Talking to your partner about your financial matters can be difficult – especially when you don’t see eye to eye.
According to Kelley Keehn, personal finance educator and the Financial Planning Standard Council’s consumer advocate, people often surround themselves with likeminded friends, but end up with spouses who are the polar opposite – especially when it comes to spending and saving money.
“That’s why you have to keep the lines of communication open. And if you can’t, you need to get a pro to help you,” Keehn said.
Keehn lays out a six-step conversation to help couples get on the same page financially in a guide published by the Chartered Professional Accountants of Canada. According to that guide, couples should discuss the following topics together:
1. What are our financial goals?
2. What are our needs vs. wants?
3. Where are we now?
4. How are we going to get to our goals?
5. How are we going to make changes? And what are we going to do first?
6. Plan a course of action and decide whether you need professional help, such as a Certified Financial Planner or non-profit credit counsellor like Credit Canada.
You should also look out for red flags that could indicate money issues with your partner. According to Credit Canada Debt Solution Inc., these include:
- Regular cash withdrawals
- Unaccounted purchases and expenditures that cannot be explained
- Partner lies about purchases and expenditures, to you and/or to others
- A change in behaviour, either in spending habits or attitudes towards you and money, in order to deflect attention away from themselves
- Spending more, on themselves and/or others
- A change in mail, such as regular statements or promotions from credit cards you don’t normally use, or investment firms you have never dealt with
- Less frequent mail from your regular financial services and creditors
- Partner is very concerned about the mail and doesn’t let you to see it first
Once you and your partner have discussed your financial goals and a plan, you should also try to abide by these rules as couple:
1. No surprises. Have regular discussions with your partner about money, as well as your individual assets and debts, whether in savings, chequing or credit accounts.
2. Keep a detailed budget and spending plan. You should know exactly how much money is coming in and how much is going out (and on what).
3. Do not sign any documents without reading it first. They say love is blind, but you don’t have to be. Read everything before signing anything. If you’re not sure what something means seek advice from a professional or expert.
4. Maintain separate accounts. Have one joint account for all household expenses, which each partner contributes to in proportion to their respective income.
5. Individual credit cards in your own names. Don’t run the risk of someone else ruining your good credit. Plus, two good individual credit histories are better than one joint history when you apply for a loan. And if one of you has a blemished credit record, the other's clean record can be an asset.
6. Speak to a certified credit counsellor. Some non-profit credit counselling agencies can do a free soft inquiry on your credit report to check for any inconsistencies. You can also see a credit counsellor as a couple for advice on managing money together and setting future goals.
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