Valentines Day is a day that circles round every year and it’s one of the biggest ways to show appreciate your loved one. But it's also an opportunity to remind yourself that one of the biggest financial decisions you will ever make is your choice of partner. It might feel shallow to think of it this way, but in the same way you filter through the men based on your attraction towards them, whether you share the same interest inHarry Potter, or how they choose to spend their weekend, one of the biggest that is often overlooked is their financial outlook.
So at first glance, it might seem shallow to think of it this way. But your choice of financial partner dictates the overall trajectory of your life. Life decisions are riddled with decisions around money – whether it’s as small as splitting the bill on the first date or how to split finances when you decide to take your first vacation. But if you’re seriously going to consider someone in the long-term, and where the financial burdens of life start to creep in, then one thing’s for certain – you need to be aligned financially.
Because if you’re going to take the conventional approach that many of us subscribe to (buying homes, getting married, having children, saving for retirement) then you need to be on the same financial page. Money is going to be an issue in your relationship whether you want it to be or not – that’s a fact.
If you're actively dating however, there is nothing wrong with scoping out financial awareness and compatibility of a potential partner. They might be doing the same to you! Damona Hoffman, OkCupid Dating Coach andHost of The Dates & Mates Podcast, suggests “daters who get better with their money will naturally attract better dating prospects because it is still one of the primary attractors in our society.” During the pandemic, OkCupid (an online dating site) actually found that the importance of wealth and financial management has steadily gone up, as the need for financial stability has become increasingly important to those looking for a partner.
Why talking about money matters
In an age when taboos around money continue to permeate society, many young couples find that discussing their finances hard. This is a detriment to our relationships. Why? Well according to a survey conducted by Ramsey Solutions, fights revolving around money are the second leading cause of divorces in the US alone. And what’s worse, is that when married couples do decide to call it quits on their relationship, 74% of women discover nasty financial surprises after a divorce or death of a spouse. These are not situations you’d want to find yourself in later down the line.
So how can you save yourself the heartbreak and headache when that later down the line reaches? Well, isn’t it obvious by now? It’s to start talking about money. Broaching the subject with your partner can feel a little daunting at the start, but according to TD Bank's Second Annual Love & Money Survey, couples of all ages are happier when they talk about money. And additional research from North Carolina State University suggests that working as a team and becoming financially literate can help.
How money impacts relationships
Choosing your partner is the choosing the life you want to lead. You might have goals to reach, dreams to conquer, and desires for your long-term future. Again, you need the financial means to get there. And when a couple joins forces to build a life together, money plays a crucial role at every stage:
Finance is romance....right?
Moving in together
Living under the same roof meansyour finances must work in harmony with your relationship. Consider the following:
- Should you set up joint accounts? Or do you prefer having separate accounts?
- Do you have joint budgets?
- How should your expenses be split between you?
- How are your things and home insured?
- It’s also worth ensuring that both names are on the tenancy agreement, to ensure equality in terms of ownership.
Buying a house or apartment together
When buying your first home or apartment together, you should:
- Look into the finances: A deposit or down payment is often required to purchase a property.
- Discuss the implications of getting a mortgage: A mortgage is necessary to buy a home, so working out what that entails financially for both of you is a must.
- Decide how the asset will be allocated in the event of a separation/divorce: There are different ways to ensure financial security, so ensure you know how this would look.
There are significant extra costs and expenses to consider if you start a family.
- Equipment: From prams to nappies, all these things incur extra monthly costs.
- Events: One time events, such as religious ceremonies or birthday parties - they don’t come cheap!
- Insurance status: Consider whether your current insurance can be used for your children.
Silence is silver but talking is gold
As well as not talking about finances, 80% of women die single and 74% of women discover negative financial surprises after a divorce or death of their spouse. Not surprisingly, a survey from UBS found that 76% of widows or divorcees wish they had been more involved in long-term financial decisions while they were married, rather than having to navigate them as they were coping with such significant life changes. Playing an active part in your finances, both your own and shared ones, is key to securing your future.
It starts with you
In order to have a healthy conversation about finances, you need to have an overview of where your personal finances are at. It can be helpful to take a meeting with yourself, sit down and get a full financial lowdown. Include your current incomings and out goings, as well as a more detailed look at your budget.Assess any debts you’ve got, as well as any investments, including your pension. Note down some of your influencing factors, like children or dependents, as well as any financial goals you might be considering within the overview.
Awareness of how money can be a tool in helping you to reach your goals, both in the short and long run. Financial literacy and practical knowledge of economic and financial topics that are relevant to your decisions. Trust within yourself and knowing where and when to turn for help.
So whilst Valentines Day is a great way to reflect and appreciate the relationships we have in our lives, it also provides an ample opportunity to look at our relationships head on and figure out how talking about money in our own can be the recipe to a brighter future together. It also helps to consider that when we choose our partners, how crucial it is to be on the same financial page. That doesn’t mean choosing a partner on their income (now that would be shallow), but asking yourself the crucial questions: Can I see this person and I agreeing on financial decisions? Is this someone I can talk to openly and honestly about money? Because remember, money plays a crucial part in our relationships. And if we can get the money part right, the rest will follow.