Can Money Really Buy You Love?
Money may not necessarily buy you love but it certainly impacts how happily married you will be. Valentine’s Day is often a time devoted to showing love and appreciation for your significant other, but it also represents an opportunity to evaluate your relationship emotionally and financially.
I often suggest that you and your significant other use this day as a chance to strengthen your financial commitment to create a more stable and secure financial relationship. This is an act of true love.
According to a study conducted by the National Marriage Project, “Bank On It: Thrifty Couples Are The Happiest”, financial friction and consumer debt play a large role in marital happiness and is a great predictor of divorce. The study also states that couples who disagreed over finances once a week were 30% more likely to divorce than those who disagreed a few times a month. Likewise, how a spouse views their partner’s spending habits heavily contributes to financial stress in a marriage. If a spouse believes their partner is a reckless spender, couples were 45% more likely to head toward a divorce.
Marital finances do not have to be problematical or cause disputes. Communication is key when discussing finances with your spouse and can help to eliminate potential money issues later on in your marriage. Even for couples who are not married but are in a serious relationship, financial talks with your significant other can help you be honest and open with one another about your financial history and spending habits.
Here are a few topics to discuss when having a serious financial sit down with your significant other or future life partner.
Determine who is a saver or a spender.
Chances are one of you is a saver and the other is a spender. This directly ties back to individual spending habits. As a couple you need to figure out what each individual’s wants and needs are and distinguish the two. This area is bound to generate disagreement but being honest and forthright with one another now erases potential future conflicts if there are serious spending discrepancies.
Discuss financial goals.
Assessing your goals as a couple will help you figure out how you will realistically plan out your financial future. Honesty and transparency about individual credit card accounts, debt, income, assets or any other money concerns, will give you a better idea of how financially compatible you are with each other. Be sure to look up each of your credit reports and credit scores to find out what are the chances both of you will be able to afford a loan on a mortgage, car or any other major life purchase. Determine if you would like to have children, how many and how you will afford to raise them. Discuss how and when you plan to retire together as well as how much money both of you will need to live on in the golden years. Reevaluate these goals as life changes.
Create a joint spending plan.
As you plan your future together, devise a joint spending plan. Major purchases you make will be joint purchases, such as a house, car or boat. If you decide to open any joint credit card accounts or become responsible for your partner’s existing debt, both of you will be on the hook for expenses accrued. Be aware of the responsibilities you are taking on as a joint owner and if it is one you financially can afford.
Design a compatible budget.
Come up with a budget (rent, utilities, food, entertainment expenses) that reflects your needs as a couple and be brutally honest about certain items which both of you could do without. You’d be surprised at how much money you can save each month and year if you cut out unnecessary expenses and stick to eliminating them. There might be disagreement over what items to trim out of your budget, but if you each make some compromises, you should be able to come up with a suitable budget.
Decide who will manage the money in the relationship.
While it is necessary for both of you to be on the same page financially. Figure out what each of your strengths and weaknesses are to see if one of you should handle the check book or the credit card bills. Even if each of you are individually handling certain aspects of your finances, keep each other in the loop.
Money matters a lot in marriage or a serious relationship. Take care of the smaller details in the beginning to ensure a smoother and less stressful road later on in your relationship. Taking responsibility for your relationship when it comes to finances is the best gift you can give on Valentine’s Day.