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Finding Financial Compromise with Your Partner

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Talking about money with a spouse or partner is often difficult, but never more so than when the two of you share finances but have diverging goals. Maybe one of you wants to save for a home while the other prefers to prioritize paying down debt. Maybe one of you is a chronic saver while the other wants to use your funds for home improvement or travel.

How can you and your partner find common ground when you aren’t on the same page about money?

1. Work together to establish short- and long-term goals

Juggling the financial needs of two people is a lot easier if you know what each other’s priorities are, both now and in the future. So, even if your priorities don’t align currently, sit with your partner and make a list of your individual financial goals. These may include short-term goals such as buying a new piece of furniture or planning a trip, but they should also include more long-term priorities such as paying off student debt, purchasing a home or even anticipating a future career change.

Highlight the instances where you align on your finances. You should also identify the places where you disagree and ask one another a simple question: “Why?”

In other words, it’s not enough to simply know about one another’s financial goals. You also need to understand why you and your partner want the things you want. For example, your partner may prioritize travel because they want to experience new things, while you may want to spend money on a home because you crave a sense of security and permanence. Both of these desires are perfectly reasonable, but they might result in opposing financial goals.

Once you have a better idea about what both parties want and why, look for opportunities to work together on one of your short-term goals that might help build toward the other’s long-term priorities. For example, can the two of you plan for your partner’s long-term goal of traveling by first paying off your credit card debt to free up money? Can the two of you make the dream of homeownership feel more attainable by first trying to save for a smaller goal, such as an emergency fund? It will be easier to prioritize joint goals if you’re aware of what your partner feels is important now and what they may be willing to put off for the future.

2. Decide how to manage money in shared accounts

If you and your partner don’t share financial accounts, you probably don’t have too much trouble dividing your finances. You might both contribute to joint expenses, such as housing payments, groceries and shared transportation, but when it comes to discretionary spending, you can only use your own money, because you don’t have access to your partner’s.

But things are often trickier for couples with joint accounts, when “my money” and “your money” suddenly become “our money.” If one partner has a significantly higher debt load than the other, or if there’s a large income disparity, it can be hard to decide who calls the shots when it comes to joint income.

One way to circumvent conflict is to set aside money each month from the general household fund for each person’s discretionary spending on things like eating out and going to the movies. That way, no one has to feel like the gatekeeper. As long as an expenditure falls within your individual budget, you’re free to do as you like. Set aside time to walk through your monthly budget with your partner to determine what the two of you can spend individually and what money needs to be set aside for shared expenses and paying down debt.

3. Learn to distinguish household vs. individual needs

To reiterate the point above, it’s important to make distinctions on your budget between shared needs, such as rent, utilities and groceries, and individual needs, such as clothing, entertainment and hobbies.

For example, if you (but not your partner) love to watch football and are willing to pay extra money for a premium cable package, that’s an individual need. However, if your car breaks down and you need to dip into your savings to cover the repairs, that’s likely a household need. Even if your partner never drives the car, you may need reliable transportation to get to work so that you can bring home your portion of the household’s joint income.

Try making a list of your and your partner’s financial asks, especially points you disagree on, and label each one as an individual or household need. When compromising on where your money goes, it’s generally best to make sure that shared household needs are covered before all else. But also be aware that the things you identify as individual or household expenses could change over time. For example, if you’ve only been seeing someone a few months, you probably won’t feel comfortable paying off their student debt, but if you marry your partner and want to apply jointly for a home mortgage, their individual debt may still negatively influence a lender's decision. Check in regularly with your partner as your relationship progresses to reevaluate what goals you want to work toward together and what you’d prefer to keep separate.

4. Communicate clearly, openly and often

Ultimately, open communication between you and your partner is the most important step to finding financial compromise. And remember, if your partner makes a mistake with your joint finances, try not to hold it against them and keep the dialogue open. As your relationship evolves, so will your financial goals. Your priorities today will change over time with age, experience and circumstances.

Be transparent about where you spend your money and what your financial goals are, and leave room for your partner to provide input as well. While you may have diverging priorities, there’s very little that can’t be solved with a healthy dialogue and an understanding that you’re on a financial journey together.

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