How to talk about money with your partner

Family finances
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Money can be a sensitive subject, but it's essential for couples to have constructive discussions about it throughout their relationship.

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One of the best parts of sharing a life with someone is doing what you love with someone you love. However, being in a relationship typically requires making decisions about money as a couple, which means financial conversations with your partner become a necessity.

Our attitudes toward money can have a huge impact on our relationships, so how we discuss our perspectives and motivations with our partners can be the key to equitable financial decisions.

But no matter how long a couple has been together, it can be hard to start a conversation about money, points out Lucy Day, director, Relationship Management at RBC Wealth Management in the British Isles. “This is particularly true if someone feels that they don’t understand the subject, or one partner might feel they have less knowledge and experience than the other – it can feel awkward and uncomfortable to discuss it,” she explains. “Couples often shy away from getting involved in these conversations or worry that there might be fundamental differences, so they’ll avoid the subject to prevent disagreements.”

Indeed, a 2023 RBC Wealth Management survey of UK high-net-worth individuals revealed that women were nearly three times more likely than men (29 percent versus 10 percent, respectively) to feel they lacked sufficient understanding of wealth management topics.1

This is pertinent, as life expectancy at birth in the UK is higher for women (82.9 years) than for men (79 years),2 so it’s likely that some women will need a more solid understanding of their financial position to prepare themselves for the possibility that their spouse will die or become incapacitated before them.

Differences in financial confidence are not defined by gender though, and both partners should engage in open and honest conversations about their financial situation and ambitions.

Making financial decisions as a couple

If discussions about money are to be productive, it’s first important that each person feels supported and empowered to make decisions.

“Taking into account each partner’s perspectives and attitudes can produce a more considered and balanced financial strategy,” says Annabel Bosman, regional centre head, London and South-East, for RBC Wealth Management Europe. “It’s essential that both partners, whether they’re married or in a long-term relationship, agree on their joint financial strategy and set out their short-, medium- and long-term savings and retirement goals. This gives you a common vision to work toward.”

Bosman says that although couples will naturally talk about their day-to-day finances, they will often avoid discussing the bigger picture with each other – even if it’s on their minds.

“If you’re each having those thoughts in isolation, then, quite often, particularly with family finances, it’s very easy to make assumptions about the other person’s views and assume that you’re both on the same page, when, actually, you’re not,” she says. “Even if the big conversations and themes around money aren’t aligned from the outset, you’re bringing them out into the open, encouraging debate and finding that common ground rather than discovering these differences when it’s too late.”

Having financial discussions without fear of embarrassment

Consulting with an independent third party with specialist financial knowledge can be helpful when it comes to managing emotions and developing a strategy for your long-term wealth. For example, a wealth manager can help ensure the partner who doesn’t earn as much as the other, or who feels they have less financial knowledge, is brought into the discussion and encouraged to contribute.

“The important thing for me when we’re around the table is to make sure that everybody understands what we’re talking about – and if they don’t, they can feel free to say, ‘I don’t really understand this.’ Everyone’s perspective is valid,” says Day.

As is the case with any aspect of financial planning, it’s never too early for couples to speak to a wealth manager – younger couples, in particular, can “start early and start small,” says Bosman, who adds, “it’s great if they can come to the table with some notion of shared values and what they’re trying to achieve with their wealth. If not, that can form part of the conversation.”

Topics a wealth manager might bring up

Discussions often start by identifying short-, medium- and long-term actions and goals. The more immediate topics on the table might be the level of a couple’s investment risk and the need for available cash. “The conversations are more about identifying shared goals and values than diving into numbers straight away,” says Bosman. “You can then work backwards from those and build a financial roadmap of how to get there.”

Long-term topics a wealth manager might explore with a couple include:

  • Retirement goals
  • Managing income
  • Savings and investments
  • Cashflow modelling
  • Structuring for tax efficiency
  • Tactical use of credit
  • Gifting to children
  • Philanthropy and charitable giving

As people move from being single to becoming part of a couple, they might also want to look into life insurance, family income benefits and critical illness coverage, and drawing up wills that ensure each individual benefits from the other’s estate to the extent they expect.

“Moving from a long-term relationship into a marriage can have big financial planning implications,” says Adam Turner, a wealth planner at RBC Wealth Management in the British Isles. “From discussing topics such as exemptions from inheritance tax on the transfer of assets to each other, to using each other’s capital gains allowances on investments, talking about how marriage may affect your financial profile is a worthy point of discussion when considering your long-term wealth plan.”

Relationships can be complex, and, as such, couples may need to think about how to manage their finances if there are extended family members to consider – for example, stepchildren, former spouses and aging parents. They may also want to think about money management should the relationship come to an end, and how to ensure their own financial independence. Indeed, if you’ve been divorced and are marrying again, there can be additional wealth-planning considerations to think about.

Bosman and Day are increasingly seeing clients become more interested in signing prenuptial agreements. Again, these conversations – and others about estate planning and inheritance – might feel uncomfortable, but having them early so that such issues are resolved will make life easier for everyone in the long run.

Make financial discussions a habit

It might be tempting for a couple to assume that once they’ve had an initial conversation with a wealth manager, they can tick financial decision-making off their “to-do list,” but Bosman advises against this approach. “We set out a roadmap and hopefully a couple won’t experience too many deviations. But circumstances change, so they should review their list, ideally at least once a year, to see whether they need to change course.”

Whatever stage a couple might be at in their relationship and however much their levels of wealth may differ, talking to a professional advisor and having these honest conversations is essential for long-term financial success.


Sources:

1. Kantar – RBC Wealth Management brand tracking survey of 600 HNWIs, Oct. 2023.

2. Buxton, Julian. “National Life Tables – Life Expectancy in the UK: 2020 to 2022 .” Data and Analysis from Census 2021, Office for National Statistics, 11 Jan. 2024.


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