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Found a mate? Time to bare your money secrets

Personal finance is an unromantic topic. But don't wait until after the invitations are printed to find out if you're fiscally compatible.

By Donna_Freedman Jul 8, 2013 10:20AM

Logo: Couple at table with mugs, looking down (Andrea Morini, Photodisc, Getty Images)One of the topics of a recent Ally Bank "TweetChat" was what young people should talk about before moving in together.

 

"Credit scores: Credit scores: I'll show you mine if you’ll show me yours," tweeted MSN Money columnist Liz Weston.

Very funny. Very apt. That's because marriage isn't just about love. It's also a business relationship, and like any partnership it needs to take money seriously. The same goes for couples living together without benefit of clergy: If finances are to be merged, couples need to be on the same (ledger) page.

That's not to say that savers and spenders can't live happily ever after. But communicating about money is as important as communicating about feelings. And emotions run high when it comes to cash: Nearly seven in 10 people polled by the National Foundation for Credit Counseling evinced "negative attitudes" toward discussing finances with their spouses-to-be.

Um, what? You're joining your financial future to someone with whom you can't talk openly and/or someone who you feel might have something to hide?

"Regardless of how difficult it may be, the conversation about personal finance is one that should be neither ignored nor postponed," says NFCC spokeswoman Gail Cunningham.

Note: "Personal finance" doesn't only mean how much money you are (or aren't) bringing to the relationship, but also financial attitudes, behaviors and goals. Some of these issues come out during the getting-to-know-you phase: I'm planning to start my own business within three years. I want to have two children before I'm 35.

But money can still be a taboo topic, which is why you might not learn everything you need to know until after the invitations have been sent out.

Money now, money later

Ron Lieber of The New York Times profiled a woman who told her new beau that she had "more than $100,000 in debt" (much of it student loans). But she didn't really know how much more than $100k, because she'd been making minimum payments and ignoring the bottom line.

As the wedding approached she finally did the math -- and discovered that she actually owed about $170,000. Three days later, her fiancé broke off their engagement.

Even if your intended sticks with you, big debts could engender resentment down the line because "they profoundly affect every (future) financial decision, from buying a home to how many children to have," Lieber notes.

Do you even want to buy a home, or have children? These are also discussions you need to have with your beloved. Ditto family issues such as aging parents or ne'er-do-well siblings: Discuss how much you can afford to help, either with time or money.

'An erosion of trust'

Romantic? Not particularly. But love isn't always about giddy infatuation. Sometimes it's about mature decision-making.

As relationships progress couples should talk about money "openly and honestly," advises Suzanna de Baca of Ameriprise Financial. You don't have to compare credit scores on the first date -- although some do -- but if you're planning to marry or cohabit you should "describe very specifically how you're going to set up the finances."

"In the absence of agreement, it's common that spouses start hiding financial information from each other," says de Baca, vice president of wealth strategies.

"Whether it's an outright lie or (concealing) things, those are what can create an erosion of trust as well as potentially damaging your credit and your overall financial plan."

Goals and dreams

Ensure continuing communication by scheduling a monthly "money date," suggests Shelley Solheim, director of financial education for Capital One. This lets you discuss finances "when you're both feeling rested and available," as opposed to dealing with money problems after they've developed.

Examine your budget and expenses to make sure they're congruent, and check the progress of plans you've made for the short and long term. "Talk about money in terms of your goals and your dreams," Solheim says.

Keep in mind that even people who love each other can disagree on fundamental financial issues. Maybe you've always bought used autos and driven them until the wheels fell off, whereas your spouse just loves that new-car smell. It's important to listen to your partner's opinions -- even if you think s/he is wrong.

Compromise may be necessary. If you can't do that, then table the issue until you both cool down. It might also help to bring in a neutral third party in the form of a certified financial planner or some other money professional. This person could discuss how biannual vehicle trade-ins affect not just the current bottom line but also your future financial security.

The NFCC suggests tips for money chats (preferably before marriage/cohabitation), including:
  • Be honest. Those courtship gifts and weekend getaways may have made you seem wealthier than you are. Time to get real.
  • Talk money history. What money habits/attitudes did you learn growing up? How have they affected the way you handle your own finances?
  • Put your cards on the table. If you've got debt or your credit score is in the basement, say so. Brainstorm ways to fix those situations.
  • Avoid blame or criticism. Focus on solutions.
  • Include "savings" as a line item in your budget. Instead of spending all available cash on dinners out or décor for your new place, give yourselves the gift of an emergency fund.
  • Elect a chief financial officer. Whoever's best at paying bills should step up.
  • Create short- and long-term goals. While starting that business is important to you, it's essential to develop plans as a couple as well. Note that "retirement" should be among them.
Readers: Did you have "the talk" with your significant other before joining forces?

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9Comments
Jul 8, 2013 5:42PM
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I wish that I had known my wife hates money... so much so, she tries to get rid of it every chance she gets!
Jul 8, 2013 9:17PM
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The one secret I wish my wife had revealed to me before we got married is this:

 

There's our money and then there's her money.

Jul 8, 2013 2:14PM
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Not only did we have the talk, it was important in determining our legal wedding date.  We found it to our financial advantage to get married much sooner than originally planned due to taxes, insurance and a few other items.  We did indeed get married on the original wedding date, with family and friends present.  However, we secretly married seven months earlier than planned.  The savings more than paid for the formal wedding.
Jul 8, 2013 11:26AM
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My father always said that a person needs to be 3 things when they get married:

1) Young.

2) Poor.

3) Stupid.

 

He was such a wise man.

 

Jul 9, 2013 8:01AM
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In the end, agreeing on your money is basically agreeing on your lifes goals and aspirations.  it's something that, if not done in a marriage bodes ill...
Jul 8, 2013 11:28AM
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It sounds good to get a pre-nup, but everyone that does gets divorced.It`s hard to trust

people when it comes to money.

Jul 9, 2013 12:54PM
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Telling your wife about every $$$ you have is a bad idea. Women typically earn less than men and that means in the end she's going to be spending more of your money vs her own. Also its wise to buy an apartment or house before you get married so that she cant take it in the divorce. It seems while women bitch and complain about a lot of things, they get a sh**load of stuff during a divorce! They also get a nice hefty alimony and usually child support. It's no wonder that majority of divorced women never remarry! why stop that paycheck from coming in monthly. and no I'm not divorced but I get it that the game is rigged in a woman's favor. So I say hide your $$$ with your parents if you can, so that she doesn't take it all.
Jul 9, 2013 9:33AM
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As it was told to me

 

Your money is 'ours' but her money is 'hers'

 

Women are selfish

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