Sara and Joe were recently married. They dated for five years before marriage but never lived together.

They briefly talked about money before marriage, but had no serious discussion about spending and saving.

Now that the wedding is behind them and they are adjusting to life as husband and wife, how do they begin discussing money?


It’s better to begin discussions BEFORE a major disagreement on spending.

But in reality, it’s usually a disagreement that triggers action.

Most couples postpone talking about money because it’s never easy.

But here are five steps to take now to start the conversation.


1. Identify Wants

To make this step fun, use imaginary money – reach beyond what you currently have, or pretend you won the lottery.

Ask your spouse, “If we had 20 million dollars (or whatever amount you determine), how would you spend it?”

Grab a pen and paper and start writing down your wants — buy a bigger house, pay for children’s college, travel when kids go off to college, buy a beach home, etc.

Remember, this activity is brainstorming — refrain from criticizing each other’s wants.


 2. Be Real

Now, it’s time to be real. There’s no imaginary money.

Review the list of wants, thinking about how much money you have available.

Cross off the unrealistic wants.

For example, you may have listed a convertible Lamborghini, but realistically, there’s no way you would buy a car worth over $300,000 … well, at least not at this juncture in time.

If it’s too hard to cross off your aspiration, then move it to a “later” list.


 3. Identify Shared Wants

Once you’ve shortened your list, review each item and identify which wants you both share.

These wants are what you have in common and are easier to prioritize.

Also, add to the list any wants you may have overlooked.

For example, paying off debt or establishing an emergency reserve.


 4. Prioritize Wants

Make two copies of your realistic shared wants, one for yourself and the other for your spouse.

Each person then ranks each want, with “1” being the top priority.

Now, compare your list.

You’ll see easily where you and your spouse differ in spending money.

For example, your spouse may rank paying for kids’ college education as #3, whereas you rank it as #5.


 5. Select Top Five

Your objective in this step is to have the same top five wants as your spouse.

You don’t have to have the same priority for each want, but your top five should include the same wants as your spouse’s.

To get to this point, you’ll need to discuss your rationale for ranking your wants.

Look at the purpose of each want, the amount, and how long it would take to save for it.

In order to succeed in this step, set ground rules for your discussion to include but not be limited to the following:

Allow each person to voice their opinion without interruption and truly listen to each other (remember, you’re in this relationship for the long term).

Add humor when possible (humor has a way of diffusing tension).

Take a break from the discussion if it gets unproductive (i.e., if the discussion gets too heated).


If you successfully achieve the above steps – and I recognize #5 will take the most effort – then you and your spouse will have a shared vision of how to spend money.

You will share the same top five wants (or financial goals).

With a shared vision, now you’re ready to develop a plan to achieve those goals.

(Update to original post from July 22, 2014)


ABOUT THE AUTHOR:

Niv Persaud, CFP®, CDFA®, RICP®, is a Managing Director at Transition Planning & Guidance, LLC. Life is more than money. It’s about living the lifestyle you want and can afford. For that reason, Niv consults with clients on money, life, and work. Her approach capitalizes on techniques she learned throughout her career, including as a management consultant, executive recruiter, and financial advisor. Her services include developing  comprehensive financial plans, divorce financial reviews, and retirement plans. Niv actively gives back to her community through her volunteer efforts. She believes in living life to the fullest by cherishing friendships, enjoying the beauty of nature and laughing often — even at herself. Her favorite quote is by Erma Bombeck, “When I stand before God at the end of my life, I would hope that I would not have a single bit of talent left and could say ‘I used everything you gave me.’”