I’ve come across a lot of nonsense in my time covering personal finance: comments like “I’ll save when I make more money” and “Investing is for rich people.” There’s also the classic, “My husband is better with money than I am.” (Please.)
But perhaps the most frightening financial statement I’ve ever heard came from a working mom of two. Let’s call her Wendy. She came to me for advice, concerned by the fact that she and her longtime partner (and dad to their kids) were living paycheck to paycheck.
I quickly discovered Wendy had no idea how much money her partner earned. And while she had thought about asking him about his salary, she was afraid of how he’d react. He never really entertained conversations about money. He handled most of the bill payments and didn’t seem to like when Wendy asked financial questions. She said that, to him, it felt like finger pointing.
But how much your partner makes is necessary information. Without knowing numbers, how can you make smart joint decisions for your family?
I’m sorry to say that Wendy’s situation is not exactly unusual.
A survey by Fidelity found that 40 percent of married people, both men and women, had no idea what their spouses brought home. And of that group, 10 percent of people were off by a full $25,000 when they guessed.
What’s so hard about talking money with with the people closest to you?
Perhaps it’s something ingrained in us from when we were younger: Many people’s parents taught them that it was impolite to ask others how much they earned. And then there’s the issue of tying our sense of self-worth to how much we make: If we think we’re underpaid or earn less than our spouse, we may hesitate to bring up the topic because we don’t want to feel crappy about our own finances.
But this simply can’t (and doesn’t) work. We require facts in order to live honest lives. Your relationship can’t thrive if you’re not open and transparent with each other, and refusing to talk numbers has a huge price: If you’re blind to your partner’s salary, you can never truly be on the same financial page.
On the other hand, here’s what comes with being honest:
Equality in decision making. Do you share (or plan to share) expenses like a mortgage/rent, vacations, a car, etc.? Then you should share info about your incomes, too, so you’re fully informed before making a big purchase.
The ability to set and work toward realistic long-term goals. When can we retire? Can I afford to quit my job temporarily or full-time to stay home and raise our kids one day? You can’t possibly answer these questions with confidence if you don’t know your partner’s income — it’s a vital variable.
Financial security. When you know how much each of you earns, you also know whether you’re living within your means. And you can do a better job of tackling debt or saving an emergency fund.
The sooner you share your numbers in a relationship — not just salary but debt, savings, and credit scores — the better.
True, none of this is exactly first-date material. But you need to get honest about it with your partner as you get serious. And it’s definitely a conversation to have before living together or getting married.
How to Have The Money Talk
When you’re ready to talk, bring it up at your next dinner date or create a “money meeting” on your calendar. Open the conversation by discussing your joint goals so you can commit to a plan together to save toward them. To find out your partner’s salary and other financial basics, lead with your own example. Try something like, “I’m expecting to earn X this year, which should help with our goals. I’m hoping to save X percent to help us pay rent/buy that car/go on that trip. How much will you earn this year?” There’s no need to make it overly formal — when my husband and I talked about our financial picture before getting married, we did it over a round of margaritas.
If your partner gets resistant when you ask, take that as a cautious sign that they’re not comfortable talking money. But don’t give up — keep bringing it up, framed around your joint goals, and tell them that this transparency is a need of yours in the relationship. Hopefully the two of you can work through it and get to a place where you can share everything, including your finances. Otherwise, you might want to think twice about merging your money — or life — with someone who simply won’t communicate.
Farnoosh Torabi is a financial expert and author of the best-selling book “When She Makes More: 10 Rules for Breadwinning Women.”