The checkbook is often the primary reason for fights and failed relationships! Yet, money is often the least discussed topic prior to couples committing.Whether you have a lot or a little, one thing is universal to all: some amount of agreement on money matters is crucial for the survival of a healthy relationship.
Discussions about money are often delayed or never had until after a commitment. Most of us grew up with the belief that discussing money is not polite and should remain private. Therefore, warning signs of money troubles are often ignored especially if everything else seems right. This is especially true if the person is overspending in the name of love e.g. gifts, restaurants, trips, outfits, etc…since you are not privy to the entire financial picture, it is easy to believe that the person is financially responsible and generous.
In the twenty-first century, if you are a woman, the days of being dependent on a man’s money to make you happy are long gone (as they should be). It has become more important to be clear about your own financial goals and work toward them. Having clarity about your financial status is extremely crucial to your well being. Being in good financial health is a part of being your best self. Knowing where you stand is necessary for you to maintain or begin your journey toward financial health.
While it is easy to hide from your financial past, and pretend that early unwise credit decisions can be forgotten, it is important to know that your financial history can and often does show up at the most inopportune time, like when you want to make a major purchase such as a car, condo, home etc. Additionally, more and more employers are using credit scores to aid in hiring decisions.
You can change patterns that are hurting your credit score (e.g. late or missed payments, overspending, growing debt etc). It is urgent that you are clear about your financial situation and attitudes before you commit so that you can convey them to potential mates and find out if your fiscal goals are well-matched .
If you want to share your lives together, sharing your finances is a central part of it. Commitment is not just about romance, it is also about finances. As unromantic as it is, you may not want to commit to someone who is careless with or uninterested in their credit status, particularly if they have not demonstrated efforts to correct theproblem.
Deep is often a good indicator of a person’s attitude about finances. It is often not until after the relationship unfolds and a commitment made that the true nature of the problem presents itself. No matter how well other aspects of a relationship work, divergent attitudes about money matters are often a deal breaker or at the very least the source of much heartache and distress in a relationship. It is best to have these conversations as early as possible so that you can attempt to prevent damaged hearts and damaged credit.
If your potential mate has chronic money management problems which have resulted in unfathomable debts, you can anticipate that it will impact you for the life of the relationship and beyond. As you know, your mate’s low credit rating, can prevent you from receiving a loan or a low interest rate if you apply jointly, thus impacting your standard of living.
We have all heard (or lived) the stories: two people deeply in love with one another, compatible in every way, only to have their relationship fall apart because of financial problems. This is usually a lamentable ending to what may otherwise have been something rewarding and beautiful. The distress, anxiety, and desperation you experience when dealing with money problems in a relationship is overwhelming, because you are left with the thought: I love my partner, but he/she does not know how to handle money. Is this relationship really worth the pain, suffering and low standard of living?
Creating a budget together can help to identify spending styles and to help you to determine if you are financially compatible. Both of you need to be involved with planning the budget. Separating the money and splitting the bills is unwise because ultimately, your life style will be determined by the person with the least financial savvy due to the impact of their spending pattern.
It is of utmost importance to keep in mind that both parties must be open about their finances, keeping no secrets. Communicating with openness and honesty is the key to eliminating money troubles, and is the only way that trust will be built and maintained. We all know that money is important. The freedom of being able to buy a cup of coffee in the morning or other small items without thinking twice is something you may never have appreciated until you are faced with financial troubles. Things are further compounded when you feel that your significant other plays a role in these troubles. If you ask yourself “does my partner have anything to do with my financial difficulties?” When the answer is yes, it often leads to resentments, hostility and failed relationships even if the couple is otherwise compatible.
The Money Talk: Words of Warning:
This depth of conversation is neither necessary or appropriate for casual relationships, but if you are in a long term relationship or considering one, an assessment of each others financial status is crucial. The questions below are for both you and your mate to ask and answer. It is imperative that you both know what you are in or signing up for.
- My credit score is? Rather than asking this question exchanging credit reports would be best.
- How much do I owe, and to whom/what?
- I have _____credit cards
- Are my bills paid on time?
Do I have enough money to pay them on time?
- How much do I make?
- Have I ever filed for bankruptcy?
- Do I have issues with:
late payments, unpaid/defaulted loans
- Do I have issues with
Income taxes—unfiled or outstanding taxes
Child support- current or outstanding
or other unresolved financial issues; ie
school loans, credit cards, store credit, parking tickets, phone, electric, gas bills, unpaid rent on prior apartment etc
- Do I have any savings? How much?
- Should we combine our savings or keep them separate?
- Do I have any investments? If so what are they and how much?
- My financial goals are______?
- How I plan to achieve them?
- I have health Insurance/Life insurance, car insurance?
If not, why not?
- I am/ am not financially content right now?
If not, this is how I plan to get there______
- How will we divide (or combine) bill-paying responsibilities?
- Should we keep our bank accounts separate, or create a joint account?
- Will we be making any large purchases together in the future? (House, car, etc)
- How will we make financial household decisions?
- I am a spender or a saver? What are your thoughts about that?
- (If a child from a previous partner is involved) How will finances for him/her be handled?
- Do you have aging parents or other family that you have or anticipate having responsibility for- If so, what role will you play?
- How will we handle crisis situations when we don’t have any money?
What will we do? Who would we turn to?
- What if one of us gets laid off? How will we handle the finances?
While this is an exhaustive list and process, all of these items will impact your financial health and the health of the relationship. It is necessary that you know what to expect financially from one another and agree to accept it. If your partner is uninterested or refuses you can anticipate that financial distress will continue to plague your life. Healthy relationships cannot survive amidst hostile mismatched money mates.
Financial discussions are necessary throughout the life of a healthy relationship, so that you can adjust your budget and goals as needed, thus making it possible for your love to last.
Special Thanks To My Research Assistant: Aisha Qadeer