6 Green Financial Flags (And 2 Neutral Ones)
Have you ever read a story about a husband that finds out his wife was hiding thousands of dollars of debt from him?
What about a wife that finds out her husband lost their entire life savings in some risky investment scheme?
These are big red flags.
We’ve all heard of red flags. They’re the little signals that go off in your brain telling you something is wrong. But we almost never talk about green flags - the signs that you are doing something right.
So, if you have a partner, or think you will some day, look for these 6 green flags to know you’re doing something right.
6 green flags
1. You have open conversations about money, using real numbers for what you can afford.
For years, my husband and I had vague conversations about money. We said things like:
“Wow, groceries were expensive this month”
“Turn off the lights, I’m not made of money!”
But once we started having scheduled conversations to discuss real numbers we began having the most intimate conversations of our relationship. Suddenly it wasn’t “I’d love to go to Italy with you someday”, it was “Let’s save $6,000 and spend a week in Yellowstone next summer”.
Having open conversations with your partner is great, but using real numbers is essential. Be specific - how much money can you actually spend on a monthly car payment? What is the dollar amount in your emergency savings account?
Having conversations with your partner about where you stand financially, both individually and as a couple, is the most important green flag.
Not sure how to start having open conversations with your partner about money? Check out my post: Money Dates with your partner.
2. You trust your partner to spend and save wisely.
Trust is an important part of any relationship, but especially when it comes to money. Do you trust your partner to walk into Target (or Home Depot, or GameStop, or Bath and Body Works), and spend a reasonable amount of money? What amount do you consider “reasonable”?
In our first year of marriage, I constantly judged my husband’s discretionary purchases as I watched him order things online for $25, $50, $100 or more. But I realized the root of the problem was that we didn’t have any savings goals together and I felt like it was on my shoulders to be the responsible one.
After we sat down and decided how much money we needed to save every month, and how much each of us would contribute, I no longer cared how my husband spent his discretionary money, because I trusted him to contribute to our joint savings goals first.
3. You’re excited to show your partner a new purchase.
When I come home from the garden center, I can’t wait to show my husband my beautiful new plant baby. Buying a new plant is my favorite way to spend money, and I love sharing that experience with my husband.
When was the last time you walked in the door, simply bursting to show your new purchase to your partner?
Partners that hide purchases usually do so because they feel guilty or ashamed. Maybe you walked into Target to buy toilet cleaner, and walked out with makeup, some clothes for the kids, a new lamp for the living room and Taylor Swift’s new vinyl album. We all make impulse purchases sometimes, but hiding purchases from your partner is usually a sign of a deeper issue.
4. You talk about the future AND how to pay for it.
Making plans for the future is an important indicator that both partners take the relationship seriously. While talking about kids and a home is an important conversation, it’s basically meaningless until you factor in money. What if you both agree you want to live in New York City, but you never talk about how you can afford it? What if you both agree that you want five children, but you work minimum wage jobs and can’t feed five mouths?
I would never want someone to live a smaller life, but I do think it’s important to consider how you will pay for your future. If you and your partner want to quit your jobs and take a 6 month sabbatical in Thailand, what can you do today to pay for it? Can you get a second job? Take on a side gig? Ask for a raise? Sell your car? Remember: a goal without a plan is just a wish.
5. You pay your credit card off in full every month (or have a specific plan in place to pay off your credit card debt).
Did you know Americans have over $1 trillion in credit card debt, with the average American having around $6,000 of credit card debt? If you are one of these Americans, I can’t fault you, the system is predatory and designed to keep you paying for as long as possible. That being said, allowing yourself to get further and further into debt without an escape plan, or hiding credit card debt from your partner, is a very bad idea.
The best solution is to pay off your credit card in full every month. If you can’t do that, at least pay the minimum and work with your partner to make a plan for how to pay off your credit card debt.
Your partner doesn’t necessarily need to contribute to your debt payments (in fact, I think it's best if you pay it yourself - you’ve got this!) but including your partner in the process can build trust and help you get the support you need when times get tough.
The ideal green flag in this category is to be honest with your partner about how much debt you have. You may feel embarrassed or ashamed of your spending habits or how you got into debt, but sharing your debt numbers with your partner shows them that you trust them, and allows them to help you make a plan of escape.
6. You share your credit score, bank account balance, and debt numbers with your partner.
If you’ve gotten anything from this article so far, I hope it’s that you need real numbers! If you and your partner want to buy a house, you need to know their credit score. If you’re going to co-sign anything with your partner, you need to know that they have enough income and savings to help pay for it.
Trust your partner, share your numbers, and wave your green flag proudly.
2 Neutral Flags
The following I have selected as “neutral” flags, mainly because different people have different opinions. You and your partner should have a serious conversation about what you both want. As long as you both agree, there are no wrong answers.
1. Having a joint account
Lots of advice says that as soon as you are married, you should combine finances. I don’t agree. My entire life, I watched my parents successfully divide household expenses with separate accounts.
Personally, my husband and I have joint savings accounts - emergency savings, vacation savings and down-payment for a house - and we keep the rest of our expenses separate. We equitably (not equally!) divide our joint expenses, each taking charge of different household expenses.
Have a conversation with your partner so you’re both on the same page. Do you want to have a joint checking account that you both use for expenses? A joint savings account for emergencies? Keep everything separate? It’s up to you both to discuss and come to an agreement that feels fair for both partners.
2. Talking over purchases with your partner before buying
Another important conversation to have with your partner is - how much can we spend without running it by the other person first?
Again, this depends on you and your partner. In my own relationship, I will buy a $200 pair of running shoes without talking to my husband first, but I wouldn’t buy a car. Any purchase over a couple hundred dollars, we discuss it first and make sure we’ve 1) saved enough, 2) it’s the right time for that purchase, 3) this is something we truly want and it isn’t an impulse buy.
How much or how little you spend without discussing with your partner first is between the two of you. Some couples say anything over $50 should be discussed first, while other couples are fine spending thousands of dollars without the other partner’s input. Again, it depends on your relationship. The only rule is - both partners must agree.
Final Thoughts
Money affects every aspect of our lives, including our relationships. If you and your partner want to build a stable, loving, long-lasting relationship, you have to talk about money to get there. Maybe you’re not there quite yet (that’s ok!) but choose a few of the green flags from above and start talking about them with your partner. Show them that you pay off your credit card every month, talk with them about future plans that you want to do together and use real money numbers. You’ll find that your conversations are deeper and more meaningful than ever before.
Action Items:
How many of the green flags do you and your partner have?
Schedule a Money Date with your partner. Use real numbers.
Talk about future plans with your partner and start deciding how much you need to save to get there.
Your life may not be perfect, but it is imperfectly yours. The only way to live it is your way.
