What’s your relationship’s financial compatibility score?
When dating, many people spend a lot of time getting to know their potential mate’s habits, beliefs, and goals to test “compatibility.” However, one aspect that many couples ignore is financial compatibility. Though taboo at first, failure to address your financial compatibility before making a commitment can have massive repercussions down the road to happiness.
What Is Financial Compatibility?
The relationship between love and money is hard to deny. From gold diggers of either sex to rags-to-riches stories of “true love” the idea that a romantic relationship can exist because or in spite of material possessions is firmly established in our culture.
However, most of us don’t live in a fairy tale or Hollywood. That is why, just as we vet our potential life partners in terms of their goals, belief systems, and living habits, finding someone who is compatible on a financial level is equally important when it comes to long-term happiness. Financial compatibility, however, has less to do with actual money earned or saved and more to do with the attitudes and behaviors surrounding it.
In a nutshell, being a financially-compatible couple means you share a financial belief system (i.e. spending vs. saving) and freely practice financial behaviors that reinforce this system.
Just like religion, having children, and living in the city or the countryside, failure to address this characteristic of your personalities early on in your relationship can lead to massive problems down the line. In fact, conflicts over money is the third most-often cited reason for divorce in the United States. There is even an entire professional specialty dedicated to it: certified divorce financial analysts.
Determining Whether You Are Financially Compatible
Asking the standard questions about spirituality and life goals is a common aspect of dating and the getting-to-know you period in all relationships. Unfortunately, our culture’s aversion to discussing money at all makes broaching financial compatibility much more difficult. But it needs to be done.
As a general guideline, remember that only you can determine the right time to ask these key financial compatibility questions, but they need to be addressed prior to making any major life changes such as cohabitation or marriage. Otherwise, you run the risk of “discovering” the answers once it is too late to “fix” them without personal loss.
Here are the basics that you need to consider:
- What are your financial personalties?
While this mostly addresses your attitudes on spending vs. saving, your willingness to share your finances and work together towards mutually-beneficial goals is also important. As a litmus test, ask your partner to secretly write down how much money he or she would comfortably spend without consulting you and you do the same. Next, reveal the numbers to one another and discuss your reasons and reactions. More than $100 or so difference may spell trouble.
- What are your future plans and goals?
Discussing plans for the future is common in relationships, but do you also address the financial repercussions of those plans? What would it really mean to quit your day job and pursue your passion for writing or to have 5 kids? These are all elements that impact your bottom line and need to be discussed.
- How much debt do you have and of what sort?
Debt is an uncomfortable subject for every one of us, but you need to know how much your partner owes and to whom before you combine finances – especially through marriage since you can inherit that debt. It’s also important to discuss your credit scores and how you can work to build them together if need be.
- How much money do you make?
Like debt, income can be a touchy subject, but if you are going to combine financial lives you need to know how much is coming in. Appearances can be deceiving, so it’s important to get a clear statement of your partner’s income before making decisions such as how much rent you can afford or whether you should sell your car and only use one.
Why Financial Compatibility Is So Important
Being financially-responsible and eliminating debt is an important goal for all people. Some people put this goal as a higher priority than others for a variety of reasons. In the midst of a life-crisis, for example, worrying about every expense causes needless additional stress. However, maintaining control over your spending in general, no matter what is happening, is the only way to stay financially healthy and stable. If you are not there, working towards that goal is not only a sign of “success”, it is a huge stress relief.
When you are in love, overlooking habits that may prevent you from reaching or maintaining your financial goals may be easy, but, over time, those rose colored glasses come off. Sometimes they shatter. Addressing issues with money early on and periodically throughout your relationship is the only way to control your financial future together. Someone who is unwilling or unable to do that may not be ready for a commitment or at least not a commitment with you.
Hard as it is, financial compatibility is an important measure of a relationship’s staying power. While it can be overcome with time and change, choosing to do so is an entirely different form of commitment.