Discussing finances with your significant other is one of the most important factors in a relationship. Often in relationships, one party is the saver and the other is the spender.
1.) If you are single, make it a goal to be debt free. Entering a serious relationship with heavy debt is difficult to talk about and very embarrassing.
2.) Before you get married you need to have a meeting and each understand the others financial situation. What are your legal obligations and how much are they a month. Does your current income support this or do you use credit cards to off set your deficit?
3.) If your significant other is in deep trouble then it may be OK to prolong the marriage until financials get back into shape. You are in no hurry to take on another person’s history of money already spent.
4.) Waiting to get married. As a rule of thumb, you should know someone 2 years and live together for 2 years before you get married. Its as expensive to get a divorce as it is to get married.
5.) Student loans are often considered soft debt or a non-event in that the payments and rates are low. If someone has $80,000 in student loans and they are not in the line of their degree, this is a red flag.
6.) The balance sheet, this is where the math add’s up everything. You do not want any surprises later. What is your 401-k? Where do you bank, how much is in there? How much do you make? How much do you pay in alimony, child support? This is uncomfortable but it’s more uncomfortable with your divorce attorney and you do not know the answer.
7.) Talk about long term goals. Say if one of you has a life long dream is to retire in the woods and the other is to live in Rome. You may not be on the same page. Consider living together longer before contractually committing yourself to a judicial proceeding for mutual departure.
8.) Children are expensive. The honor of raising children in this modern world is very expensive and takes up a lot of time. Your financial leadership now is their financial future later.
9.) Spenders and Savers. If one person spends more then the other, come to a compromise. If the budget allows $600 a month for each to spend freely then let that be the benchmark so there are no surprises or blame.
10.) Credit cards. Set limits on each credit card. Call the credit card companies and have them change the limit to $500 each. This policy avoids balances growing beyond control.