXPECTED AND THE UNEXPECTED

As a relationship becomes more serious, regular check-ins are necessary to keep goals aligned and to make adjustments as you move forward and plan for the different stages of life, especially retirement.

These recordings help you prepare for big events. Planned events such as travel, marriage, property purchase or childbirth are easier to plan for than unforeseen events such as job loss, disability or death, all of which require a response fast, while dealing with shock and despair.

Deepwell recommends exploring “what if” scenarios to best prepare and ensure you are aligned. “It makes you think about what you would do if something happened, so it’s not as shocking and there are grounds for making tough decisions.”

Ricchio adds the need for both parties to be knowledgeable participants in household finances. “Understanding your financial situation together is paramount, especially in times of stress when unexpected routes have to be taken,” she says.

AT ALL STAGES: PLACE THEM ON THE TABLE

The hallmark of any successful financial relationship is transparency.

From the first conversation about money, both parties should be willing to possibly share all aspects of their financial situation, including income, debt, assets, and savings, as well as any aspirations for their financial future.

In the long run, transparency involves all of this and more, including whether you choose to fully integrate finances with shared accounts and credit cards, as well as discussing every financial decision you make, from purchases to loans through investments.

“It comes down to being open and honest, and finding fairness,” says Ricchio. “If both parties believe that the financial responsibilities are shared fairly, it works. If not, this is an opportunity to get together and discuss how to achieve a better balance.

DEPARTURE POINTS

Starting a discussion about finances can feel awkward and uncomfortable, but it doesn’t have to be. Excerpt from the CPA Canada book, Love and money: conversations to have before getting marriedhere are four suggestions for talking about money with your partner:

  1. Make room for meaningful conversation: Choose a time and place where you can both devote your full attention to the discussion, i.e. turn off distractions, such as a cell phone, and choose a time of day when you can fully concentrate.
  2. Act in a way you want your partner to act: If you don’t like being interrupted while you’re talking, your partner probably feels the same way, so try to focus on listening to their idea before intervening.
  3. To ask questions: To make sure you understand your partner’s point of view, ask open-ended and probing questions.
  4. Be prepared to compromise: It’s the foundation of any healthy relationship and it’s especially true when it comes to shared finances.

CONTINUE THE DIALOGUE

Get a copy of CPA Canada Love and money: conversations to have before getting married for more financial information. Plus, check out our webinar on building lifelong financial plans.

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