By Yolanda Spivey
Money has the power to cause a relationship to fail. And a great relationship will fail miserably if a couple does not discuss important expectations and the specific role that money will play in their relationship.
Instead of letting the chips fall down, a couple should proactively discuss financial matters upfront and in an honest manner with each other. After all, if a couple doesn’t discuss their finances and make them a priority then their finances simply won’t be a priority.
The first step a couple may want to take is deciding who is responsible for what. This is an important step and should be readjusted as the relationship changes. But at the beginning, spelling out who is responsible for what bills and the portion that each one must contribute is a must. Obtaining a joint bank account that’s allocated to bill paying is also a good idea. Please keep in mind that it is perfectly fine to keep your own separate bank accounts on the side.
As you become more serious in your relationship, both people should analyze their credit card debt. If you have a partner who has a massive amount of credit card debt, try to combat that debt and pay it off before tying the knot. Keeping a high credit score will ensure that you’ll be able to make big purchases, like a home, together in the future.
Should you sign a prenuptial agreement?
This is the most difficult and most sensitive topic to discuss with your lover. And it will cause one partner to become bitter, thinking that the other one is not vested in the marriage but instead, he/she is only concerned with money. But wake up people. We are living in a time where things are quite different and many people are bringing a lot of financial and material baggage into a relationship. It wouldn’t hurt either person to explore prenuptial agreements to see if this something that is right for their relationship.
As you two grow as a couple, you soon will be making your first home purchase. The most popular form of home financing is a thirty year mortgage. If you look at the amount of interest you’ll pay on a thirty year mortgage over a thirty year period, you might lose your mind. You could actually purchase a second home with the amount of interest you’ll be paying. So it would be a good idea for you two to pay off the mortgage as early as possible. This is quite feasible if you and your partner are willing to pay 10% additional on each mortgage payment. Also, use an online mortgage calculator to get an idea of how much you’ll be paying each month in interest.
Lastly, as your family expands, it’s important to make money a family affair. Teaching your children about money is key. If you don’t teach your children, no one else will because they are not going to learn about finances in school. The earlier you start teaching your children about basic finances, the better. A good start is to open up a bank account with them. Have them do chores around the house to earn extra money and/or help them open a small business.
Most importantly, let them know the importance of saving their coins.
Yolanda Spivey is the owner of Michael Whitney & Associates and writes on a variety of topics. Please visit her on the web at www.mwhitney.com and or email her at firstname.lastname@example.org.