Financial Conversations to Have With Your Partner

Having a conversation with your partner about finances is a great way to build trust and get on the same page about spending, saving, and planning for retirement. You may decide to do this when you first move in together, although some couples may start talking about their approach to saving and spending much earlier in the relationship. Whenever you decide to have the money talk with your partner, here are some discussion points to get you started.

Discuss approaches to budgeting

One of the most important financial conversations you can have with your significant other is setting a budget. To set a budget, you need to determine how much money you have coming in each month and how much you need for essential expenses. Partners may have different approaches to putting together a spending and saving plan—one partner may want to budget down to every dollar while the other may prefer a less regimented approach. If you disagree, try to find common ground and work toward a method that works for both of you.

Plan for retirement

Take time to talk to your partner about how you’re saving for retirement. How much are you contributing to your tax-advantaged retirement accounts each month? Do you have additional sources of income you’ll be able to use?  It may be a good idea to speak to a financial advisor who can recommend a savings and investment plan based on your income, lifestyle, and retirement goals.

Discuss estate planning

Making a will is an important financial conversation to have with your partner because it ensures that your assets will be distributed according to your wishes when you pass away.  Estate planning may include other steps such as creating a living will (to establish what care you receive if you’re ill or injured and can’t make decisions for yourself), naming beneficiaries (to your bank account, life insurance, and  more), durable powers of attorney (which appoints one or more people to act on your behalf if you cannot state your wishes due to illness or injury), and writing a letter of intent (to provide instructions to your heirs or family).

Consider life insurance

Life insurance can be part of a smart financial plan, especially when you rely on each other’s income. If one partner dies, life insurance can help to financially support the surviving partner and any dependents.  You’ll want to talk about how much coverage you may need and what riders, if any, you want. If you’re looking for lifelong coverage and other perks, like cash value, consider permanent options like whole life insurance or universal life insurance.

Discuss all your financial goals

Beyond budgeting, life insurance, and retirement, it’s important to discuss the rest of your financial goals. What are your long-term goals? Do you want to retire early? Do you want to have kids? If so, what about saving for college and other expenses? Do you want to buy a second home? Once you have a clear understanding of all your goals, you can start to create a plan to achieve them.

Source: iQuanti