Talking to your future spouse or boyfriend about money can be unromantic, but it’s essential for a healthy relationship and avoiding unnecessary complications down the track. According to the New York Times, finance-related tensions increase the risk of divorce, so you’re better off having the money talk sooner rather than later. Here are five things you should talk about.
1. Salary – The first thing to talk about is how much you and your partner earn separately, which will enable you to work out which tax bracket both of you fall into, how much is taxed and if the combined amount can sustain both of your lifestyles. Factor in future life events such as having children or if one of you is retrenched – will a single income be enough in that scenario?
2. Debt – Debt is one of the hardest things to admit, but it’s also one of the biggest contributing factors to marital disagreements. In a marriage, you’re held responsible for your partner’s debts, particularly if you have a joint credit card, so it’s better to know upfront if your spouse-to-be has any massive personal loans or credit card debt.
3. Credit report – Credit reports are one of the best indicators of financial history and current financial position, providing insight into the ability of an individual to obtain credit in the future or pay their bills. Know where your partner stands by requesting to view his/her credit history, which will build trust and honesty between both of you, but also alert you to any bankruptcies or defaults you may be unaware of. Obtain a copy of your credit report »
4. Money habits – Is your spouse-to-be a spender or saver? Is he/she prudent with money? Before setting up a life together it’s essential to know his/her money habits or risk fighting over who spends what. But don’t accuse your partner of being a spendthrift or a scrooge as this will only make matters worse – talk through things calmly.
5. Financial goals – The last step in your financial talk is to discuss your goals, both individual and shared, and work together to come up with a solution if your goals and your partner’s goals are mismatched. At this stage you’ll have already talked about children, holidays and buying a home, so the next step is to discuss how you’ll afford to reach these goals.
Once you’ve laid your financial situation on the table, it’s much easier to talk about money in the future – whether that’s once a week, once a month or a few times a year, having the conversation is imperative to securing your financial future together.