Keep the Harmony Alive: Discussing Money and Investing With Your Partner

Money management and investment strategies might not seem like the most romantic conversation topics, but they’re among the most important when you’re thinking of marriage or a long-term partnership. Disagreements over money are a common source of tension for couples and often cited as a reason for divorce or a parting of ways, making these discussions impossible to avoid as you build a life together and plan and save for your future.

Couples might have different ideas about financial goals, how to manage their savings, the types of products to invest in and the level of risk they’re willing to take. Fortunately, there are things you can do to bridge the gaps and keep the peace.

Here are five tips to help you maintain money harmony in your relationship.

Share. Get your financial partnership off to a good start with a conversation about the current state of affairs. What existing accounts do you have, and what are their balances? Do you know your partner’s credit score or their level of debt? If you apply for credit together, such as a mortgage, your partner's financial circumstances will be taken into account. If you learn that your partner has a high debt balance or low credit score, this doesn't have to be a deal-breaker. Rather, the sooner you know about it, the sooner you can work together on a plan to improve it.

You can access your credit scores in a number of ways, and many financial institutions offer them for free. You might also want to pull and share your credit reports, which will provide detailed accounts of your credit histories. By law, you're entitled to a free credit report from all three major credit agencies annually, which can be accessed at annualcreditreport.com.

Communicate. Like many other issues in relationships, the key to maintaining harmony is to engage in conversation. It's a good idea to touch base regularly about household financial priorities, such as your upcoming expenses or building an emergency fund, and work together to create solutions, like a budget or investing plan. When developing those plans, it's important for each partner to understand the other person's financial goals and tolerance for risk.

Get educated. Knowledge can give couples the power to resolve financial differences. If you work to learn the basics of investing together, you can feel comfortable knowing you’re using the same vocabulary and both understand the risks involved with different investments and strategies.

The more you know about investing, the better situated you are to achieve your financial goals. FINRA offers content, including several Smart Investing Courses, to get you started.

Decide on an approach. Once you have your household financial basics clear and investment goals established, you’ll want to decide how to manage them. Do you want to combine your accounts? Keep them separate? Find some middle ground? 

For some couples, it might make sense to divvy up accounts and responsibilities. You might have one partner handle the monthly budgeting while the other manages investments, for example. Or maybe one partner is responsible for savings for short-term goals, while the other oversees savings for long-term goals like retirement. Figure out what works best for you. However, no matter how you divide responsibilities, you should both be financially knowledgeable and fully aware of the state of the family’s finances.

Update your paperwork. If you and your partner tie the knot, your new married status might impact your tax situation. You’ll have to determine whether you’ll file jointly or separately, which means it might be time to look at your W-4 withholding. Check out the IRS’s Withholding Calculator to see if you need to make any changes.

Now is also a good time to update—or establish—your will or other estate planning documents. If you don’t have a will or any other end-of-life plan when you die, you’ll become what’s known in legal terms as intestate, and a court will go through an often lengthy legal process to determine your rightful heirs.

While you’re at it, be sure to update your beneficiaries on retirement and insurance accounts. Unlike your personal and real property or your taxable investment accounts, these assets aren't transferred by will or trust when you die. Instead, they’re transferred to your beneficiaries, which can be an individual or institution, so it’s important that you update this information as well.

Managing a relationship is hard enough without having to fight about money. A financial professional can help couples with differing investment styles and make recommendations based on what's mutually beneficial.

Learn more about investing.