How to Have Difficult Financial Conversations

Life is full of conflicts, both big and small. There will be times when even the closest of relationships will be tested by disagreements regarding the best path forward. This can certainly apply to money, which can often serve as a great source of tension between friends, family, and especially spouses running a shared household. While hopefully those we are closest to will have similar outlooks on how to use our limited financial resources, this is not always the case.

If left unaddressed, these disagreements can fester into much larger issues that can doom relationships. Though far from easy, it is important to discuss these differences of opinion and attempt to find common ground. Here are some pointers to help you have difficult financial conversations.

Take the Time to Prepare

Prior to entering into the conversation, it is important to come prepared with the points you wish to address. This demonstrates your seriousness, while simultaneously allowing you and your counterpart to have a conversation with all the facts out in the open.

For instance, if your partner is spending too much money eating out, take the time to tabulate exactly how much of your shared finances are being devoted to eating outside the home. It is possible that your partner is unaware that he or she is running up the bill, so bringing this to their attention might be all that is needed.

Of course, not all financial disagreements can be resolved so easily, especially if it is a matter of priorities. Continuing with the above example, perhaps your partner has a stated preference of eating out to save on the time required to prepare meals and clean up afterwards. In this case, preparing an overall budget of your total income and expenses can demonstrate in clear, black-and-white numbers the amount that you are collectively spending on food (and the opportunity costs that you are forgoing).

The Time and Place Matters

Make sure to choose the appropriate time and place to conduct the discussion. It will help if you state your intentions in advance, so as not to surprise your counterpart.

Your discussion has a better chance of going smoothly if you can have the conversation in an unrushed, private setting. Therefore, try to find an hour that is convenient to you both, with minimal chances of being distracted by other obligations.

Because talking about money is a highly personal subject matter, finding a place where the two of you can be alone is of paramount importance.

Be Forthright with Your Concerns

It can be difficult to find common ground if you leave items open for interpretation. While coming prepared with the numbers of your finances is important, it is just as vital that you clearly communicate your issues and concerns.

Do not beat around the bush. If you are worried about your lack of savings, say so. If you want to cut down on your discretionary spending, spell it out in direct language.

Being both honest and transparent will help ensure that you are discussing the issue at hand. It will also help to encourage your counterpart to state their position as well. Honestly sharing both of your positions can help you to arrive at an effective resolution.

Be an Attentive Listener

Conversations are a two-way street, and the only way to have a productive discussion is to engage in a give-and-take. On the other hand, immediately launching into a diatribe is likely to leave your counterparty feeling defensive and unmotivated to share their perspective.

Once you have laid out your position, take the time to ask for their impressions and feedback. Let them speak without interrupting, and leave them plenty of time and space to adequately express their point of view.

It is always a good idea to ask any follow-up questions in a non-accusatory manner, giving them the freedom to respond without feeling like they are under attack. This will encourage your counterparty to share their unfiltered views, which will allow you to fully understand where they are coming from and providing the space to reach an agreement on the best path forward.

Remain Cool, Calm, and Collected

Discussions about money are never just about money. Rather, they are an expression of priorities, now and going forward.

It can be the height of frustration to discover that you and your partner are not on the same page when it comes to planning your shared future.

However, getting hot-headed, angry, and accusatory will only fan the flames of disagreement. You are unlikely to reach a long-term, satisfactory solution by shouting down your adversary. On the contrary, the sensitive nature of discussing your shared finances requires you to stay focused on the primary purpose of your conversation: reaching an understanding on your finances.

Conclusion: Finding Common Ground

Having a difficult financial conversation is no different than any other sensitive discussion. You will want to share your perspective in a calm, measured tone, taking the necessary time beforehand to collect your thoughts and prepare your talking points.

In addition to voicing your opinion, you will want to make sure that your counterpart feels fully comfortable expressing themselves. This is all towards the purpose of finding common ground, regardless of the subject matter at hand.

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