Whether you’ve recently tied the knot, plan to soon or are just getting serious, now is the time to talk about money! Sound unromantic? Well, unfortunately, money is a common cause of stress in relationships, and if it is left unaddressed it can start impacting more places than just your wallet. According to AICPA research, nearly three in four (73%) married or cohabitating Americans say financial decisions are a source of tension in their relationship. Of these, nearly half (47%) admit this tension has negatively impacted intimacy with their partner.

Further, in just the last year, 7 in 10 Americans married or living with a partner (69%) have had a disagreement with their companion about finances. Disagreements most often revolve around needs vs. wants (36%), spending priorities (28%), and making purchases without discussing them first (22%).

It is important for couples to address financial values. Don’t worry, the AICPA's National CPA Financial Literacy Commission has put together some steps you can take with your partner now, as well as tips to consider along the way, to help prevent financial decisions from coming between you two. Here’s how to start.

Step 1. Start the conversation off simple & just talk

Early in your relationship, be frank about where you stand financially. If one of you is struggling with debt or has very specific financial goals, you should talk about it now. Discuss your money habits, too. Are you a risk taker or cautious about your money? A saver or a spender? Your attitudes about money don’t have to be identical, but if there are big differences, some compromise may be required. It’s better to hash these issues out now rather than let them cause misunderstandings or arguments later.

Your early conversations should include a discussion of how each of your families handled money when you were growing up. Was it never discussed? Did you live on a tight budget and scrimp sometimes? Or was there always plenty for whatever you wanted? It’s useful to know what experiences and attitudes you grew up with so you can develop an approach to money that you’re both comfortable with. 

The conversation is fundamentally important to allow for both parties to be aware of what they’re getting into. This is often the most acute test of, “for better or for worse.” Whether it is good debt (mortgages) or bad debt (unsecured credit), do not avoid sharing the details of your financial situation. Honesty upfront about one’s financial history can pay dividends prospectively as it allows the new blended union to strategize together on how to ameliorate any past issues and maximize potential future advantages.

Let this conversation set the tone for future open and honest discussions and don’t let it be a one-time talk. Be sure to regularly check-in and share your thoughts and financial progress on the way to your goal with your partner.

• Tip - Discuss Money Quirks: Unless you’re just getting started in life, chances are you are both bringing pretty engrained financial habits into your relationship and there are likely to be some conflicts. Try to learn about each other’s habits, discuss non-judgmentally which habits are working and which might be harmful, then try to adopt a hybrid approach that mixes in the good habits and works to negate any bad.

Step 2. Run the numbers & (again) just talk

Discuss your incomes and review your financial documents, like savings and checking accounts, debt, real estate or other assets. Subtract your debt from the value of your assets—cash, all investments and other assets—to determine your net worth, which is one indicator of your financial health. Avoid being judgmental as you gather the facts, and remember that you’re a team, you each have your strengths and weaknesses.  

It may be a good idea to get credit scores for each of you as a measure of your financial health. 

• Tip- Yours, mine or ours?  If you’ve each become accustomed to managing your own checking accounts and credit cards, discuss whether to combine everything or keep some independent resources for each. If there are step-kids involved, discuss before marriage how expenses for the kids will be handled. Does that come out of the joint money? Does it come out of one spouse’s money? If you plan to combine finances to be all together, talk about ground rules for what purchases should be discussed first. That $800 watch or $1,200 bike on the joint credit card bill, if not discussed in advance, can be the source of some tense conversations.

Step 3. Take action & establish a joint-spending (and saving) plan

There is no one-size-fits-all approach to managing finances as a couple.

You’ll need to decide how to best combine finances for your relationship. Some couples choose to keep separate spending accounts, so they don’t have to worry about accidentally both spending the last dollars in a joint account. Some couples have a joint bill-paying account where both contribute, while others throw it all together and then just spend cash on non-essentials, which helps to control over-spending on wants.

A good place to start is a simple joint budget that you can refine and work on together. Start by adding up the income the two of you can expect each month after taxes (your take home pay, in other words), as well as any supplemental income. Make a separate column with all your expenses, including housing costs, utilities, car payments, debt payments, taxes on non-salary income, savings, commuting costs, average grocery charges, and other spending money you’ll need for daily activities. Subtract your monthly expenses from your monthly income.
If you need help creating and managing a monthly budget, use the AICPA’s budget analysis calculator to run a report that will show where your money is going and identify areas for improvement.

• Tip - Create a Fun Money Fund: Try to work some “allowance” money into the budget: money that each of you can spend on whatever you want, no questions asked from your partner. This can help avoid money fights.
• Tip – Review Health Insurance.  Do you each have coverage at work? Talk about whether you can save money by combining coverage under one policy and giving up the other – and get the facts on which coverage is better. 

Step 4. Set short- and long-term priorities

It’s hard to achieve your goals if you don’t know what they are—or realize what the other person wants. Saving will be easier, too, if you have a clear incentive to do it. Do you want to buy your first home? A bigger place? Set up a generous travel fund? Discussing your dreams is the first step to making them come true. 

If after building a budget together you have some money left, you can use it to save for those big goals together. If after running the numbers you realize your income is less than your expected expenses, you’re probably going to have to decide how to cut back on spending.

Whenever possible, make reducing your debt a priority. It will reduce or eliminate the interest rate you pay on your outstanding debt balances. And wiping out debt and interest payments will leave you more money in your monthly budget to spend. Heavy debt, especially if you miss payments, could lower your credit score. A low score could affect your ability to borrow money for a home, among other goals.

• Tip - Set Joint-Goals: Budgeting as a couple can often lead to more over-spending, if you are both earning, and your combined incomes add up to more than your needs. Take care that before you adjust spending to match the higher income that you set some savings goals together, perhaps starting off more aggressively to tackle things you may have previously found tough to save for when it was just your income.

• Tip - Got student loans?  Discuss the repayment plan. Will each partner contribute toward repaying the loan of one spouse, or will it be up to the person who incurred the debt to repay it? Student loans can be a drain on joint finances and a source of tension if not discussed beforehand.

Step 5. Put your plan in action, set money dates & check-in

You’ve talked. You’ve talked some more. You’ve run the numbers. And now you have a plan. It’s time to decide who will be the primary bookkeeper, so that you can ensure all bills get paid on time and that accounts don’t become overdrawn. However, make sure that the non-bookkeeping partner is kept informed of what’s going on.

Consider setting a monthly or quarterly money date where you review the budget to see what went well, what went wrong and see if you need to make adjustments. It’s also a good time to discuss any upcoming expenses such as vacations, holidays or home repairs needed.

• Tip- Don’t be afraid to ask for help: You’re likely going to have questions or hurdles along the way, and your local CPA is a great resource. They can help identify ways to improve and let you know if you’re headed in the right direction, in addition to providing expert guidance when it comes to more technical steps, like combining or sharing accounts, estate planning, etc.