Article from Clearscore
11 February 2021 Sophie Murray
If you live with your partner, your finances might already be linked. Here are our tips to help you start the conversation about money.
What qualities do people find irresistible in a new partner? You might think a successful career or a luxury lifestyle top the list. In fact, most people find being financially responsible more attractive in a potential partner than having a high-powered job or top-of-the-range car. Our recent survey found that almost three quarters of people think having a good credit score and being good with money is more attractive than having a nice car or an ‘impressive’ job title. And 40% of people said they think being financially responsible is a more attractive quality in a new partner than good looks. Yet, despite wanting to be with someone who knows how to manage their finances, once in a relationship, people find talking about money a taboo subject. Almost a third of people avoid talking about finances with their partner, saying they don’t believe it’s any of their business. And the hesitation to discussing money can linger in long-term relationships, too, with one in 10 people admitting to not talking to their partner about their personal finances at all until after they’ve got married.
1. Why discussing money with your partner is important Not talking about your finances with your partner could have a serious impact on the stability of your relationship. Almost half of the people we surveyed said they’d break up with their partner if they found out they’d lied about their personal finances, and a quarter would split from their partner if they thought they were bad with money. The idea of opening up about money might make you feel uneasy, but, if you’re living together, it’s important to understand each other’s financial situation. If you share a joint bank account, mortgage or loan with your partner, you are financially associated with them, which could affect your ability to get credit.
2. What is a financial association? A financial association with someone means that your finances are connected in the eyes of credit reference agencies. You become financially associated with someone when you apply for a joint financial product, like a bank account or mortgage, with them. Your financial associations can affect how you are seen by lenders. If you’re financially linked to someone with a low credit score or a problematic credit history, it could have an impact on how easy it is for you to be accepted for credit.
3. What creates a financial association? Living at the same address as your partner does not automatically create a financial association between the two of you. Even getting married or being in a civil partnership with them doesn’t automatically create a financial association. The link is made when you take out a joint financial product together. If you and your partner set up a joint bank account to pay household bills or took out a joint mortgage to buy your home, your finances are linked. Your financial association with them will appear on your credit report. This means their financial behaviour could impact your likelihood of being accepted when you apply for credit.
4. How to know if you have a financial association You can see who you’re financially associated with by checking your credit report on ClearScore. If there are any names of financial associates listed on your report that are incorrect or no longer applicable, you can contact credit reference agencies to request that they remove them from your credit file. Your credit score will not be affected by any financial associations listed on your credit report. Your score is calculated using only information about how you individually use credit. See the factors that affect your credit score.
5. How to talk about money with your partner Just one in 10 people who took part in our survey said they speak to their partner about their finances once a month. The first step to talking about money and debt is always the hardest, especially if either of you feel uncomfortable about the shape of your finances. But if you can start talking about it on a regular basis, you’ll soon get over any awkwardness.
Here are our top tips to see you on your way to discussing your finances.
Make it normal
Make money part of your everyday conversations and it will quickly become normal and stress-free. If you put off talking about money until you are faced with a big financial issue, your conversation could become emotionally charged, and lead to a breakdown in communication. If the two of you have never talked about money before, try opening the conversation by asking your partner whether their family talked about money when they were growing up.
Go slowly
Talking about everything, from budgeting to how you want to approach paying off debts, in one go can make the conversation unnecessarily stressful. Don’t try to tackle everything at once or you might feel overwhelmed and be put off talking about money again in the future. Start off slowly by talking about your credit scores and any small purchases you’re saving up for.
Work together
To get on the same page with your partner when it comes to managing money, try sharing a joint money or savings goal. Whether it’s a holiday, a car or deposit for your first home, having a joint goal will make it more normal to discuss managing your finances regularly, and will get you both feeling excited about it.
Keep going Once you’ve got used to talking about your finances, setting up a monthly date night to ‘talk money’ is a great way to keep the conversation going. You can use this as a safe space to talk openly in a constructive way. Take turns to speak and listen to one another, and be ready to compromise. You can draw up a plan together that you can revisit at your next date night. If you can do this monthly, it can help to keep your finances on track, save yourselves money and improve your credit scores.
6. Some questions you might decide to ask your partner
Do you think we could be managing our money better?
What are the things you think we could spend less on?
Are you feeling worried about money at the moment?
What are our financial goals?
Do you think we’re on track to achieve our goals?