Talking about money with your partner is tough. But when one of you is traditionally employed and the other owns a business, it can be even more confusing and complicated. Not only do you make your money in different ways, but you also have to manage your money differently. Whether or not you combine your finances, it can get tricky.
Here are some tips for talking about money with your partner, specifically for business owners.
When Should You Talk About Money With Your Partner?
I’m a huge proponent of having tough money conversations. So while I don’t recommend bringing up your salary or your student loans on your first Tinder date, I do believe that couples should talk openly about money when things get serious. So when is that?
Before you make an investment together.
If you and your partner want to buy a car, a house, or even a dog together, talk about your finances. Since both of you will be emotionally and financially invested in this purchase, you should be able to trust that both parties can handle the payments and the financial strain.
If you want to move in together.
You wouldn’t move in with your best friend if you didn’t know at least a bit about their financial situation. It’s not being nosy, it’s protecting yourself! You need to know that your roommate won’t dip out on you six months into a year-long lease. The same goes for your partner.
Before you combine finances or assets.
This should be obvious, but before you combine any finances or assets – bank accounts, credit cards, your mortgage – you need to establish financial transparency.
If you have wildly different financial situations.
This might be an unpopular opinion, but even if you’re casually dating someone with a different lifestyle than yours, it can be beneficial to talk about your finances. If they want to split $200 dinners every weekend but that doesn’t fit into your budget, talk about it. If you want to buy them expensive gifts but aren’t sure if that will make them uncomfortable, talk about it. The sooner you bridge the gap, the better off you’ll be.
How to Talk About Money With Your Partner
1. Approach the conversation with the right mindset.
You know when you shouldn’t talk about money? After a long day at work when both of you are exhausted. Or in the middle of a fight about who should do more chores around the house. Or when you’re lying in bed at night just about to fall asleep. No one wants to be blindsided by a money conversation, especially when they’re not in the right mindset for it.
To set yourselves up for success, plan your money conversation ahead of time. Pick a time when you’re both available to sit down and talk. If you’re nervous, make a date out of it! Cook a nice dinner at home, have a glass of wine, and then dive in. Trust me, the conversation will feel much better if you’re both on board for it.
2. Get it all out on the table.
Before you can plan for your future, you have to talk about your present. This is the hardest part. Be honest with your partner about your income, your debts, and your personal spending priorities. Then, ask the same from them. This will give you a full picture of your financial situation as a couple.
It’s important to withhold judgment during this step, especially if this is your first time talking about money. We all enter adulthood with different money mindsets. We all make mistakes. If your partner is paying down credit card debt from their college days or trying to build their very first emergency savings account, be supportive. These are goals you can support them with emotionally, even if you never pay a penny towards their debt.
3. Explain key differences between traditional employment and business ownership.
Of course, entrepreneurs often have unique financial situations. If you want your partner to understand and appreciate your work, explain to them the key differences between your career and theirs:
Business vs. personal finances.
Your partner should know that your business’s bank account isn’t truly yours, even if you’re a solopreneur. Those funds belong to the business, and you need to save some of them for business expenses, like taxes, supplies, and other operating costs. Explain how much of your revenue becomes profit and how much of that profit becomes take-home pay. It might seem like common knowledge to you, but this might be a totally new concept for them!
If you want to combine finances with your partner, decide what that means for your business. Will they have part ownership? Or will you only combine personal finances? Will you ever work together? It can be helpful to talk to a financial professional during this step.
Insurance, retirement, and paid time off.
If your partner is traditionally employed, chances are they receive benefits from their employer. It’s important for them to understand that this isn’t the case for you. You are your own employer, and these “benefits” come straight out of your pocket. If their health insurance is paid for but yours is several hundred dollars a month, that’s important to talk about.
Also, talk about sick time, paid time off, and taking time away from your business. As a business owner (especially a solopreneur), there is no paid time off. If you want to take a week off from your business, you’ll either have to 1) accept a week without profit or 2) work double the week before vacation to make up for it. Your partner should understand that if you plan on taking time off work for vacations or family events.
Does your take-home pay vary by month? If so, let your partner know! Even if it has no effect on their finances, they should know that you’ll have some slow months here and there. That way, they’ll be more understanding if you need to skip a date night when you’re not making as much (or if you want to go out to celebrate when you’re making more!).
4. Start small.
Inevitably, you’ll both find ways you could improve your spending and saving habits. When you find these things, start small! Money is an intensely personal thing, so don’t feel like you both have to be on the same page on Day One. Instead, each choose one small improvement you’d like to make in the coming months, and act as each other’s accountability partner.
5. Set goals together.
Your money conversation shouldn’t be all debt and budgets. You should also have fun! Set some money goals that you can work towards and enjoy together. Maybe you want to take a weekend trip, buy a new sofa, or visit that crazy expensive new restaurant in town. Whatever your goals, create a plan to reach them together. It’ll bring you closer in the process!
6. Make it part of your personal finance routine.
Talking about money with your partner isn’t a one-and-done thing. Make it part of your monthly finance routine. Touch base, review your budgets, and share any issues or wins you’ve experienced in the past month. Money is just another way for you to practice your teamwork and get on the same page.