partners life insurance

How to talk to your partner about finances

If you’re hoping to have a romantic evening with your partner, launching into a conversation about your finances probably isn’t the best way to go. But when it is time to talk numbers, there’s a way to talk to your partner about finances without making you or your partner lose your cool.

Start with your goals

It’s helpful to be purposeful when you talk to your partner about finances. That’s why it’s great to start with an endpoint in mind and work your way backwards. As much as you can, focus on major long-term goals (think about big ticket items like houses and children). But it’s okay to start with short-term goals too. For example, perhaps you want to take a vacation in six months. Or maybe you’re getting ready to upgrade that bed you’ve had since university (we see that sheepish grin).
Whether you’re focusing on 6 months or 6 years from now, imagine your future life and fill in as many details as you can. Where are you and your partner living? What do your salaries look like? When are you planning to buy a house or have kids? Do you have debts hanging over your head?
Remember that neither one of you is right or wrong here. But you both need to be honest so you can identify a financial game plan you agree on.

Figure out how much you spend on a monthly basis

You may avoid looking at your monthly bank and credit card statements as much as possible. But even though it can be a painful exercise, we can’t stress enough how important it is to know exactly how much you’re spending each month. One of the big lessons we’ve learned while building PolicyMe is that most people underestimate their monthly expenses. And when talking about finances with your significant other, there’s nothing worse than having the facts wrong (or having alternative facts).

Luckily, with all of the online budgeting tools out there today, calculating your monthly expenses has never been easier (and you don’t even have to deal with paper cuts!). Using Mint or another budget app, you can upload or enter your financial details and easily understand all the money that went into your bank accounts (for example, salaries, returns, and rebates) and everything that went out (such as your rent, groceries, shopping sprees, and restaurant splurges).

You can also have the app calculate the difference between what came into your account and what went out. Known as your net income, this difference represents your savings. It’s the money you have to put towards those goals you identified earlier.

Create a budget

Are your savings enough to cover the price tag on your goals? If not, it’s time to start a budget. Together with your partner, create a realistic budget based on the future you both want. Remember that marriage is a partnership, not a dictatorship. So be sure to craft your budget using words like “we” and “us” instead of “me” and “you.”

Understand related financial topics

When blogs and other online resources give you financial tips, they usually stop at the budgeting piece. They tell you to make a budget and stick to it. And if you successfully tackle these two simple steps, they say, you’re all set.

But let’s be honest—if saving money was this easy, payday loan companies wouldn’t be making millions. So what do many online resources leave out? They don’t cover the basics of other important financial topics.

For example, what do you do with all the money you’re saving by sticking to that budget you made? Should you put it in a checking account? We see that as a wasted opportunity.

Instead of letting your savings sit dormant in your bank account, look into retirement saving and investment options. Why not generate some income on that hard-earned cash?

And once you’ve done that, take a look at your insurance options. Having trouble figuring out what you need? We’ve made things simple. Our proprietary insurance algorithm helps you identify the most cost-effective life insurance policy that gives you the protection you need.

If your high school calculus days still feel too close for comfort, any topic that’s heavy on numbers may seem scary. But don’t be afraid to read up on retirement savings, investing, and insurance. We get that they’re complicated, and we don’t expect you to crack the code in just one day. Instead, make it a goal to learn more about them over time, and talk to your parents, friends, or other people you trust about what they’re doing with their money. A little bit of confusion is worth the benefits of making the most of your savings.

Because life insurance can be complex and overwhelming, we’re working hard to give you trusted content on it all in one place. To get your feet wet, take a look at our blog, our Insurance 101 guide, and some of the key topics you should consider when buying life insurance. For example, learn about the difference between term and permanent insurance or why your group insurance may not be enough.

Finally, make it routine

Want to stop dreading the finances talk? Have it more often. Schedule specific times when you and your partner agree to talk about money. (You can even call them “money dates” if it helps you get in the mood.) This way, you both know exactly when you’re going to sit down and chat dollars and cents instead of waiting for someone to awkwardly bring it up. When you plan to discuss finances in advance, you can come to the table prepared and in a good headspace to talk.

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