Talk to your partner about money

The adage "opposites attract" can apply to money attitudes as much as love. To find out if you and your spouse have financial differences that need to be addressed, start by asking these questions:

• Is one of you a saver and the other a spender?
• How do you each handle credit and debt?
• Are you concerned about financial control?
• What are your individual financial goals?

Now that you've laid a good foundation for mutual understanding, you can address some of the more tactical issues.

Figure out your current financial position.

Take an honest look at where you stand financially.

• First: Total up all your assets (what you own), and list your liabilities (what you owe) in one joint family net worth statement.
• Next: Make a list of all sources of income and expenses so you can see what your joint monthly cash flow looks like.

Put a plan in place.

From handling daily financial obligations to planning and saving for a home, children and retirement, the more precise you are about roles and responsibilities, the smoother your financial relationship will be.

Developing a plan will help you come to some agreements—and help you stick to your goals. Here are some important things to consider:

• Splitting up financial responsibilities–Decide how you'll handle expenses. For example:
  • If both of you are earning income, will you share certain expenses (for example your mortgage, utilities, groceries, etc.) and keep others separate (such as clothes, personal entertainment, etc.)?
  • If only one of you is earning income, how will you handle the need for personal money for the unemployed spouse?
  • If one of you makes more money than the other, can you agree on a fair percentage of your individual incomes to contribute to the common pool?
  Once you've determined where the money is coming from, agree on who will be responsible for the actual bill paying.
• Where you keep your money and how you keep track of expenses–Some couples prefer to pool everything in a joint account. Others prefer to keep separate accounts for personal expenses and a joint account for shared expenses. Be sure you both agree and have equal autonomy.
• Paying off debt–If one or both of you have nondeductible personal debt (e.g., credit cards and auto loans), agree to make paying it down a priority. Work together to eliminate all such debt quickly, and consult each other before taking on any new debt.
• Goal setting and saving–Discuss your goals and how you want to achieve them. What percentage of your income will you agree to save each year? How will you divide your savings between short-term goals like a vacation and long-term goals like retirement? Consider our eight savings fundamentals to help you get started.
• Investing–Once you have some savings, consider how to invest it. One person may take the lead investing in a joint brokerage account. If you prefer to have more financial independence, consider having separate investing accounts. Together or separate, the goal is to put your money to work and help it grow in a way that works best for both of you.

Don't forget to make retirement saving a part of your joint plan. The sooner you start, the less you may have to save in total each year. Start in your 20s, and you might get by putting aside 10 percent of your income for the rest of your working life. Start in your mid-30s, and you should consider saving 15–20 percent of your income. Learn more about saving for retirement.