I spoke about this on CBC Radio – Ontario Today with Rita Celli listen here.
Did you know that it costs approximately $243,660 (CAD) to raise a child to age 18 (excluding inflation costs)? Now this is the kind of thing couples need to chat about.
If you’re in a serious relationship or engaged and are avoiding the money conversation because you’re afraid of starting an argument, please know that you’re not alone. In fact, this is quite common.
But, that doesn’t make it okay! Money and your money compatibility (or lack thereof) can play a huge role in your relationship. If you’re not openly engaging in conversations like this that make you a little uncomfortable, that discomfort is going to grow and come out in other ways down the line.
I honestly believe every couple should attend financial counselling before they get married to ensure they’re aligned in their goals and values, and are aware of each other’s financial circumstances.
However, if you’re looking to start this conversation on your own, I’ve created a list of the top 22 things that couples fight about when they come to me for financial counselling.
Please know that these conversations will likely be difficult at the start but it does get easier. In general I’d recommend you start slow, tackling one question at a time. This is a time for full disclosure between both of you. You should be ready to answer all the questions that you are asking of your beloved!
Gradually work your way up, making this a regular occurrence, booking time in your calendar and making it as fun as you can. Bring out the wine if you need to, and let’s get started.
1) Do you have savings? Are you currently saving?
I believe that at the very least, we should all have an emergency fund, which should be the equivalent to six month’s salary.
Maybe you’re not quite at six months-worth yet, but have you and your beloved started a fund at all? Without an emergency fund, should they lose their job, would you be expected to support them until they find a job? What about vice versa?
If your plan is to get married, have you started saving for that? How much are you both willing to spend and contribute to the cost of your wedding and honeymoon? Are you willing to put these expenses on your credit card?
In general, chatting about what you want your money to do for you, and if you have a plan in place to get there with your savings, is a great place to start this money conversation.
2) Do you have debt? If so, are you on a plan to pay it down?
This topic is usually a difficult one to bring up and talk about. But encouraging open conversations about hard topics like debt early in the relationship can create a strong foundation for even more difficult money talks down the road.
With any difficult conversation, it’s important to give your beloved the space to speak. Even more importantly, it needs to be a safe space, without judgment. If you are also carrying debt, disclose that openly as well.
Once you’ve established a baseline, get into the logistics. Are you paying down your debt consistently on a monthly basis? Are you doing this on your own or through a structured debt assistance plan? If the latter, are you aware of the potential impact of your credit score?
Know that this won’t be easy to talk about as there is often a lot of shame attached to debt. However, once it’s out in the open, you can both address the issue and decide how to fix it moving forward. Most clients tell me that they feel a sense of relief after disclosing their debt to their partner!
3) Have you ever filed for bankruptcy?
While this is definitely a red flag, it’s important for both parties to understand that there are a number of reasons why someone might file for bankruptcy. From getting bad advice when you were younger to having a lot of debt and recognizing it was the only way to create a fresh start, keep an open mind and ask about the specifics from a place of love:
- How old is the bankruptcy?
- Are you discharged from it?
- Have you learnt from this? What have you learnt?
Recognize that if you plan on having a future with this person that includes kids, buying a house, or leasing cars, their credit may still be impacted (depending on how long ago they filed), which might put more of a responsibility and burden on you to provide.
4) Do you have a pension? If not, are you saving towards retirement?
Having a plan for retirement is something we all need. Whether you and your partner have a pension or are responsible for saving for retirement on your own, these are important things to discuss early on in the relationship!
Do you and/or your partner have a company pension? Are you contributing to your employers’ matching pension benefit? Are you saving for retirement in other ways? If not, why not? What is your plan for after you are no longer able to work?
5) Are you a spender, saver, or avoider?
Is your partner someone who finds it difficult to hold onto money? Are you? What is your philosophy behind money? Is it to be saved or spent? To what degree?
Do you believe money is to be spent freely without restriction, or do you focus so much on saving that you consider anything else to be a waste of money?
