As we think of the season of love, thoughts of candlelit dinners, romance and saying “I do” may pop into your head. When they do, it is wise to envision more than love, and mention a topic that often gets neglected: money. The topic of money may be an unromantic thought for some. But,but all things considered, it is what many couples fight about most often.
Big issues or small, money has an impact on all areas of a relationship. Examples range from balancing and overdrawing a checkbook, investments that have crashed, and out-of-control spending habits to overuse of credit and debit cards. These arguments are rarely about the money itself, but instead about power, control, security, beliefs, and communication.
So before you agree to “I do” and merge your finances, it is important to consider having The Money Talk.
My husband says, “This makes the hair on the back of my neck stand up.” And, in fact, many couples find it easier to discuss most all other topics, but delay covering their finances. Many people find it easier to talk about sex than money, regardless of their age. However, getting on the same page can prevent a lot of stress down the road; better to have “the talk” now rather than later.
Here are some questions which should open up the communication on finances whether you become a couple at 25 or 55.
- What is your credit score? It sounds rather unromantic, but a good place to start for an idea on how you handle your finances. Your credit score will indicate how well you handle borrowing (debt) from mortgage, credit cards, and car loans. The credit score will determine the financial building blocks and your access to credit and interest rates.
- Where are you going financially? As a couple you will map out what is important to you financially, and where you want to go. This could mean how much you save for a house, vacation, or retirement. Do you have other financial responsibilities, such as from a first marriage? For some, this question may revolve around how you handle debt or how much you are comfortable borrowing.
- What is your experience with money? What are your beliefs about money? Your family attitude towards money will shape how your attitudes are formed. Did your family hide money issues or “yell” about money? Were you taught to save or live day to day? Emotionally charged arguments about money arise because couples don’t always see money from the same perspective. Discussing this early on will help you understand each other’s financial habits and how you can find compromise on a middle ground further preventing arguments.
- Who handles which financial duty? Couples need to find a way to divide up these responsibilities and play to their strengths. One partner may balance the checkbook and pay the bills, while the other partner handles the investing and insurance. Unfortunately, what occurs with many couples is that one partner chooses to handle all the financial decisions and thus becomes a source of power and control over the other partner. You may also have a partner who completely ignores all the money matters. Neither situation is desirable. Both partners should be aware of what is happening with their finances, even if not involved with the daily activities. This will prevent surprises later on!
- How do you handle the checking accounts and credit cards? This question comes up a lot. Many couples find it easier to each have a checking account, with one being the household account. You may have a savings account for emergencies, vacations, and big purchases. Each partner can spend an agreed amount, say $250.00 without the approval of the other partner. Each of you should have a credit card in your own name to maintain a separate credit history.
When all is said and done, The Money Talk, like marriage, is about communication and compromise. You can live happily ever after, at least financially speaking.