When matters of the heart meet with matters of finance, the path isn’t always adorned with rose petals and chocolates. In fact, arguments about money are one of the leading causes of failed relationships and marriages.
Combining debts and income under one umbrella might work for one couple, while keeping everything separate and distinct might work for others. Regardless of which option you may choose when starting out in your relationship, the secret to successful finances in your relationship is to communicate early and often.
Open Communication: Having the “money talk” at the beginning of a serious relationship can be a delicate dance. Personal and family history – like growing up financially strapped, or having gone through a divorce – can influence a person’s choices regarding money and finances. What may be comfortable savings goals or money management decisions for one may be a difficult choice for another. And during “the talk”, there could even be newly discovered financial deal-breakers that would indicate that a relationship may not endure.
Communicating common goals and values, rather than dollar signs, is a way to find a direction both can agree upon. How to tackle debt, manage money, and create emergency and retirement savings are all excellent topics that offer valuable insight on how partners see money and the role it plays in his or her life. Additionally, having a shared approach when it comes to finances helps couples take ownership of their responsibilities. For example, one person can handle the bills while the other manages savings and retirement accounts, and each keeps the other well-informed.
Set Up Financial Relationships That Work for Everyone: There are various ways to set up accounts so they are mutually beneficial to both partners.
A more traditional approach may be to establish one account for household expenses. This option works great for couples where one person makes more money than the other does – for example, if one person is a stay-at-home parent or a student. It also works if both people work and one income is set aside for a shared goal, such as a down payment for a home or retirement; or if the couple has similar incomes and limited assets. The key is to make sure both partners are comfortable with this arrangement so that there’s no feelings of hostility or deficiency.
Some couples may simply be more comfortable keeping their assets, debts and accounts completely separate. With this approach, household responsibilities are divided between the two.
There’s also ways to split the difference – having a joint checking account to pay household expenses and a joint savings account to reach shared goals; yet each partner has their own accounts so they can manage their money as they see fit and at their own discretion.
Many couples with successful financial relationships also set an expense limit on purchases. If a purchase hits a certain amount – say, $50, $250 or $500 – the other person has to be consulted before the purchase is made.
Keep Talking to Each Other: As life continues on, it is just as important to keep talking to each other. Life changes, such as illness, unexpected windfalls, retirement, or children leaving the nest all merit an honest and straightforward financial conversation.
Finally, it’s always an option to have an impartial and knowledgeable third party in the room. Talking to your trusted financial advisor, like Nusenda Credit Union’s financial consultants, will help in the process of merging love and money. They can also help you with financial workshops and educational resources, budget and planning tools, and investment strategies. You can schedule an appointment through our online scheduling tool, by contacting us at 505-889-7755 (800-347-2838 outside the Albuquerque area), or come in to any of our branches for immediate service.