Saturday, November 16, 2013

Awkward Money Talks You've Gotta Have

Awkward Money Talks You've Gotta Have

Keep your relationship (and your bank account) healthy by following these major money-talk guidelines

On a first date, there's no need to tell a guy that you've failed to sign up for your 401(k) or that you likely make double his salary.

But when you and he become "we," not discussing—and agreeing upon—money issues is a big mistake; it's one of the main reasons couples go kaput. One study from the National Marriage Project found that twosomes who fought about finances once a week were more than 30 percent more likely to divorce than those who had money disputes just a few times a month.

Still, having a "money talk" is about as fun as having blood drawn. To make it less painful, follow this guide for what to bring up (and how) during each stage of your coupledom.

If You're Dating. . .

Check Him Out at Check Time
Observe what he does with the bill on dates, says Manisha Thakor, coauthor of Get Financially Naked. "Financially solid people look at the receipt, but those embarrassed about their money situation often just throw down a credit card."

Red Flag: It's your third time out and he's forgotten his wallet. . .again. Clearly, he's not that responsible when it comes to money.

Talk Stash (or Lack Thereof)
When you and your guy decide the relationship is getting serious, you should start sharing specifics about your salary and any debt you may have amassed, experts say. (A recent survey found 44 percent of dating couples start talking about money within six months of meeting.) "Dating is about figuring out if you're like-minded, and that includes your financial compatibility and spending tolerance," says Christina Steinorth, a psychotherapist and author of Cue Cards for Life.

Lend More Than a Hand?
What if, after several months of dating, your beau asks you for a few hundred dollars? Go with your gut. If you do part with the greenbacks, hammer out the details about how and when he's going to repay you, says Bethany Palmer, who cowrote The 5 Money Personalities with her husband, Scott. (And if your beau of a couple of weeks wants to borrow money? "Run as fast as you can," advises Palmer.)

Red Flag: If he becomes defensive when asked about cash you loaned him, you're likely not going to be repaid—and should question the relationship.

Give Good Gift Limits
It's the holiday season and while you don't want to come across as Scrooge, if you simply can't afford to slip a $300 gift under the Christmas tree, speak up about your tight budget and set a spending cap with your boyfriend. "Find a way for both of you to get your giving needs met," says Thakor.

If You're Living Together. . .

Share Bills Nicely
For some, divvying up household expenses into yours, mine, and ours works. Other couples may prefer splitting it all 50-50 or proportionally to their incomes. The most important thing? Agree on a system before you move to your new love nest.

Red Flag: He says he can't afford to go halfsies on a new bed you two need—but then drops $1,000 in Vegas with his bros. Uh, don't think so.

Set Up a Splurge Policy
You're sharing space, but does that mean you should have a say in each other's large purchases? "Respectful couples establish a spending benchmark and check in with each other before exceeding it," says Steinorth. If your boy balks at your dropping several Benjamins, discuss why he feels uncomfortable.

Red Flag: Your guy can't resist using credit for what he can't afford. Address this or expect a future of debt and high interest rates.

Name Your Place
"Buying a home with someone when you're not married is complicated, so you need to think about the worst-case scenario," says Thakor. Share the responsibility and put the property in both your names. You should also meet with a lawyer who can help you get in writing exactly how you'll handle the expenses if you break up, such as who's responsible for the mortgage, property taxes, and cost of selling. No one ever said real estate was romantic.

If You're Married. . .

Be United, Even If Your Checking Accounts Aren't
Two-thirds of married couples have joint checking accounts, per a recent survey, but pros say they're not a financial must once hitched. Whether you decide to maintain separate bank accounts, joint ones, or some combination of the two, it's vital to be 100 percent transparent with your spouse. Talk money at least once a year, as well as when you go through a big life change.

Red Flag: He's always reminding you of his larger paycheck. Such a power play can build intense resentment over time and give him the false sense that he runs the marriage.

Have Joint Dreams
Set your household money goals. If you want to pay off the credit card but your spouse wants to save for a trip, compromise. One way is for each of you to write down your top five objectives and share your responses, says Steinorth. Then negotiate to create a harmonious list.

Determine Your Level of Support
At some point, a relative or friend is going to come asking for a handout. Will you give? The key is to discuss it together, says Steinorth. If you're both open to it, "decide on how much you're comfortable with, what the payment terms will be, and if you'll make the person sign a repayment contract."

Red Flag: He brushes off your desire to be involved in family spending. This isn't the 1950—you deserve to know how your money as a couple is being handled.

Look into the Future
Presuming you'll live a long, happy life together, you'll want to retire (comfortably!) one day. What it will take is something you need to determine very early on—if not before you tie the knot. "Speak to a financial planner—there's no room for guessing," Palmer says. "Then you'll be able to enjoy your golden years knowing it was a team effort."

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