Sharing your money-life with your partner – how to make money work with your man, or your woman, or whoever

Love is a many splendored thing. Love lifts you up where you belong. All you need is love.

All of these things are true-ish, sure, but love is also work. At least, if you want it to be successful and lasting, it takes some effort. And one of the things that you are going to have to work on with your true love is how you manage money as a team.

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I don’t know what your specific circumstance is. Maybe you’re a 45-year-old with five million dollars contemplating your first marriage, maybe you’re 22 and moving from your parent’s house into your first home with your girlfriend, maybe you’ve been living with your partner for three years and are starting to worry about how you two manage your cash. Whatever your situation, when you have decided to share your life with someone, you need to have many open conversations with your romantic partner about how you’re going to manage money. With finances one of the leading causes of divorce in America, the more and better talks you have about managing your cash, the less likely you are to have to go to the mattresses with your honey over money.

Today, let’s just start with the basics, with some conversations that you have to have if this whole crazy thing is going to work. This is an entry level guide – when we get into topics like investing, things will get more complex, this discussion is just meant as a starter guide.

The first topic: You earn what? You owe what?

Whether you’re preparing to comingle your financial lives for the first time, or you are deep into a dysfunctional money partnership, the first thing to talk about is where you stand financially.

Sit down with your partner, and have an honest talk about your money. How much do you earn? How much student debt do you have? How much credit card debt? Have you been filing your tax returns? Be honest – it will hurt less in the long run. You need to know where you both stand, financially, if you’re going to make this partnership work.

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The second topic: What do we need to live?

Think of this as a shared budget-setting process. Together, work out how much money you need on a monthly basis. I assume you’re living together if you’re in a financial partnership, so consider what you spend together on rent/mortgage, groceries, utilities, insurance and any other shared expenses. Write up a basic, shared budget, so that you know how much you need to collectively contribute to your shared living.

If you’re living beyond your means, you need to start thinking of ways to cut back. Doing this with a partner can be a great motivator, and a great way to deepen your relationship if you do it right.

The third topic: How do we divide it up?

This is a more delicate discussion, and different things are going to work for different people. If you both work, and one of you earns a lot more than the other, you may want to split the bills unevenly and pay in proportion to what you earn (if you earn $100,000 and he earns $50,000, you may want to way two-thirds of your shared expenses and let him pay a third). If only one of you is working, this is a lot easier to work out!

Say you’re staying home to raise your baby, and he’s working. He’ll obviously be paying the bills, but make sure you still get involved in managing the household finances. No matter how much you love him, smart girls know where the money is going. Make it clear who is going to contribute what (money, child rearing, homemaking – whatever!).

The fourth topic: Who’s in charge?

The next step is to decide how you’re going to manage your shared expenses. Will you have a joint bank account that you both draw on, or will one of you pay everything and get a check from the other? Who will monitor your shared spending? If one of you is more organized and comfortable tracking spending, let that person take the lead, but make sure both of you feel empowered around your shared finances. Define responsibilities and agree to regular chats about money – again, the more you communicate, the better!

With these four easy conversations, you’ll be laying the groundwork for a healthy approach to sharing finances. We’ll talk more about this as time goes by, but there’s no time like the present for starting to work on your relationship’s financial fitness!