My guess is that you place a high value of understanding everything you can about finance. But what good is having great financial skills if the person you spend your life with is on another financial planet and you don’t have a financially compatible relationship? Not much.
No matter how smart you are, if your spouse has other money ideas, you are going to struggle. In the worst case, you’ll acquiesce to their financial ignorance. In the best case, you’ll steer the financial ship to safe waters – but encounter arguments and stress all the days of your life together. Neither scenario is very attractive if you ask me. For that reason, it’s important to know if you and your honey are together on money. And the sooner you figure this out, the better.
How do you know if you are both on the same page?
Forget about what your partner says about money. How does he act around the cash? Is he in debt? Check his credit score. Is it in the toilet? Why? How long has had this problem? If your partner always seems to be under water financially, what makes you think it’s ever going to change? You better have a very good reason to base your optimism on. By itself, these bad behaviors never change.
Watch your significant other’s spending, saving and investment behaviors too. Get a full picture (good and bad). And while you are at it, invite your significant other to consider if he thinks you are compatible with him or not. If nothing else, see how he reacts to your suggestion to go through this exercise.
If he is not interested in doing this exercise, it speaks volumes about his financial aptitude and awareness. Unfortunately, if he doesn’t care, you may have your answer about compatibility right there.
Once you’ve had ample time to obverse his/hers financial behavior, have a pow-wow. Ask him to clarify why he does certain things that you identity as particularly hurtful to your financial future. Of course there may be a good reason and you should be open minded. But don’t accept excuses either. If you observe bad patterns like chronic debt, short-lived careers and poor financial planning skills, there is a problem and it’s not going to cure itself. Address it.
3. Clarify Goals
With a clean slate in your mind, share your long-term financial goals and financial plan. Ask your counterpart about his long-term goals. And ask him how he plans to achieve those goals. His plan doesn’t have to be iron clad plan replete with spreadsheets and graphs. But it should sound reasonable.
For example, if your boyfriend tells you that one of his goals is to get out of debt ask him how he’s going to do it and by when. If he tells you that he’s going to get a second job, work extra hours or ask for a raise (and cut his spending at the same time) you just might have a winner on your hands. If on the other hand he has no plan or comes back with a half-backed plan that doesn’t have much meat on the bone, consider that a huge red flag and a sign that you may have to make some changes.
Based on the plan your partner presents, project out what is likely to come about. Think about the good, average and poor outcomes that may result from your plan.
For example, Amy told her husband that she was going to get out of debt by going back to school to learn court reporting and work part time. On the face of it, that sounded pretty good
But when George asked her what court reporters make and how court reporters find work and what the demand was for such folks, Amy didn’t know. That meant she really didn’t do her homework . As a result, George understood that this was just another episode in Amy’s long history of bad planning, lazy thinking and short-term career moves bound for failure. In fact, since the course that Amy wanted to take was expensive, such a move could put Amy and George further in debt rather than help them climb out of it.
At the end of day, money is far from the most important thing in life. But when it comes to relationships, money is the river that floats the love boat. Without enough financial resources and without agreement on which direction your personal love boat is going, it’s bound to end up crashed on the rocks.
Look for a way to compromise. You don’t have to reach Kardashian style net worth. You can certainly compromise on your lifestyle and spending. But you must have a plan. The plan must include a spending budget and a monthly savings number. Above all, the plan must include a way out of debt once and for all. Your first order of business as a couple is to get your financial ship sound.
If you cannot agree on these three items, my suggestion is to go no further in the relationship until you do come to agreement and implement a plan. This may sound like a bitter pill to swallow. But it is far less painful than having a financially ruinous relationship that saps all the love and peace out of your life for years to come.
Are you financially compatible with your partner? How do you know? Did you ever have to overcome these kinds of issues? How did you do it?