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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.
This week’s episode starts with a discussion of the GameStop frenzy and what we learned from it.
Then we pivot to this week’s question, from Kim in the Bay Area, who writes, “I am 26 and just moved in with my boyfriend at the beginning of the pandemic. We live in the Bay Area where the cost of living is not cheap. We were both lucky enough to have stable jobs and a steady income during the pandemic. But we are trying to get a better handle on our budgeting and begin planning for the future. My first question is, how do you start discussing finances with your partner? Are there any strategies or tools you recommend? We sat down multiple times to try to figure out our finances but get overwhelmed every time and don't really know where to start. What are some topics we should make sure to cover in these conversations? My second question is how do couples begin to save and budget for both a wedding and a house? My partner and I would like to eventually have a wedding and also buy a home. But these two goals feel so expensive and unattainable. Our families are not in a place where they can help us pay for these things. So how do we begin to financially prepare for these big life events?”
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When you’re not in the habit of discussing money with a partner, it can be challenging to get started, as Kim has experienced. But it is necessary. Money conversations can , but with practice, you and your partner will grow more comfortable with it. You can start with something as simple as groceries — who shops, who pays, who cooks — and whether expenses should be split 50/50 or divided according to income. There aren’t right or wrong answers here, but it’s important to be clear and for both parties to understand.
You also don’t have to decide every single thing at once. It’s really overwhelming if you’re trying to figure out a day-to-day budget, plus savings, insurance and more in one giant summit. You can even put on your calendar and break it down into the topic you’ll discuss — rent and utilities this week, saving for a new couch next week. Try making it manageable and small.
If you have a or a down payment, calculate the big number that is your goal, and then work backwards to figure out how much you need to save. If the amount is not realistic, you can either put off your goal date or scale down your goal amount to make your goal achievable. And check in often to monitor your progress, make sure you’re still on the same page or tweak your goals as your needs and circumstances change.
Start with the basics. When you're first managing money with a partner, have conversations about where your money is going now, then move on to your goals and how to achieve them.
Fight the overwhelm. Break bigger tasks down into smaller ones.
Work backward. Figure out how much you need for a goal and by when, then work backward to figure out how much you need to save each month. Adjust as necessary to accommodate multiple goals.
Have a money question? Text or call us at 901-730-6373. Or you can email us at . To hear previous episodes, return to the