Love & Money is a new MarketWatch series looking at how issues surrounding money impact our relationships with significant others, friends and family.
Financial issues are one big reason why couples divorce, so find out if you’re financially compatible before saying, “I do.” So many of our financial values are influenced by our culture, family and experiences that finding the perfect combination of romance and finance could be an infinite quest.
Joe Biden, the former Democratic vice president, once said, “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” Whether you’re a spender or saver, there are ways you can find out if you’re a good financial match before you decide to get married.
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Since most people don’t exactly want to ask a date they’ve just met on Tinder or OKCupid IAC, +2.58% to see their budget, other telltale signs can help you gauge how well you’ll see eye to eye financially. But these things must be handled delicately, at the beginning at least.
Here are some questions you may wish to ask
• Do they act impulsively and drop money on flashy clothing, sports cars or expensive trips, even though their income doesn’t support that lifestyle? If so, that’s a conversation you need to have sooner rather than later. The bank account may not live up to the lifestyle.
• Or maybe it’s the opposite problem: Do they count every cent? If you’re a free spirit who likes to spend and your date cringes every time they open their wallet — or sends a Venmo request for every little expense — you might want to consider this a red flag.
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• What kind of family upbringing did they have? A person’s background can give you great insights. Maybe they went on annual family vacations and believe it’s an essential part of life. Or perhaps they were given everything they were asked for, which has led to bad financial habits in adulthood.
• Are you OK with your partner earning far less than you do? Or far more? Would a certain amount of debt be off-putting? And do you have one reaction to student debt and another to, say, credit-card debt? These are issues that should be put on the table before setting up a life together.
When things get serious, start making financial plans
These situations are extremes, but you get the idea. Widely differing views on money can lead to big issues down the line. While a perfect alignment of financial values is fairly rare: You’ll need to determine where you draw your own red line on debt, saving and spending.
Whether it’s saving for retirement, buying a house, or paying for that next vacation, a budget is crucial. Creating a detailed plan and mapping out short- and long-term goals will help determine how to allocate resources, especially for couples deciding to co-mingle finances.
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If tracking every detail of your income and expenses on a spreadsheet isn’t your cup of tea, automate your savings and spending accounts, and joint bills. Retirement savings should also be automated, especially easy if your company offers a 401(k).
Whatever doesn’t go into the “needs” and savings accounts can be deposited into another account and used for “wants,” which are more flexible. Examples include dining out and entertainment. Bottom line: Budgeting works best when it’s automatic and easy.
How to compromise over your budgeting differences
There are several advantages to keeping a portion of your finances separate. Chief among them: maintaining independence and control over your bank accounts. If you take this route, you’ll want to establish clear financial goals that you can both meet as a couple.
Risk tolerance is another area where couples can butt heads. While one person may love cryptocurrency, this might cause major heartburn in their partner. One solution: Set up a separate account for the risk-taker — keeping these funds separate from those needed in the short term.
See also: 8 weird things that America’s happiest couples have in common
If there are problems that need solving before you either decide to move in together or get married, enlist the help of a financial adviser in addressing retirement savings, investments, and debt repayment. Having an independent third party can help remove emotion and ego.
Finding someone you’re 100% compatible with is hard, maybe even impossible. Whether you decide to combine finances, keep them separate, or do a bit of both, financial issues are best solved with honesty, transparency and the willingness to meet each other half way.
Julia Pham is a wealth adviser at Halbert Hargrove.
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