Hashing out monetary matters may not make for romantic pillow talk, but a little financial planning can do a lot for your love life down the line. Here are a few pointers to help you stay smart when following your heart:
You must talk money before your relationship becomes serious—a person’s financial habits are an incredible insight into their values and ethics. That doesn’t mean a lousy credit rating is a reason to break up, but if you find that your new love interest doesn’t handle money responsibly, you have to question what else he/she isn’t going to be straight up about. If you’re the one with the issues, be honest about your shortcomings. A good relationship is one in which each party helps the other make better choices—and you and your beau might be able to help each other become smarter about money.
Meet in the Middle
whether you are newly engaged or suddenly find a long-term relationship challenged by a financial setback, support each other. Sulking in the corner does not help. Nor does dirty fighting
Blame won’t help your balance sheet. To address any money problem, you need to work together to come up with a strategy.
You might like to consider seeking advice from a financial planning firm.
Consider Yourselves Equals
who makes what can be irrelevant. Do you hear me, stay-at-home Mums/Dads? The size of your salary may not determine your role in the family finances. Respect each other as equal partners, with an equal say in money management.
Put It in Writing
I know there’s nothing sexy about legal forms. But ensuring that you have the correct documents in place to safeguard you and your assets is a must. A pre or Post nuptial agreement will clearly delineate what is solely yours, meaning you will be protected if you divorce/seperate. For those contemplating a second or third marriage/relationship, seek independent legal advice. One way to protect the assets you bring to the table—especially if you want them to go to your children—is to create a legal trust. That document will spell out what portion of your personal assets will pass to your children, rather than to your new partner. Keep in mind each relationship is different and legal advice will help both parties understand their rights.
Fools Rush In
Debts you had prior to marriage are yours alone—unless you actively merge them. When you wed, or move in together don’t automatically rush to combine everything. You can help each other out by chipping away at your loans without becoming officially responsible for each other’s past.
Divide and Conquer
Here’s how we suggest every cohabiting couple organize their cash flow: Create three accounts—one for you, one for your partner, and one joint fund. Once you’ve determined the total cost of your shared living expenses, both of you should contribute your portion of these costs to the joint account each month, based on your share of household income. (For example, if you make $60,000 and your partner makes $40,000, you’re responsible for 60 percent of household expenses.)
Whatever money doesn’t go toward these costs stays in each individual’s account, this is their play money to be used at their discretion.
Every woman also needs one credit card in her name only. If you break-up, become divorced or widowed, an individual credit history will enable you to get a loan ,rent an apartment and make day to day financial decisions with less pressure.
Ties That Bind
After you marry, or form a de-facto relationship every asset either of you acquires maybe jointly held. That’s why you both need to be in sync with your long-term financial goals, from paying off the mortgage to putting away for retirement. Ideally, you should talk about all this before you wed. If you don’t, you can end up deeply frustrated and financially spent. Discussing money with the person you hope to spend the rest of your life with doesn’t mean you don’t love them. It means you love and respect yourself & care about what your future looks like.
Don’t Hide Your Head in the Sand
A lot of women fall into the habit of letting their partner handle the money. If you are one of those women, that’s not your partner’s fault; it’s yours. Your partner may be doing a fabulous job with your money—that’s not the point. You need to understand the finances and weigh in on all decisions. The fact that women tend to live longer than men means they may need to rely on the money longer and will also find themselves managing it at some point. The longer you wait to engage, the bigger the surprises you may find down the line.