When it comes to love, so many of us are on a constant quest to find the “right person.” The right person is attractive and kind, shares just enough of our interests, gets along with our friends and family and makes us feel special. When we finally meet this person, we feel like we’re supposed to just know. They’re the one; it feels right.
But when choosing someone to potentially spend our lives with, so many of us ignore one crucial component: money.
Money has long been known to be a leading cause of stress in relationships — probably because, for so many couples, it’s a topic that’s off-limits. Maybe you’re insecure about your own financial situation, and talking it over with your partner would force you to deal with the reality of a serious situation. Perhaps you’ve only been dating for a few months, and you fear that bringing up such a “real” topic is going to put a damper on the good time you’re having. Or maybe you’ve just never even considered discussing finances with a partner and figured that everything would simply work itself out.
But financial compatibility will play a huge role in the success of your relationship. Money is going to impact any choices you and your partner decide to make, or not to make. Are you going to buy a house, have kids, retire early? Each of those things takes a considerable amount of financial planning, and if you are not on the same page or don’t share the same values when it comes to money, it’s going to cause problems down the road.
But let’s be clear: financial compatibility does not mean you need to go looking for a partner with the same financial standing as yourself — or that you need to kick someone to the curb because they don’t earn enough money. Rather, this kind of compatibility has much more to do with your respective attitudes towards and habits surrounding money.
A little consumer debt may be manageable, but if you found out your partner owed tens of thousands of dollars to credit card companies, would that be something you could stomach?
When It Comes to Money, Communication is Key
I asked Talaat and Tai Mcneely, the money-coaching couple behind His & Her Money, what they thought was the biggest challenge couples face when it comes to their finances. “I hate to say it, but everybody’s pretty much the same,” Talaat answered, laughing. “It’s usually a severe breakdown in communication. Whether that’s communication between each other, or communication with reality.” The subject of money is just like everything else in your relationship: it all comes down to knowing how to communicate.
Determining your financial compatibility can only start with one thing — a conversation. No matter at what stage you are in your relationship, it’s never too late to start discussing money. To get you started, these are the three conversations you need to (eventually, at least) be having.
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1. The “This Is What My Money Looks Like” Conversation
First things first: if you and your partner don’t know what your respective money situations are, you’ll have a nearly impossible time mapping out a plan for your financial future. The first thing you need to want to do is disclose where you each stand, financially.
It’s a process that Erin Lowry of Broke Millennial calls getting financially naked: “Sharing our numbers didn’t mean we suddenly swapped ATM pins and ran to get a joint bank account. Instead, it provided a foundation in which we could create hypothetical scenarios about how to handle money if we decided to get married (an important conversation to have after [several] years of dating).”
This conversation is where you go over all the basics: how much you earn (net income), how much you owe (student loans, credit cards, and other debt), and how much you spend and save (down to how intensely you budget, or whether you budget at all). Talaat Mcneely recommends starting the conversation with yourself, and keeping things casual: “You can use yourself as an example — maybe you just paid off a student loan or a bill for the month, so you might say, ‘Man I’ll be so glad when I’m done with these student loans...Do you have student loans? I’ve got X amount, how about you?’ That’s a way for you to get an understanding, or at least a glimpse into what you may be getting yourself into if the relationship progresses.”
Now is also the time to take note of anything you might be concerned about with your partner’s financial situation, such as debt. Lowry made sure to mention this when she had the all-important conversation with her partner: “Student loan debt is not a deal breaker to me, but credit card debt is a red flag and major cause for concern.” A little consumer debt may be manageable, but if you found out your partner owed tens of thousands of dollars to credit card companies, would that be something you could stomach?
And remember that the sharing goes both ways — whatever you want to learn about your partner, they should get to learn the same about you. If you’ve yourself accrued a significant amount of debt, you owe it to them to be honest about it. It’s much easier to tell them early on how much you owe and figure out a plan of attack than wait until your debt has skyrocketed to a seemingly unmanageable amount. Neither of you needs to be perfect, but you do need to be on the same page — and be open to working through current or future money problems together.
2. The “What Are Our Money Goals” Conversation
This is where you and your partner will go in-depth not just about how your money looks now, but what your plan for it looks like currently, and whether or not your financial habits and goals are compatible with one another.
Say you’ve always dreamed about owning a home, and you want to do it sooner rather than later. You may be fine foregoing large expenses like taking vacations or paying to rent a place in a nicer neighborhood until you’ve saved enough to cover a down payment — is your partner on board with plan? Conversely, say your partner is the one with the big-time money goals — are those goals you are also interested in and willing to make sacrifices in order to accomplish them?
The reality is that, even if you and your partner don’t combine finances anytime soon — or ever — their money situation is going to affect yours.
The Mcneelys are an excellent example of learning how to communicate and compromise: At the start of their marriage, Talaat had debt, but Tai didn’t. But they decided paying it off was a priority, and they got rid of it in their first year of marriage. “We made a lot of compromises and a lot of changes,” Tai told me. “We had to say no a lot. We were newlyweds, but we were eating at home, and a lot of times we didn’t go out, but we didn’t find our lives boring, you know? It was what we wanted to do because we knew the ultimate end goal was to become debt-free.”
Again, it’s okay if your money goals aren’t perfectly aligned at the moment. You simply have to be willing to make compromises to get to a place that makes both of you happy and fulfilled, financially and otherwise.
3. The “How Are We Going To Combine Finances?” Conversation
Or rather: Are we going to combine finances? Some couples choose to set up a joint bank account as soon as they decide they are in it for the long haul; some decide to keep their money separate for their entire lives.
Personal finance blogger Desirae Odjick of Half Banked says that you don’t need a joint bank account as a couple — but you at least need a joint budgeting spreadsheet. “No matter how you structure your accounts, if you’re sharing the decision-making power over a pool of money, a joint spreadsheet is an invaluable tool to help keep track of that money and where it’s going,” she writes. “Let’s say you aren’t up for sharing accounts, but you and your partner decide that between the two of you, you’ll spend $500 on shared food for the month. If you’ve got a spreadsheet set up, you can track your spending (seriously just do it) every time you buy something you consider part of that budget. Restocking bananas? Totally goes in the food budget. Getting your nails done? Probably not.”
The reality is that, even if you and your partner don’t combine finances anytime soon — or ever — their money situation is going to affect yours. For example, paying off debt is another major financial goal. If they have a ton of debt to pay down, you may have to decide that you are okay scrimping in certain spending areas to help them achieve that goal. Even if you share everything 50/50, they will likely need to scale back their spending in order to pay off debt faster, and you might feel the need to follow suit.
For that matter, combining finances or not comes down mainly to personal preference. You may feel like you need to protect yourselves by keeping your finances separate. Others, however, might prefer setting up joint accounts to simplify things as much as possible. Regardless, you still need to be on the same page when it comes to budgeting, because it’s highly likely that the vast majority of the things you spend money on will be shared.
When you start having these conversations, of course, depends on you and your specific relationship, but many would argue that earlier is better than later. And know that you may not walk away from any of these conversations with a rock-solid plan for your financial future together — but that’s not the point. If you’re taking the time to make room for someone in your life, you better believe they’re going to affect your finances, and you theirs. The more proactive you are about starting open conversations about these topics, the better off you’ll be in the long run.
NEXT: How one couple saved their marriage by asking each other a simple question
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