For Richer and Poorer: Don’t Let Financial Worries Harm Your Relationship
June brides will walk down the aisle this month to say their vows and among the most important will be agreeing to stay together “for richer and poorer.” Consider these statistics:
- According to a recent study at Utah State University, couples who report disagreeing over finances once a week are over 30 percent more likely to divorce than couples who disagree about finances a few times per month.
- The study also found that couples who had no assets were 70 percent more likely to divorce than couples with $10,000 in assets.
- Even though times are tough, the latest annual poll of the state of marriage in the United States by the University of Virginia found that divorce rates have been falling during the recession, which may be evidence that couples are sticking together due to job losses and reduced assets.
Whether you are just beginning to get serious with someone you are dating or if the two of you have been together for decades, it takes both parties to set and achieve financial goals. There are steps you can take now to help ensure a more secure financial future.
Having the Money Talk
According to a survey conducted by creditcards.com last year, financial issues topped the things that people are very or somewhat unlikely to talk openly about with someone they just met:
- The amount of credit card debt (81 percent)
- Details of your love life (81 percent)
- Your salary (77 percent)
- The amount you pay for your monthly mortgage or rent (72 percent)
- Your health problems (62 percent)
- Your weight (50 percent)
- Your political views (42 percent)
- The death of a loved one (39 percent)
- Your views about religion (34 percent)
- Your age (24 percent)
As with so many things in creating a successful relationship, communication is essential. Publicly traded companies have to report on its financial standing and outlook to shareholders every three months. When was the last time you and your partner had a serious discussion about your common financial goals and how best to achieve them?
Set an official time when you both agree to focus on the issue and choose a place where you know you won’t be interrupted. Agree on ground rules knowing that you are a team that must work together to be successful.
A Quiz with No Wrong Answers
Here’s a quiz to get things started. Each one of you should fill it out and then compare your answers.
- What would you do with the money if you received $1,000 tomorrow from an unexpected refund, bonus, gift or prize?
- How would you pay for an unexpected expense of $1,000 tomorrow from a family emergency or a car accident?
- If you have not created a spending plan, what percentage of the household budget do you think goes to paying bills? Savings? Entertainment and discretionary spending?
- What would you do if you have a major financial crisis such as losing a job or having a medical emergency?
- What is your top financial concern at the moment and your top three ideas to deal with it?
- What is your top financial concern or goal for the future and the top three ideas to prepare for it?
Once the conversation gets going, you may need to spend some extra time organizing financial records, preparing a spending plan and reviewing income-to-debt ratio.
Don’t be afraid to ask for help. Sometimes working together using money management software can clarify the hard numbers.
