When you met your significant other, did you discuss both of your financial situations? Many of us don’t, but you’re better off in the long run if you air out your financial issues now rather than wait until a problem arises.
Statistics say that money issues are the number one reason why couples argue. Have you ever asked yourself what money means to you? If you’re about to enter a long-term relationship, or if money problems are looming in your marriage, it’s high time to air the issues and talk money, openly and honestly.
People attach very different meaning to money. Some equate it with power, success and control. Many see money as security or even as a proof of love. Some are constantly afraid of not having money. Feelings about money are deep and often the cause of misunderstandings.
In a new or established relationship, money issues need to be discussed with honesty and openness on a regular basis. To communicate with each other, you first need to know where you stand – not only in terms of what you have and seek, but to understand what money means to you.
As a single person, you’ve been used to making your financial decisions. Becoming a couple, you may be apprehensive about sharing your assets or even your financial information. Assuming your new partner is wealthier than you and offers to take care of you, does that make you happy or ill at ease?
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If your assets are more substantial than those of your partner, you may fear losing money, especially if you feel that the way he or she handles financial responsibilities is ill-advised. Whatever the circumstances, frank communication is the only basis to avoid pitfalls in relationships.
Establish guidelines together from the beginning and revise your plan when financial circumstances change. Be clear about who owns what, who spends what, who pays which bills and from which account. Foggy money plans lead to emotional collisions. If your partner ignores the rules, speak up soon and rectify the problem. If it happens repeatedly, recognize that you have a problem that may require professional help.
Know your financial picture
For new couples it is critical to understand each other’s financial picture before starting life together and co-mingling your funds:
- Exchange a list of your assets, your own monthly budget, your yearly income and your debts.
- Agree on your financial goals.
- Based on this information, establish the “together” budget.
- Do it early in the relationship, before the first calamity hits.
- When you work out the “together” budget, resolve numbers and discuss the feelings you have about the different money issues.
- Both of you should be comfortable with your final decisions before you document them to avoid misunderstandings.
- Some couples have a “his”, a “hers” and a common bank account. Others choose to have their own credit cards so they can decide how to use their discretionary money.
- Don’t forget savings for Christmas, birthdays and vacations.
- Try to save six months of living expenses in case of financial reversals. Make it part of your savings plan.
- Explore carefully how to invest the money you save.
- Decide who pays the bills.
- Discuss buying big money items such as a car together, and adjust your budget accordingly.
- If neither of you is financially savvy, get help from a financial counselor, your banker or a savvy friend before money issues over-whelm you.
Knowing about your money is the first step to financial security.
Jacqueline Brandwynne has worked in the health and beauty industry for more than 25 years.