Posted on December - 07 - 2010
Couples Money Management
Money, as well all know, is the root of all evil, but is also the most sought after resource. Without question, it complicates relationships, especially romantic. It causes two people to look at their hard-earned money now as “ours” and not “mine”, and also combines two completely different financial philosophies and histories.
It is essential to understand, first, how money affects each stage of a relationship. People that are in the early stages of dating compared to engaged or married have very different concerns.
Dating
When you’re first dating, finances are generally assumed to be separate because you have no legal ties and the big question has yet to be popped—unfortunately this means, there is still a chance that all will not be well in paradise forever.
For this reason, Kiplinger actually suggests establishing a written contract before you move in with your new sweetie to eliminate money-related issues. Whether or not you decide to literally put your finances in writing, it is recommended that you at least come to a mutual verbal understanding of where you both stand when it comes to paying for your share. Also, if things do happen to sour, the agreement keeps you from having to pay the ex’s bills.
Engagement
Once there’s a ring on it, everything should be reevaluated.
It’s a good idea to map out the details of your money-plan so that animosity from never having an honest conversation about finances doesn’t build up and cause a riff in your otherwise perfect world. The New York Times suggests four critical money topics to discuss upon taking that next step—
- Ancestry: How did your parents deal with money? Did they teach you to deal with money?
- Credit: Allows you to understand your plan for big purchases in the pipeline, as well as provides you with a full documented history of borrowing/spending habits.
- Control: Who will pay the bills or who will pay what bills?
- Affluence: How much money do we want to have someday? How important is making money in our relationship?
This seemingly unromantic conversation will pay off when it comes time to write the check for your first “joint” bill, and also when you fully merge your money post-matrimony, since you both will fully understand each others’ views.
Marriage
After or close to “I do”, the next logical step is fully merging your finances. Many people choose to do so shortly after getting married, when the legal obligations unite as well. Creating a joint checking account is quite convenient since it’s less money movement, but it’s not entirely required. This allows each of you to comprehend and budget for fixed costs versus expenses, and the money is all coming from one place, eliminating any talk of “my” or “your” wallet.
Another merging method for married couples is discussed on MoneyUnder30.com; a joint credit card. Basically where each individual has a card linked to the same account for fluid expenses like groceries and gas. Rewards points are a plus, but fees can be a drag.
Money undoubtedly affects each relationship differently, but one thing is clear, it must be talked about. Couples who avoid the subject will notice a recurring issue if they don’t determine their money ground rules from the beginning—your first fight over money will not be your last. If you are truly a couple, consider yourselves as one and see budgeting as a means of strengthening a relationship, since it’s just one more thing to work through, together.
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