In honor of Valentine’s Day, I want to talk to you about love and money. I have known many couples who were in love until they found out about the other person’s money habits.
Your money incompatibility doesn’t have to end the relationship. If this is the one, you can make it work. You just have to ask the right questions.
This is what you need to know about each other:
- Financial Issues: Income, assets, expenses, debt and credit. Understand what is going on with each other’s finances. Are there debts and back taxes? Are the savings accounts available to use jointly? Should some of the assets be merged or sold off, and if so which ones?
- Money Type: Are you a Spender or a Saver? If you know, you can use your joint goals to meet in the middle on common ground. If you’re habits are extreme, you might want to keep separate bank accounts. That way, one of you won’t feel pinched while the other is in a constant state of sticker shock.
- Long Term Goals: What do you want from life? Do you want to be married or single? Do you want to be a homeowner or rent for the rest of your lives? Do you want to have children? These questions need to be answered so you can save towards the same goals.
- CFO (Chief Financial Officer): Who is in charge of the money? Is it one of you or both? Will you split the responsibilities by category or do everything jointly? Knowing will keep “that’s mine” arguments to a limit.
With this information, you can decide if you want to keep your finances together or separate. Joining your bank accounts together with someone who has ignored debt or back taxes may mean your money is at risk (even if it’s not your obligation), and in the end, puts you both in the same deep hole with no way out.
Finances can be the doom of relationships. Being informed and making proactive choices is the best way to make the relationship work.