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Talking money: 10 financial tips for relationships

(BPT) - In a recent survey, one in five Americans reported they have never had a serious conversation about money with their significant other, and less than half said they’re comfortable discussing finances with their partner.

It isn’t always easy to talk about money, but it’s essential since a clear majority of individuals surveyed say they are likely to split from someone who isn’t financially responsible. Whether you’re just beginning a relationship, considering moving in together, getting married, or are working toward financial goals with your spouse, each step of a relationship calls for a different approach to money and handling potentially thorny issues.

What’s your relationship status ... and how do finances fit in?

Dating

You’re in a new relationship, everything is exciting, and you look forward just to being together. Asking financial questions may be unnecessary, yet it still pays to make some observations.

  • What types of activities does your partner suggest — going out for fancy dinners or making a home-cooked meal?
  • Are splurges a regular occurrence, or are they saved for a special occasion?
  • A question such as, “How should we divvy up date night costs?” can suggest how your partner views spending habits.

Casual dating isn’t the time to deal with complex financial questions, but it can be a time to explore how your partner feels about basic financial issues.

Moving in

When moving in together, the money questions become more practical because cohabitation usually involves sharing expenses. This is the time to learn more about each other’s finances and views on money as your finances become more entwined.

  • Ask about a partner’s debt situation, student loans, savings habits, credit score and, perhaps, skeletons in each other’s financial past.
  • Share income materials including credit reports, particularly if you’re renting a new apartment or buying a home together.

Cohabitation can have financial implications depending on where you live, and a financial professional can help you understand any potential benefits or costs. If neither partner has a trusted financial professional, it may be time to consider finding one.

Tying the knot

When the conversation turns to marriage, talks about money must get serious. A strong link exists between disagreements about finances in a marriage and divorce. And should tough times hit, such as a job loss, how will you handle it as a couple?

  • It’s important to find common ground about major lifestyle decisions and purchases, including a house, cars, credit and savings objectives.
  • Married couples also need to determine whether a prenuptial agreement is a good idea, and if accounts are going to be separate or managed jointly.
  • This can also be a good time to talk to a financial professional about financial planning and taking steps toward realizing future goals.

There are no “right” or “wrong” answers to these questions, and each couple can determine what is the best situation for them based on honest communication.

Planning your future together

It pays to establish structure or guidelines for your financial lives that each of you agree on. These can include when to check with each other on big-ticket purchases or when to spend from one or the other’s personal funds.

  • Don’t forget about important issues that can get overlooked, such as establishing an emergency fund or assessing retirement fund/401(k) allocations.
  • It’s possible you’ll face “sandwich generation” pressures related to caring for and supporting both young children and aging parents. Millennials and Gen-Xers increasingly find themselves squeezed by such generational issues, surveys find, including one by North American Company for Life and Health Insurance, a Sammons Financial Group company. This survey also looked at planning for retirement and revealed that most couples don’t discuss this important aspect of their future, and then find they’re unprepared.

Even if you haven’t done so earlier, any time is a good time to seek out a legal and financial advisory team. A lawyer can help with wills, and a financial and insurance agent and counselor can help decide on health, life, disability and property insurance coverage; discuss annuities; and explore college funds/529 plans.

Love may be blind, but it knows how to count

“Talking money” and addressing issues related to finances are essential in every stage of your relationship. And arguments about money are all too common — in fact, 70 percent of married couples fight about money. That’s why it’s vital to talk about investment strategy and risk-taking, and to reach decisions together about investment goals and time frames.

Couples often credit a third party for helping them with financial matters including insurance-, investment-, tax- and legal-related financial issues. One survey found that 40 percent of couples who disagree about money said an adviser helped them make decisions about financial concerns that otherwise might have triggered tension in their relationship.

If you and your partner are interested in speaking with a financial professional, Midland National Life Insurance Company and its independent agents are ready to help, specifically with life insurance and other related financial matters, including annuities and retirement planning. To find an agent, click here.

 
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