What You Need To Know About Money Before Entering a Committed Relationship
Couples may not discuss the issue of money while dating but it is certainly something that you must talk about openly before entering a committed relationship along
Along with infidelity and lack of communication, conflicts around the issue of money are one of the top three reasons couples separate, which is unfortunate, considering there is so much wealth around us.
Whether you want to admit it or not, money impacts most aspects of our lives — including our marriages. However, personal finance is rarely an issue couples discuss while dating or during their marriage.
Sarah And Ethan
Sarah and Ethan were on the extreme sides of the spending/saving spectrum. She came from a financially secure home, whereas his family worked hard to make ends meet. Ethan was ambitious. He owned four condominiums.
They all had large mortgages owing on them. Sarah was against debt. Even debt on appreciating assets made her uneasy. She told him he needed to sell the condominiums before she would marry him. She was uncomfortable with that level of debt. Unfortunately, this was at the time of a real estate market crash.
Let’s Talk Money
Money is a highly emotional subject: connected with feelings of safety and security. The topic of money can be a catalyst for conflict because of differing or competing goals and values, along with power and control. It’s an incompatibility in their approach to money that creates the problem.
Money & Marriage. What You Need to Know
Money touches many aspects of our lives. Bring two people, each with a different approach to personal finance, and there will be some conflict.
Your Financial Blueprint. When Opposites Attract
Each of us has a distinct financial blueprint, which comprises our beliefs around money, our experience with money, and our pers, personality type. The qualities you were attracted to in each other may differ from what you possess. It is not uncommon for opposites to be attracted to each other.
You may be attracted to a bold, risk-taking potential partner because they complement your conservative approach to life. Or, a driven personality may be attractive compared to your laid-back attitude to things.
However, these different personality types also exist regarding how people manage their money. High risk-taking ways may mean he might be more aggressive with his investments. Will you be willing to see him manage the family finances? Many women still defer major financial decisions to their husbands.
How to Manage Your Money in Your Marriage
Issues involving money within a marriage go beyond your differences in how you roll the toilet paper or squeeze the toothpaste.
Respect your differences.
● You come from different backgrounds. Discuss what money means to you — this will shed light on your relationship with money. How did your parents manage their finances? Were they generous, cautious, prudent, or just lived for today?
● How do you feel about debt? People have different risk tolerance levels, but some are more comfortable carrying debt than others. Some are so averse to any debt that they may not want to buy a house until they have a down payment.
● Talk about your past experiences with money. Do you share similar values? How a person handles their finances says a lot about what they value.
Decide how you will manage your finances as a couple.
● Discuss whether you want to combine your financial resources or keep things separate. Do you want joint accounts?
● How will you share the costs of running a home? Create a budget together.
● Unless you decide to keep your finances completely separate, disclosing your debts, assets, and financial obligations would be honest. It is one way to get real!
● What amount of debt will you be bringing into the marriage? Maybe one of you has a large student debt owing. How will you deal with it?
● See a financial advisor you both like. Have her prepare a written financial plan with your goals in mind.
● Discuss the control issue with your partner — how much control each person feels they need in this area. How much do you think you must tell each other before purchasing?
● Decide how you will deal with money conflicts.
● Discuss your goals — individually and as a couple. Prioritize those goals.
● Do you want children before you can afford a home?
Bringing It All Together
Like everything else in any partnership, open communication is imperative! For example, does your spouse know how much debt you have? Commit to getting good with money — help each other become financially savvy.
Take an interest in personal finance together. Even if you keep your finances separate, as long as you are a couple, one person’s financial decisions will invariably affect the other person’s life.