Sharing financial duties and planning together are good ways to keep a relationship healthy. Your partner’s money habits may be different from yours, but the key to understanding lies in communication.
Whether you’re married, engaged, or in a relationship, there’s a need to bring up the topic of money at some point. Here are tips from a financial planner (married for over 30 years) on how to make those money talks go smoothly.
Planning for financial harmony
By Celia Brugge, Financial planner, MBA
When you’re thinking of getting married, or joining households, there are a thousand things to plan and dream about. You know money is important, but it’s so easy to put aside talking about that until later.
Still, the time to set the stage for a lifetime of financial harmony is before you’re married. Here are specific money conversations you should have–and actions you should take–before and after you say “I do.”
1) Be sure you’re financially compatible. Talk about your most memorable childhood experiences with money. What were your family’s attitudes toward money and spending? Typically one partner is more detail-oriented, the other more of a free spirit. Maybe one considers every purchase carefully, while the other tends to buy on impulse.
Learn these differences, and discuss them openly.
2) Exchange credit reports. Go to www.annualcreditreport.com to get copies of your credit reports to share with one another. This means there will be no secrets regarding credit history that may affect big purchases you make in the near future. Be aware that one partner’s credit report is likely to be better than the others.
3) Decide together what your financial goals will be. Maybe you want to buy a house or start a business. Look at both short-term and longer-term goals and decide how you’ll get there. If you need to take care of debt or a problem credit history, work on those problem areas first.
4) Decide how to blend your finances. Many couples prefer to keep their finances separate, and of course there can be good reasons for doing this. In general, though, I think it’s better for the marriage to blend at least a part of your finances. For example, you may have a joint checking account for paying household expenses, while you each keep separate checking accounts for smaller personal expenses.
5) Make a budget together. One spouse is usually more interested in managing the finances, but it’s very important at least to review your spending together so you’ll be on the same page. If possible, take turns being in charge of budgeting and paying the bills.
6) Keep talking about money. Once you’re married, plan to set aside a regular time, even if it’s only 20 minutes a month, to go over your finances–calmly. Make it fun if possible-perhaps go out to dinner after wards.
7) Don’t be afraid to seek help. It’s often said that financial problems are the leading cause of divorce, but this is not really accurate. Financial problems usually reveal deeper issues (of respect and commitment, for example). Getting professional help for marriage or financial problems should be as natural as going to the doctor when you’re not feeling well. And premarital counseling that includes financial counseling is one way to help ensure that you’ll be off to a great start in your marriage.
Celia Brugge is the principal of Dogwood Financial Planning, a fee-only firm in Memphis, Tennessee. She earned her Master of Business Administration at the University of Tennessee, Knoxville, and a certificate in financial planning from Christian Brothers University. She is a member of the Garrett Planning Network, an organization of more than 300 independent fee-only financial planners. Celia has been married to her husband Mike for 30 years.
Visit her website at DogwoodFinancialPlanning.com