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Love and Money - Topics Every Couple Should Discuss

When a couple decides to get married or live together under a joint financial arrangement, there are quite a number of financial subjects that should be dicussed.

Couples often mistakenly assume they learned all they need to know about their partner through their courtship, but soon learn differently when they move in together. Talking honestly about those subjects will help a couple understand where they are compatible, compromises that must be made, the type of expenses they can expect, and will allow them a chance to resolve issues before they become a problem.

Many couples embark on their journey without knowing each other's financial habits, and the reasons for the way their partner handles money. They just want to see the romantic side of their relationship, and assume they'll deal with the money side of a relationship when a problem arises. But that's exactly the mindset that paves the way for misunderstandings, and feelings of resentment or even betrayal.

Prepare for the business side of your relationship, and understand each other before money matters become a problem, instead of just "winging it." A number of topics should be covered when the two of you decide to make that commitment to each other:

You should both know how much income you each bring to the partnership.
This isn't something you would normally volunteer in a new relationship, but it's important for both to know the joint income in a trusting long-term relationship. Without this vital piece of financial information, it will be difficult for both to have a realistic expectation of your likely lifestyle once you begin to live together.

Many like to impress their new loves by driving a nice car, wearing fancy clothes, and wining-and-dining at the best restaurants. It's dangerous to assume that you can continue the extravagance, unless you both have the income to support it. You may find out your sweetheart spent his last dollar every paycheck to win you over. That may be alright during the courtship phase, but you should both know what kind of life to expect once you've settled down to reality.

You should both be aware of any financial commitments either of you may have.
Your partner should know about your financial obligations, whether it's child-support payments, back-taxes owed to the IRS, or large medical bills from the past. You should also both be aware of the other's current debts, such as for car payments, credit cards, and student loans.

It's important for you both to give a detailed report about your current expenses. Budgeting is neccesary for successful financial planning, and you can only budget if you have accurately stated your income and expenses.

You should both be aware of the other's credit standing.
Your credit history will have a direct impact on your ability get credit in the future, which is something that couples often do together. One partner may have handled their debts immaculately, while the other let their credit go to shame.

It would only be fair to let your partner know about credit concerns that may affect your ability to jointly buy a home or car. You can begin to fix those credit problems, together, when you both know about them.

What are your individual and joint financial goals, both long and short term?
What's important to you? Paying off debts? Investing for retirement? Owning status symbols? Priorities can be very different between two people in a relationship. Do you want to buy a house in the near future? Will you be okay with the first house you buy, or will you want to move up to your dream home someday? How much money do you have to make to be happy? Do you both picture your financial futures the same way?

Some of those goals will be compatible, but some may require compromise. Understanding what's important to your partner will help you reach a common ground, as well as enlighten you to your differences.

What are your entertainment needs?
This includes how often, as well as how much you like to spend, on things like going out, vacations, and toys you want to own. One may prefer to eat home-cooked meals and save on going out to dinner. The other may dislike cooking and cleaning, and feels they deserve to go out at least once a week.

Or, one may like to take inexpensive vacations by visiting relatives or going camping and fishing, but the other expects to cruise to a tropical paradise every year. One may choose low-cost activities like tennis or gardening, while the other gets their excitement from routine sky-diving and collecting antique cars. One partner may feel resentment for not being able to do what they like, or the other may feel resentment about their partner's extravagent activities.

What are your long-term career goals?
It's not smart to assume that you or your partner will want to always do the same type of work that you both do now. Will either of you want to go back to school someday for a career change? Or does one of you wish to someday quit working the nine-to-five and start your own business?

Are you both willing to accept the possibility of temporary financial hardship due to a change in your current work routine? It's better to tell your partner now about your plans, rather than springing it on them when you have bills to pay and kids to feed.

How much importance do you each put on buying material things, or on saving for your futures?
Will it become an issue if one likes to spend while the other likes to save? That's one of the biggest money problems that couples have, differences in spending and saving habits.

Both should be honest before you make that commitment. You may find you have to compromise, or you may realize the difference is more than you can handle.

Will you keep separate or joint accounts, and who will be responsible for the monthly bill paying?
One person may be more organized, less forgetful, or just pays more attention to detail than the other. If all the bills are paid from a joint account, it usually works better and causes less confusion if one person takes responsibility for making the payments.

Or, you may choose to keep your accounts separate, allowing each person takes reponsibility for certain expenses. Another option would be a joint account for household expenses, and separate accounts for personal expenses. Do whatever works for you as a couple, and make adjustments to your system if you find it's not working. Talk about it now to avoid later confusion about who pays for what.

Who will be responsible for the final decision about particular money matters?
You may be a couple and strive to make decisions together, but there will be times when you just can't agree on a purchase or investment. Some may feel that whoever makes the most money should make the decisions, but that's not always the best answer. It's not about who wears the pants in the family; it's about who is better able to make financial decisions.

Does one of you have more knowledge and experience with investments? Does one of you have a knack for finding the best deals? Is one of you better able to keep hold of the cash in their wallet while the other forgets what they spent all their money on? One partner doesn't have to make the final decision on all the money matters, but each should utilize their strengths and abilities to benefit the both of you.

Talking about money may not always be the most comfortable thing to do with the one you love, but it's important. You can avoid the potential conflicts that couples typically deal with over money issues. Understanding each other, setting guidelines, and communicating your goals will help you achieve your life's dreams, as a couple.
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Wednesday, 12 August 2020

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