Since I’ve started working as a financial planner, I’ve learned so much from my clients about what good planning actually is. One area that has become important is financial planning for couples. The most important thing I’ve learned is that there is no right or wrong way to do it!
Logistics aside, the conversation typically begins with the fundamental question of whether to plan together or separately as a couple. Often, we then talk about whether or not to merge finances (there are pros and cons to both options).
The question of merging finances may be a heavy one. You and your partner may or may not have talked about the big picture stuff, such as having a family, running a business, or dreams for retirement. You may discover that you are completely unaligned in terms of your life goals or that you’re both on the same page. Each of you also brings a unique perspective to the relationship; previous relationships, money histories, and family structures all inform how you each think about financial planning.
I’m not suggesting that you have to feel totally aligned with your partner about money or its use to do good planning, but rather that you both acknowledge and accept how you want to plan together. Even if that means the money stays separate! Try to remove any judgment from the process. I’d suggest starting even more basic and begin with an understanding of how you each deal with money.
Before getting into the logistics of how to plan together as a couple – which we’ll cover in a later post – I wanted to outline some important questions to tackle first.
Have a conversation about money (itself)
Have you ever thought about how your partner thinks about money? While you may have touched on this in passing conversation, taking the time to understand how you each think about money and how that impacts your respective approaches can be a powerful first step.
I always joke with my husband about how he will spend countless hours searching for a coupon code online to save $10. While part of me thinks it’s a complete waste of time (sorry honey), he wiser me knows this behavior is something from his past. Rather than let it be a source of tension, I see it as the quirky, money-related habit that it is.
What are your shared values?
It’s also important to understand how your individual values shape what you do with money. But first, what are your values? Identifying what they may be for you individually and for you as a couple (which could be different) can help shape some of the planning you decide to do.
What are you planning for?
After spending time understanding your individual and shared perspectives on money, it can be helpful to understand what you’re planning for, exactly. One of you may want to buy a house or change careers. The other may simply want to start with a more security financial foundation. You both could foresee wanting to have a certain career trajectory or having a family. Perhaps you realize that other immediate family, like parents, will need financial or other support in their future. Jot down a list of all the important things you might be planning for.
Lastly, move onto the logistics
After you lay this foundation, you can move onto planning for logistics. Here are some questions to get you started:
- Do you prefer having all your finances separated?
- Do you prefer having all your finances combined?
- Are there debts that you want to help each other pay down?
- Will saving happen jointly or separately?
- Will differences in income be factored in?
Once you iron out some of these important details, you can start putting a plan in place.
No matter what your values, money histories, or perspectives on finances are, every couple can come up with a plan that works for them. And if I’ve learned anything, that’s ultimately the point of good financial planning for couples.
Jim is a financial advisor and owner of Thinking Big Financial, Inc. Thinking Big Financial is a fee-only registered investment advisor offering financial planning and investment management services. Specializing in working with the LGBTQ Community.
Please read my legal disclaimer here.