Gold diggers aside, if you ask someone to describe their ideal mate, money doesn’t often come up. A mixture of looks and personality is what attracts us to our mate. I don’t think I’ve ever heard someone say, “that girl really has her finances in line, I’m going to get her number.” Or how about, “wow that guy really knows how to budget! I hope he asks me out.” It sounds ridiculous. Of course this isn’t something that initially attracts you to another person. But it should definitely be on your list when it comes to finding someone to spend the rest of your life with.
Think about it. Money is one of the top causes of relationship troubles and divorce. If one is a saver and the other a spender, there’s going to be trouble down the road.
Lucking Into a Good Money Relationship
I met my wife in college. At the time, money wasn’t much of an issue. We didn’t have any like everyone else. As a result, there were no tough money decisions to make. We got engaged a few months after she graduated and never did have a talk about money. We both found good jobs right after graduation that paid a decent salary. I knew how much she made and vice versa, but there was never any serious conversation about views on money.
Fast forward to today, and we’re very lucky that we both have similar views when it comes to money. Saving for retirement has been important to both of us since day one. Neither one of us is a big shopper, but we still spend money on things that we’re passionate about. For her that’s running, and for me that’s golf. When I started talking to her about achieving early financial independence, she was all for it.
Sure there have been some hiccups along the way. When we were first married, I was still used to buying what I wanted without having to discuss it with anyone. At the time, my wife really wanted a cat. Having developed allergies to cats, this sounded like a terrible idea to me. But she was persistent. Not wanting to get allergy shots from the doctor, I started looking at air purifiers that remove pet dander and allergens from the air. Surely this would solve all problems, right? I ended up buying a nice unit for around $400 (Yes, I would like to punch myself in the face 10 years ago for buying a $400 air purifier). At the time I thought it was a reasonable purchase. She wanted a cat. I was allergic to cats. Buy a $400 air purifier, problem solved right? Not so much. Needless to say, she wasn’t too happy that I spent $400 without talking to her. And that’s when we had the “how much can I spend without telling you first” talk.
Not Everyone Is So Lucky
We’re very fortunate that our views on money are pretty much in line with one another. Not everyone has such luck though. Numerous surveys point to money as the #1 cause of stress in a relationship. According to a recent survey by SunTrust, disagreements over money is the cause of 22% of all divorces. Clearly it’s an important topic that should not be left up to chance.
The later you are in life, the more important it is to talk about money in a relationship. When we got engaged, I was 7 months out of college and my wife was less than 3 months out. We had spent so little time living on our own with our new jobs that we didn’t have much time to develop our own spending and savings habits. Lucky us. This made it much easier once we were married and had joint finances.
Those who have been living on their own for much longer will have a more difficult time merging all of their personal finance views with someone else. Think about if you’ve been saving 25% of your paycheck for 10 years and your future spouse has been spending all their money for 10 years. You’re going to have a much more difficult time merging your money habits than if you had only established them for a few months. This makes it even more important to discuss views on money before saying I do.
Get on the Same Page with Money
Don’t leave your future to chance by waiting until it’s too late to talk about money. Being young and naive like we were is not a good excuse. You may not end up as lucky as us. Make sure you and your spouse discuss these 5 money issues before taking the plunge.
- Debt obligations. Credit card debt, student loans, car loans. Lay it all out on the table. Your future spouse needs to know all your obligations. No surprises!
- Credit history. Share your credit report. If you have some dings on your credit report because of some past mishaps, you need to disclose these to your significant other. You don’t want to wait until filling out a joint application for a mortgage to talk about your less than stellar credit score.
- Share your money philosophy. Are you a spender or a saver? If you received a $5,000 bonus at work, what would you do with it? Pay off debt? Invest? Spend it? This is the most important area to be on the same page as your spouse. If you don’t agree on spending and saving habits, you’re in for a rough ride ahead.
- Money goals. When do you want to retire? What does retirement look like for you? If you love your work and see yourself doing it through your sixties and possibly beyond, your views on accumulating wealth may differ from your spouse who hates their job and wants to retire as soon as possible.
- The breadwinner. Will both of you work throughout your marriage, or will one of you stay home when kids come about? Is it feasible to live on one salary if one of you wants to be a stay at home parent? Another key issue to discuss is how you feel if you make way more money than your spouse or vice versa.
Coming to an agreement on these issues will put you on the right track to a long and healthy marriage.
Readers, when do you first talk about money in a relationship? Share your experiences discussing money with a significant other.