CPAs weigh in on how to keep your finances aligned for the long-term as a couple.
Talking about money with your partner can be difficult, no matter how often you do it. To make it easier, we spoke with CPAs for insights into how couples can make their financial conversations more impactful at different stages of their relationship.
Courtship: Find common ground
When first broaching the topic of finances, tread lightly, recommend experts.
“Like any conversation, when you’re getting to know someone, take it gradually,” says CPA Michael Deepwell, principal of Vancouver-based Lamp Financial Inc. “You may hit the tip of an iceberg at the beginning but, later, you can go deeper into the discussion.”
What you first discuss, adds Stefanie Ricchio, founder of The Modern Accountant, will depend on your age and stage in life.
“In your 20s, you have the luxury of time and don’t necessarily need to get into specifics,” she says. “While, in your 30s, you can’t wait a year or two to have defining-moment conversations to figure out if what you want financially is the same.”
Regardless of age, couples should offload baggage, including habits and outlooks picked up through our upbringing and early spending behaviour. According to a 2021 study by Meridian Credit Union Ltd., 55 per cent of Canadians agree that their childhood experiences with money still impact them today.
“It’s things that we don’t even know that are so ingrained in our financial expectations,” says Deepwell. “Until we start seeing a different way, we don’t know what’s possible.”
Once those details are divulged, broader financial and life goals can be shared.
“You need to figure out your game plan as a couple and that’s more than just numbers,” says Deepwell. “It’s a mindset where you think of the possibilities, discuss your priorities and then make it a reality.”
Long-term commitment: Prepare for the expected and unexpected
As a relationship gets more serious, regular check-ins are necessary to keep goals aligned and make adjustments as you move through and plan for life’s different stages, particularly retirement.
Those check-ins help prepare you for big events. Planned events such as travel, marriage, buying property or childbirth are easier to plan for over the unexpected such as job loss, incapacity or death, all of which require quick reaction, while dealing with shock and despair.
Deepwell recommends exploring “what if” scenarios to prepare as best as possible and ensure you’re aligned. “This gets you thinking about what you would do if something does happen, so it’s not as jarring and there is some foundation for making tough decisions.”
Ricchio adds the need for both parties to be knowledgeable participants in the household finances. “Understanding your financial position together is paramount, particularly in times of stress when unexpected routes have to be taken,” she says.
At any stage: Lay it out on the table
The hallmark for any successful financial relationship is transparency. From the first conversation about money, both parties should be open to eventually sharing all aspects of their financial position including income, debt, assets and savings, and any aspirations for their financial future.
For the long-term, transparency involves all of that and much more, including whether you choose to fully integrate finances with shared accounts and credit cards, as well as discussing every financial decision you make, from purchases, to loans, to investments.
“It boils down to being open and honest, and finding equity,” says Ricchio. “If both parties feel that the financial responsibilities are split equitably, it works. If not, it’s an opportunity to come together and discuss how you can achieve a better balance.”
Initiating a discussion about finances might feel awkward and uncomfortable, but it doesn’t have to be. From CPA Canada’s book, Love and money: Conversations to have before you get married, here are four suggestions for talking about money with your partner:
- Make space for a meaningful conversation: Pick a time and place where you can both devote your full attention to the discussion – that means turning off distractions, like a cell phone – and choosing a time of day when you can fully concentrate.
- Act in a way you want your partner to act: If you don’t like to be interrupted while speaking, your partner probably feels the same way, so try to focus on listening to their whole idea before chiming in.
- Ask questions: To make sure you understand your partner’s views, ask open-ended and probing questions.
- Be willing to compromise: This is the bedrock of every healthy relationship and is especially true when talking about shared finances.
Keep the dialogue going
Pick up a copy of CPA Canada’s Love and money: conversations to have before you get married for more financial insights. Plus, check out our webinar about building lifelong financial plans.
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.