I’ve always been a little bad at maintaining “mine” in a relationship. I’m a pretty generous person, by nature, and more than once I’ve been in a situation where the person I was with took advantage of that. I always figured, a happy relationship requires sharing everything, right? So it totally made sense to pool my money with my partner’s money and call it all “ours”.
The only problem is… I tend to date women who aren’t very ambitious. Dare I say I’ve had a few girlfriends who have been downright lazy and selfish. In my experience, these women tend to be the worst about taking advantage of me, even in other areas of our relationship. Now, I’m not sure whether that’s a fair connection to make, but I do know that the way we spend money tells a lot about who we are as a person, and as a romantic partner.
Many of the questions we think we need to ask go undiscussed, just because we’re not sure we’re going to like how our partner will react to them. For example, if you’re worried your partner doesn’t share your views about faithfulness, you probably won’t bring it up. Realistically, though, the greater the differences in your opinions, the more you need to talk about those things – that way you can decide if you can reach a solution that works for both of you.
How many of these discussions have you already had – and how many do you still need to have? Can you think of any we forgot?
1. How do you feel about kids?
In many cases, the way we grew up greatly influences our views about having children. My brothers are all way older than me, so I’ve had my “rental kids” since I was about 7 years old. I’ve also never been the type to fantasize about getting pregnant and having a child biologically related to me. In fact, I decided when I was 3 years old that I was going to adopt a child, rather than giving birth. My ways are pretty ingrained.
For those who were born in less-inclusive families, such as with homophobic parents or a traditional nuclear family, the idea of adoption might not be a reasonable answer. I’ve dated women whose families wouldn’t accept a child that wasn’t biologically related to them. I’ve dated women who have already had kids, conceived naturally in a previous relationship. I’ve dated women who never wanted kids, and women who wanted kids as soon as possible.
Even though it doesn’t seem like having kids is directly related to your finances, there is a lot of overlap. It should come with no surprise that a family costs significantly more than a couple – and not being financially stable enough to afford those costs can cause severe strain in every aspect of the relationship. Once you add in the need to save up for artificial insemination, surrogacy, or adoption, if that’s part of your plan, it’s much easier to see how your future family is deeply related to your financial health now.
2. What’s the total amount of our combined debt?
Okay, now this one definitely sounds like a financial question, and depending on how long you’ve been together, it might be considered really intrusive. The fact of the matter is, it’s important to fully understand your debt before you merge your finances, rather than after the fact. In some places, getting married will automatically hold you accountable for your spouse’s debt – I have a friend who was stuck with about $42,000 in credit card debt when her husband went to jail before she filed for divorce. Of course my fingers are crossed that you won’t end up in this exact situation, but there are other ways you’re going to be accountable for each other’s debts, even if you merge your bank accounts before you get married.
If you’ll be using a combined checking account to pay off those debts, you’ll obviously need to talk about how much is going to be coming out every month. It might turn out that the one with the higher minimum payments is also the one making more money – this is great! But if that’s not the case, things can seem a little unfair, pretty quick.
When you are involved in any joint banking decisions, you’ll both be held responsible if anything goes wrong, which can have a serious impact on your credit score. I was recently denied for a new bank account because of an old joint account that went wrong. Trust me, it really is an embarrassing situation when you realize you can’t open an account now because your ex-girlfriend screwed up an account you stopped using years ago. In some places, it’s not possible to take someone’s name off of a joint account, either – so you’re pretty much stuck unless you close the account entirely.
As unfair as it might seem, your credit history does tell a bit about your relationship savvy, too – at least, the type of debt does. Medical debt often indicates a lack of planning ahead, such as building good health habits and saving for emergencies. Large credit card debt can indicate a tendency to be impulsive and a desire to live above your means (for example, using credit as a way to build your reputation, when you can’t afford to live the life you want to display). Student loan debt is a bit different, as the cost of tuition is so high, but a failure to pay off that debt can show a lack of commitment and follow-through.
Once you’ve discussed your debt, you’ll need to sit down together and create a detailed plan for the future. If there are debts outstanding, calculate your minimum payments, and make an effort to pay at least double that. If debt isn’t an issue, create a plan for the future of your finances, and make sure you stick to it.
3. Where (and how) do we want to live?
First, let me get an obvious point out of the way: You should never merge finances with someone you won’t live with. If you can’t live with them, due to their job or yours, or perhaps a family situation, the lines get a little fuzzy, but if you can’t picture sharing a home with this person, you’ll probably hate sharing a bank account with them.
OK, now that we’ve gotten that out of the way…
It shouldn’t surprise you that your living situation can be greatly affected by your finances, and can also play a part in affecting your financial situation. This “life goal” can change throughout the course of your life, too, either as you experience new things or you reach new levels of financial freedom that you didn’t see as a possibility before. Either way, this discussion should happen before you start pooling up, and ideally every so often after that.
