GOLDEN VALLEY, Minn. — Fresh on the heels of Valentine's Day, were talking finances for couples. Local financial professional Justin Halverson from Great Waters Financial is here with five questions that will test whether you're financially compatible with your partner.
WHY IS IT IMPORTANT TO BE ON THE SAME PAGE ABOUT FINANCES WITH OUR PARTNER?
- Studies show disagreements about money can damage relationships, in some cases leading to divorce.
- Getting the conversation started can be tricky. I have an easy way to get started with a financial compatibility quiz on my website.
DO YOU TALK OPENLY ABOUT FINANCES - OR DO YOU FIND YOURSELF HIDING YOUR SPENDING HABITS?
- One of the biggest red flags in a relationship is financial infidelity.
- Financial infidelity can be anything from hiding purchases to lying about debt to having secret bank accounts.
- It may seem like a little white lie to buy something and not share it with your spouse, but the practice of keeping money secrets can ruin a relationship just like any kind of infidelity.
DO YOU SHARE THE SAME OR SIMILAR FINANCIAL GOALS?
- It’s important to recognize you don’t have to see eye to eye on everything. But you need to respect each other.
- In many relationships, you have a spender and a saver. If one likes to shop and the other likes to save, earmark some money every month for both saving and fun purchases.
- Work to create a plan that includes both your individual goals and the goals you have as a couple.
DO YOU BOTH TAKE RESPONSIBILITY FOR SHARED EXPENSES?
- Building a shared life together means figuring out who will be responsible for what household expenses. There are a few approaches you can take.
- Create a joint account and split everything down the middle. This works well for couples who have similar incomes.
- If there is a significant salary gap, each partner might consider contributing to shared expenses in relation to their capacity. For example, splitting bills 60/40 or 75/25 based on each person’s income.
- What’s important is you both are working together to achieve your mutual financial goals.
WHAT MONEY LESSONS DID YOU LEARN AS A CHILD?
- Kids are perceptive and research has found the way parents think about spending and debt can influence how children approach money as adults.
- Discussing how you were raised with your partner may help you understand each other’s financial habits.
- Once you understand the reasoning behind each other’s money decisions, you and your partner can discuss any issues you might have and improve your financial health.
Q: WHAT ELSE SHOULD WE BE ASKING EACH OTHER?
WHAT IS YOUR CREDIT SCORE?
- A high credit score can show that a person is responsible and reliable with their finances.
- Some 42% of adults say knowing someone’s credit score would affect their willingness to date that person.
- Poor credit can have real implications. Banks remain wary of loaning money to borrowers with tarnished scores. And low scores can deny a person access to a mortgage.
- Debt is often a huge issue in many relationships. Make sure you’re honest so that together you can develop a plan to reduce your debt burden.
- It’s important to communicate openly and honestly about what led to the low score and work on a plan to improve it.
Q. WHAT IF PEOPLE LOOK AT THESE TOPICS AND REALIZE THEY ARE WORLDS APART?
- Don’t worry if you don’t see eye-to-eye on everything. It’s not a deal-breaker.
- I recommend my clients set up a monthly meeting to talk about money. This helps keep the lines of communication open, and it makes it harder to keep secrets or tell lies.
- It may also be time to bring in an objective third party to help you out.