Love and romance fills the air, but eventually, it’s time to get real. If you are planning to become serious with your significant other, you’re going to have to talk about money. Ideally, you should have this conversation sooner than later.
If you and your significant other are not financially compatible, it’s better that you understand this now rather than down the road.
Here are some of the things that you should keep in mind while you are navigating the tricky road of relationships and finances.
1. Figure out your financial personalities.
Some people are natural savers. Frugality comes easy for them and they find it a little painful to part with their hard-earned money. Others are natural spenders. They have the sense that money can be best enjoyed when exchanged for goods and services, and they have a financial attitude that leans towards living in the moment.
Some people are excited by financial risks, such as making major investments, while others are terrified by the possibility of loss and would prefer to keep their money securely in a CD. What’s your financial tendency and what is the tendency of your spouse or significant other? You’d better find out and fast.
Have a conversation about both your spending and your investing habits. Opposites attract, but it’s up to you to make sure that they continue to live happily ever after.
2. Discuss your goals.
Perhaps one of you wants to retire by the age of 40, while the other one wants to live in a mega-mansion and drive a BMW. If the two of you have conflicting goals, you’re in for a world of trouble. Talk about your vision for your life one year, two years, five years, 10 years, and 40 years into the future.
Where do you want to live? What do you want to drive? Do you want to still be working or not, and if so, what would you like to be doing? Most of all, how much money are you going to need to make all these dreams a reality? By discussing your goals, you’ll have a road map for how you’ll allocate your limited time, energy, and dollar bills.
3. Talk about debt.
Does one or both of you have any current debt? Where did it come from and is it indicative of over-spending patterns? If one of you has student loans that they’re paying off and no additional debt, for example, you may not have much to worry about. Chances are you already have good financial habits and you’re on the right track.
If, however, one of you has a whole bunch of credit card debt and can’t seem to stop from adding to that balance, charging restaurant meals and bottles of liquor on credit, then you may have some important issues to cover. What are your current debts, and beyond that, what is your attitude towards debt? Find out and fast.
4. What kind of business or investment risks do each of you want to make?
Perhaps one person dreams of opening up a bakery or starting their own consulting practice, while the other dreams of becoming a real estate investor.
What goals do each of you want to pursue? How much risk will be involved? How much money will be needed? How prepared are you for these endeavors? When do you want to launch these endeavors, and what will be your exit strategy if needed?
While you should make decisions based on hope rather than fear, it’s good to keep a strategic plan in mind. Have these conversations with your significant other so that you can make sure that in money, as in life, you’ll walk off into the sunset together.