It’s always been my dream to live in a camper van and travel the continental United States, maybe even spend some time in Canada and Mexico. But it’s also been my dream to own a smallish house with a detached writing studio in the back… Think Jenny’s studio in The L Word. These two goals might not seem like they work well together, but with enough ambition and savings, it can totally be a reality.
If, on the other hand, my partner hated the idea of living in a camper van, or wanted a huge mansion, the savings goals would be a lot different. We’d have to save a lot more for this bigger house, which means even more time spent living with our parents… Not exactly ideal for me. If my partner had no intention to move further than her parents’ spare bedroom, her ambition probably wouldn’t match up to mine, and I’d feel like I was saving all on my own.
In any case, talking about your ideal living situation will help you to understand exactly what you need to do to move forward. If you want to make these dreams a reality, it’s going to take some planning and elbow grease – you can’t just keep those dreams to yourself.
4. What’s going on with college?
When I was in my early 20s, I tried the college thing. Due to a few less-than-stellar situations that happened during that time, I was unable to finish my first year – and I lost the GPA that was paying for my tuition. I’d had to pull out my very first student loans, right before I failed out, and since I didn’t graduate, but simply stopped going to class, I didn’t qualify for any type of deferments. Any time I fell behind financially in other areas of my life, my minimum payments went up, because the interest was adding up quickly.
Non-compulsory education is a tricky subject, because it’s proven to increase both your earning potential and your total debt. I’ve always been the type of person to maintain that a college degree isn’t the only indicator of success, but it can be helpful to take the shortcuts it provides. It’s all in finding the degree that offers the highest amount of job satisfaction, with the highest likelihood of financial security. (If only that was as easy as it sounds.)
When it comes to your future plans, you won’t be able to decide for each other what to do in this situation – it’ll need to be a decision you each reach separately, and then find a compromise between. In the same relationship that destroyed my bank account, “we” came to the conclusion that I’d go to college after my partner finished – and then, due to other factors, we broke up just a few months after she finished school and started working. I don’t like thinking that the two are related, but in some ways, they are. Don’t put off your future for someone else, even if you see the relationship as lasting – things can come up at any time, and you’ll be kicking yourself if you miss out due to not making yourself a priority.
5. What are your top three must-have recreational expenses?
Sometimes, when creating a financial plan, we think that we have to cut all “fun” spending out of the picture and just focus on the future. I’m really bad about this; I either spend impulsively on everything I want, or I refuse to let myself spend anything that isn’t essential. As much as I value the time I’m in an “online shopping embargo”, it’s not usually the best way to handle the situation, since it increases the likelihood that you’ll overspend when you do your recreational shopping.
Instead of cutting those things out of your life entirely, it’s better if you make a few picks for the things you’ll allow yourself regularly. For me, the top three would be “date night”, stationery supplies, and dog toys. For my partner, Netflix and Gamefly rank a bit higher. Through regularly comparing the things we want to keep up, we find ways to make things work, without sacrificing the things we want the most.
It’s important to realize that these things are going to change – maybe even frequently. And, of course, allowing these expenses isn’t a free-for-all to spend as much as you can on those things. But prioritizing the things you want gives you room to decide whether you’ll save up for the things or just use them as little mid-week rewards. (I don’t save for my dog toys or date nights, but I will save up for a new journal or pen.) It’s still essential that you create budgets for these things, and the specific amounts that work for you will be largely determined by your overall financial situation.
6. Who’s going to handle the budgeting?
Let me be clear: In a perfect, happy relationship, the two of you will sit down together every week, go over the bills and the paychecks and your savings goals, and figure out a plan of attack for the next week. Unfortunately, that’s not realistic for every couple, or every schedule, or even every financial plan. It can be stressful putting your finances under another person’s control, or it can be stressful taking on someone else’s financial obligations. No matter which person you are, it’s important that you understand how the two will work together.
When taking all of your debts, bills, and expenses into account, you’ll need to create a more detailed action plan. As a general rule of thumb, use the 50-30-20 rule: 50% of your income should go toward your bills, 30% toward savings, and 20% toward recreational activities and purchases that you want. Whenever possible, bump up your savings or pay off more debt – but don’t try to cheat your future.
Keep in mind that figuring out a perfect financial plan is probably not going to be perfect for long – so getting comfortable discussing them when it doesn’t seem to make much of a difference will set you up for better solutions once things are more difficult. There are no “always right” or “always wrong” answers, so make sure your plan works for you. Try to keep things as fair as possible, and remember that you don’t have to keep everything together. If it’s easier for you two to maintain your finances separately, and you both agree to that solution, don’t let anyone else pressure you to merge your accounts. Trust me – if your partner insists on merging, even though you’re not comfortable with it, there’s probably a reason – and you probably won’t like it.