The Money Couple on when to broach the money topic and how to test the transparency waters.
"Eventually, money affects every part of a romantic relationship. Where you live, where you eat, where you vacation, where your kids go to school and what car you drop them off in," says Bethany Palmer of The Money Couple, who co-wrote First Comes Love, Then Comes Marriage with her husband. The tricky part is knowing at what point financial matters should enter your relationship and how to broach the topic.
"Finances are an intimate part of life and you may get resistance when you first mention the topic. You don't want to jump the gun and talk about money on your first date. But at the point when you decide to take the relationship further, maybe three dates in, you can start making spending observations," says Palmer. "A year is way too long to wait. You're in deep at that point. It will be too hard to talk about finances for the first time then. And if there's disagreement on money issues it will be tougher to end the relationship at that point."
Shopaholic. Tight-fisted saver. Risky stock marketeer. Impulse spender. If your relationship to money and financial goals differ drastically from those of your romantic partner, this could lead to money clashes down the road when it's time to share bank accounts and credit cards. "The older generation was unlikely to discuss money openly in relationships. But the dynamic of our families is changing. Couples want more transparency. A lot of divorce happened over money issues, so it makes sense to talk about these things before getting married," says Palmer. Here are Palmer's four tips on how to discuss finances with your partner in a non-threatening way.
1) First, silently observe spending habits. On the first couple of dates you'll know what kind of spender he or she is. Does he order three appetizers, the priciest entree and a dessert? Or does he whip out a coupon, the telltale sign of a fastidious saver? Maybe he's thrifty and you are too. Maybe he's a big spender, taking you to nice dinners, buying flowers. This can be charming but is he going into credit-card debt to buy these things and would he still be doing this once married with a mortgage and two kids? "There's no good or bad type of money style," says Palmer, "what you're looking for are money tendencies and compatibilities. You're observing a person's spending habits. You'll see their priorities by seeing where they put their money." Watch: Recession Romance Ideas
2) Ask questions, avoid assumptions. Flashing a wad of cash does not make a person financially solid as a rock, says Palmer. Just because a person earns a large salary does not mean he or she doesn't have a mountain of debt, too, or that he or she isn't living above means. Even a person who is financially stable on the surface may not remember to pay the bills on time. Once you get to a point where you are getting more serious in a relationship, ask your partner about his or her financial goals. Don't judge. What matters is not if a person does or does not have debt. Instead, ask your partner what his or her plan to pay it off is.
3) Time it wisely. Use good judgment. Don't jump into money topics on your first date. "It's a personal subject and you want to be sensitive," says Palmer. "Keep the conversation light. Don't let it get too heavy. Talk about your dreams and what kind of financial goals you have to set to be able to achieve those dreams. What's key, too, is if you see red flags, not to ignore them."Read: Recession-Friendly Honeymoons
4) Tune into reactions. Is your partner willing to engage in the discussion with you or is there push-back? If your partner does not want to talk about money with you at all, under any circumstance, something may not be quite right. If he or she is scared to tell you about his or her salary, how much is typically spent on a shopping spree or how much debt has been accrued this may be a red flag. "It's okay if your partner says he or she would like to wait a few months before talking about financial matters. Just don't let the topic fall off the table forever," says Palmer. "Mention to your partner that you are looking for full transparency in money matters and why this is important to you."