Do you or your partner feel “money is no problem,” and therefore don’t bother with things like budgeting or saving? Avoidance might mean that one person ends up handling all the family finances which can end up being a heavy burden and can cause resentment!
It’s important to find a balance here, between wise spending on vacations and dining out, and saving for important life events like marriage, having children, and retirement. If you’re not on the same page in terms of your financial philosophy, it can place a huge strain on the relationship.
6) How comfortable are you talking about money?
Some people get anxious when they have to talk about money. Does this sound like you or your beloved? If either of you are uncomfortable talking about money, it’s a good idea to figure out a way around this before taking your relationship to the next level.
Things will not magically change after you get married. Talk to your elders, a specialist or financial counsellor to help resolve this issue before getting married.
7) Do you and your partner pay off your credit cards in full? (This says a lot about how someone manages their money!)
Someone who pays off their credit card is full is someone who knows how to handle credit. They understand the consequences of high interest on their debt!
Even if you or your beloved are not able to pay off their credit card in full, are you on a plan to pay it off? Or are you continuing to use your credit card and are therefore incurring more debt?
8) How will you share household expenses?
Before you move in together or purchase a house, consider:
- Will you share combined household expenses 50/50? Or will you share it as a proportion of your income?
- Will you each choose a bill and then be responsible for paying that bill on time?
- Will all income go into one pot and then all bills are paid from there?
There’s no right or wrong here, but it’s important to be on the same page when it comes to household expenses!
9) How will you determine what to spend money on?
Imagine this: as a couple you’ve been saving for a new car because your current vehicle isn’t the right size for your growing family. Your partner however, was able to find a great deal on a vacation for the whole family, and thinks that in light of the pandemic, a vacation (paid in advance for when travel is once again allowed) would do the family some good. They want to use the savings for a vacation instead. How would you resolve this?
This is actually a scenario I give to couples who are considering getting married. This exercise sheds a lot of light on how each partner would handle a financial disagreement. And of course, it’s also good practice!
Situations like this might come up regularly in your relationship, so recognizing how you would resolve a scenario like this can be helpful in determining financial compatibility.
10) Will you buy a house or rent?
We tend to assume that our partners are on the same page as us about some situations or topics without asking.
Just because you firmly believe in home ownership doesn’t mean your partner does! I’ve seen situations where a partner firmly believes renting is the only way to go. So, consider:
- How do you both feel about home ownership?
- Are you both ready to take on the responsibilities of home ownership?
- If one or both of you already own your home, how will you determine who moves where?
- If one of you already owns a house, how will you protect yourself in case the marriage falls apart?
11) Do either of you still have joint accounts or joint debt with an ex or someone else?
This is an important question to ask to get a full picture of your financial status. If you plan on making large financial decisions together, it’s crucial to know whether anyone else is a factor in those decisions.
If you or your partner have joint accounts or debt with someone else, it’s inviting a third party into your relationship, which likely will only complicate things!
If this is the case, see if these accounts can be closed or debts cleared up so you don’t have to involve anyone else in your money conversations.
12) If you were previously married, will you have a reduced pension?
Knowing if one partner will have all of their pension or not is important because it will help you both to plan for your retirement in a more realistic way.
It’s never too early to start thinking about retirement, and if there are barriers like this standing in the way of your dream retirement and the plan that goes along with it, it’s much better to address them sooner rather than later.
13) How many kids do you want?
As I quoted at the beginning, it costs approximately $243,660 to raise a child to age eighteen (18), so deciding how many you want is certainly a big topic!
This decision will not only affect your finances but your lifestyle, your retirement, where you live, the type of housing you purchase, and more.
For example, a couple who wants 2-3 kids may need to buy a house in the suburbs, whereas a couple who doesn’t want kids might be okay simply purchasing a small condo in the city.
As this decision plays into so many other aspects of your lifestyle, it’s important you’re on the same page early on!
14) Assuming you want children, will you give them an allowance?
Some parents believe that getting kids involved and talking about money is robbing them of their childhood. How do you feel about this? What about your beloved?
Would you consider paying your children for doing their chores, or are chores an expected activity in your home and a way of playing their part?
