18 Aug
- “Do they participate in their company retirement plan like a 401K plan?”
“You may also want to talk to them about their financial goals to see if they are similar to your own financial goals,” she added. If your goals are very different, this may not be a good sign for future success as a couple.”
If this sounds like a lot, well, that’s because it is. This conversation isn’t worth having even though it’s hard; it’s worth having because it’s hard.
“For many people, this is an overwhelming conversation, so you may want to consider meeting with an objective third party, like a financial advisor,” said Nostrom. “This may be a good first step and definitely worth your time to make sure that you know the finances of the person you may be spending the rest of your life with.
“It is better to know the situation, good or bad, to make sure you are going into a long term commitment with your eyes wide open.”
Consider dividing up your living expenses.
Florida attorney Miguel A. Suro, who also blogs about lifestyle and personal finance topics at RichMiser, had some great advice to help partners with different incomes levels decide whether to bridge the gap or go their separate ways:
“If you are accustomed to or expect an expensive lifestyle. If your partner’s lower income will make that lifestyle unattainable, be very sure that you are fine with that,” he said.
“If there is a large income disparity between partners (and you are the higher-income partner), be sure that you will be happy making the biggest contribution to your household’s finances. Financially supporting a partner against your wishes can be a major source of tension and resentment in a relationship.
“Conversely,” added Suro, “if you are the lower-income partner, be sure that you can accept that you will contribute less to household finances.”
“Talk to your partner about how you’d divide living expenses. Early in a relationship, it’s reasonable for each person to pay half. But in a long-term relationship, especially a marriage, you’re in this together and you need to be equal partners, even if your incomes are different.
“In sum,” he concluded, “running a household is very hard, and fighting over money can lead to an unraveling relationship. So, talk it other over extensively before marriage or cohabitation, and make very sure that you’re both on the same page before making a deeper commitment”
Whitney recommended using joint and separate bank accounts to help couples navigate between shared financial responsibilities and their own financial independence:
“I often suggest that couples have a joint account for most expenses, like mortgage and utilities, and also smaller, separate accounts for personal expenses like clothes, gifts for each other, and hobbies,” she said.
“Each partner should have the same monthly amount in their personal account regardless of earnings because you’re equal partners. This approach lets you work as a team for most things but also gives you the ability to make individual spending choices.”
Don’t forget to factor in their debt.
Don’t let a focus on your partner’s income blind you to other important financial factors: Namely, how much debt they owe. Bringing home a larger income while carrying an even larger debt load is something you’ll need to figure out
“Another thing to be aware of is the debt that your partner has, and you should be honest about your own,” said Germano. “Debt can significantly impact the decisions you’re able to make in your life, so you’ll want to be fully informed.”