In a New Relationship? Here’s How to Approach Your Finances as a Couple

In a new relationship? The best time to get on the same page financially is now.

Understanding each other’s financial values early on can help build a strong foundation for the future. Money stress in relationships is a real issue — 73% of married or cohabitating Americans say they experience relationship tension due to money decisions, according to the American Institute of CPAs. The Institute for Divorce Financial Analysts reports that “money issues” are the third leading cause of divorce.

So how can you address your finances now to ensure money doesn’t cause challenges to your relationship?

1. Practice open communication. Be transparent about your money. Discuss your personal financial goals, share your income and expenses, and perhaps create a budget together for date nights or travel.
   
   Regularly revisit your financial conversations to make sure you are on the same page. Expenses and income will change over time. For example, moving to a new, more expensive city would be the time to revisit how to split expenses or how to manage your combined budget.
   
   Schedule these financial check-ins regularly to reassess goals, address concerns and adjust plans as needed. Review your budget and your personal balance sheet monthly, together, so you understand your combined financial situation. When the inevitable disagreements come, work together to find solutions.
   
   Being honest about where you are financially — both as individuals and as a couple — is key to a financially successful relationship.
2. Know your own personal money story. Each of us has a money story, formed by how we were raised, experiences we have had or financial lessons we’ve learned. Knowing your own personal money story helps you identify your emotions around money as well as any bad financial habits you may have. It also clears the way to set money goals and make better financial choices. Sharing your money story can help your partner understand where you are coming from financially and facilitate productive discussions about money.
3. Combined or separate finances? Couples must eventually decide whether to merge finances and accounts, separate them or find a middle ground that works for both partners. Something to consider is that a recent study by the Journal of Consumer Research found that couples with joint bank accounts tend to be more satisfied with marriage compared to couples who keep their finances separate. This can likely be attributed to transparency around money and trust between partners.
   
   As your relationship evolves, couples have various options for managing finances. Some find it helpful to divide shared expenses. For example, one person might pay for dinners out, and the other might cover groceries. If there is pay disparity between the partners, one might take on more of the rent while the other covers utilities. The key is ensuring that both partners feel like they are paying their share of expenses and that the couple agrees on the plan.
4. Talk about debt. Address the elephant in the room early. If either partner has debt, be transparent and open about it and create a strategy together. Make clear the amount of debt, the type of debt and the reasons behind the debt. Approach the situation with empathy and support while prioritizing a repayment plan. Maintaining transparency by sharing financial information, even information that might bring negative emotions, can build trust between the partners in the relationship.
5. Address retirement and the future. For new couples in midlife, consider discussing your retirement plans, your vision for the future and how your financial strategies align with long-term goals. Identify your shared goals, such as lifestyle, travel and even work and income. At this stage of life, both partners have had years of financial experience, so it’s important to make sure you have similar expectations regarding when and how you plan to retire.

Maintaining open communication around money is crucial for building and sustaining healthy relationships. A CFP® professional can help individuals in new relationships assess their financial situation, plan funding for joint financial goals and facilitate conversations around expenses. Find your CFP® professional today.