15) Assuming you want children, will one spouse stay home with the children rather than send them to daycare?
Working out the logistics of maternity leave, paternity leave, and/or daycare is an important conversation to have!
What are the expectations here? How does salary come into play? How much time can you afford to take off work? How much is too much for daycare? What’s the line between making the best financial decision, and making the decision that’s best for your child?
16) Does your beloved pay spousal or child support?
Here’s a real life example of why this is important: a woman I know, met and married a wonderful man. She had an idea of his take home salary because they both worked at the same level for the same organization.
He was supposed to have a take home salary of about $5,000 a month, which was the same as hers. A few months after getting married, she realized something was off. He never seemed to have enough money. That was when she realized that about $2,000 of his take home salary was being sent to his ex for child and spousal support.
The marriage didn’t survive.
If you or your partner pay child support, recognize the role that will play in your relationship. How does that impact your take-home salary? Is there any resentment here?
This isn’t to say that the relationship will fail if someone is responsible for spousal or child support, but it can play a large role in your relationship and so the earlier you can work out the logistics and look at what this means for your relationship, the better.
17) Are there step-children involved? How do you plan on handling expenses related to step-children?
This can be a touchy subject so I suggest figuring this out early on in your relationship.
Will there be other expenses above and beyond child support, and will that be considered before or after your joint expenses are met?
Will your spouse expect you to pick up any slack on your household expenses, for example, if they’re unable to meet their financial commitments due to extra/unexpected childcare costs for their children (whether they live with you or not)? What if this situation is reversed?
18) How do you feel about insurance?
Some people are of the opinion that insurance, particularly life insurance is a waste of money. Others feel that it’s a good way to protect their family after they have passed.
How do you and your beloved feel about this?
If your beloved doesn’t have life insurance and they pass away, what will things look like for you financially? How does that make you feel?
19) How open are you both to having a prenup/marriage contract?
Prenups and marriage contracts may not have the best connotations, but the reality is that this is a really important conversation to have! While no one wants to think about their relationship ending, it can take a lot of pressure off the both of you to have this conversation upfront. Maybe book a call with a lawyer who will be able to explain it in depth.
20) How will you manage the family finances? Who will manage them?
Would it be helpful to have one person in charge of managing the family finances or would that create more of a burden?
If one person is in charge and then they are away or something happens to them, how would the other person manage?
It might be a good idea to have regular check-ins where you go through your bank accounts, ensure all payments are up-to-date, review debts, and ensure the processes you have in place are still working for you and your family.
Or will you have a money date as I suggest here in this blog?
21) How often will you go on family vacations?
Vacations can be expensive! In addition to the cost of the trip you might also have to consider costs like lost wages or pet-sitting fees. However, never going on vacation is also likely not an option, especially if travel and adventure are important values for you.
Consider coming up with a budget and a plan for vacationing that falls within that. Including a mix of staycations along with longer overseas trips can be helpful for creating a healthy (and realistic) balance here.
22) If you have a disagreement about money, how will you proceed to resolve it?
Regardless of how “on the same page” you may appear to be now, there will always be new problems to solve, and new financial situations that arise as you continue to build your relationship and life together.
Know that disagreements are normal and expected. However, if you don’t have tactics and tools in place to work through any disagreements, they may take a bigger toll on the relationship than they need to.
Go through different scenarios with each other to see how you would react, have a support system in place, and have regular money dates with each other to discuss all things finance related. The sooner things are out in the open, the sooner they can be properly addressed. Hiding things from your partner doesn’t do much good to anyone!
This list doesn’t cover everything that couples need to talk about, but it is a good place to start. Based on your values and goals, you will likely find you are on the same page with some of these things. With others, you might find that you are open to a compromise, and then there may be some things that you will find are non-negotiable.
I know these questions are not sexy nor are they romantic, but it could save you a lot of headache down the road! I have clients today in their 40s, 50s and 60s who didn’t address these issues at the beginning and are now dealing with the consequences.
If you need help in starting this conversation with your partner, please reach out!