Being in sync when it comes to dealing with money is a big plus in any relationship, but it’s not always easy to achieve. Here are some tips to help you and your partner get on the same page financially.

Being in sync when it comes to dealing with money is a big plus in any relationship, but it’s not always easy to achieve. Here are some tips to help you and your partner get on the same page financially, and to do what’s best for each of you, both individually and as a team – no matter what stage your relationship is in.

  1. Newly dating.

  • Always be prepared to pay your share. In the 21st century, whoever invites someone on a date should expect to pay. However, if you accept a date, you should still be prepared to pay your half. Then, give your date the opportunity to either graciously accept or refuse your offer to pay.
  • Cost-sharing apps: Smart dating tool or romance killer?  Cost-sharing apps make splitting expenses easy, but splitting the costs too precisely when on a date can sometimes feel more businesslike than romantic. Communication and context make a big difference. For example, “surprise-Venmo” your sweetie with a spa day or movie night and you’re unlikely to receive complaints about lacking romance.
  1. Long-term relationship.

  • Don’t make any financial commitments together while your partner’s finances are in bad shape relative to yours. Protect yourself by keeping your bank accounts, credit cards, and other accounts separate until your partner has restored his or her financial picture. Do not co-sign loans or undertake any other financial responsibilities on your partner’s behalf, and put off major purchases like a house or a car unless you are comfortable tackling them alone, for now.
  • Help each other develop and practice healthy financial habits. Help each other acquire good money habits by practicing them together. Think of it as a financial buddy system – encourage and support each other to pay bills on or before time; maintain low balances on credit accounts; pay off debt; and review your credit report once a year to confirm that the information is current and accurate (and forestall identity theft).
  1. Engaged.

  • Ask the tough questions. Lay the groundwork for dealing with your shared finances straightforwardly and transparently: ask (and answer) these tough questions up front. For example:
    • What’s in your credit report? Few of us has a perfect history with money; it’s how we learn from our mistakes and move forward that matters. Take the time to resolve any credit issues fully before you open any new accounts together.
    • Are you carrying significant debt? Debt can put a big strain on a marriage. And, although legally you’re not liable for debt your spouse had before you got married, realistically, once you’re married, you will likely be involved in paying off your spouse’s debts. That’s why it’s important to be open with about how much you owe before you get married. This way, there are no surprises – you’re building trust and teamwork by deciding together how to handle debt that’s still on the books.
  • Decide whether you need a prenup.
    • The context of a prenuptial agreement should be: How to do we protect and provide for our extended families? A prenup can ensure that your estate plan will not be challenged by your surviving spouse; it can ensure that property will pass to your children from a prior relationship (without one, your entire estate could pass to your new spouse); and it lets one spouse waive rights to the other spouse’s life insurance or retirement benefits – so that each of you can make your respective children the beneficiaries.
    • If you don’t have children from previous relationships, a prenup is much less important. After all, aside from the powerful romantic and emotional reasons you get married, you are probably also getting married in part to reap the financial benefits of the married state – i.e., to take advantage of the economies of scale and to build wealth together. A prenup may end up being limiting and counterproductive.
  1. Newly married/shared finances.

  • Update the beneficiary of your life insurance, retirement and other accounts. Too many people neglect to update beneficiary designations after they marry or re-marry. Community property states may give your spouse some rights to your life insurance automatically, and some states have laws that automatically revoke beneficiary designations to ex-spouses once divorces are final-but you can’t rely on state laws to protect you in every situation. To avoid potential confusion, it’s best to review and update your beneficiaries on your will, life insurance, retirement and other accounts.
  • Schedule regular conversations about money. You don’t have to have a specific question or project to tackle. Before financial issues arise, share your history with money; discuss and reconcile your spending habits; and share your expectations and goals for your money. Set aside a regular time every month (call it a Financial Date Night) to assign money-related tasks, talk about future financial decisions, and review progress toward your long-term goals. Investing time and effort up front to get your joint financial house in order will free you to enjoy your new life together as fully as possible.
  1. Divorce.

  • Reach out to a trusted adviser for support. A trusted adviser can lend you the clarity and energy you need right now, and guide you safely through the emotional minefield of divorce toward financial decisions that honor your priorities and long-term goals. A friend who has been through a divorce him- or herself may even recommend a great divorce attorney or divorce financial planner.
  • When making financial decisions, first do the math, then be brutally honest with yourself. For example, will you have enough future income to maintain the house? Remember, maintaining the house means more than paying the mortgage; it means covering utilities, upkeep, and repairs as well. Once you set aside your emotional attachment to the family home, you may realize that moving to a small condo is best for your peace of mind.
  • Rent or buy? In many cases, a mortgage payment is a form of savings because it increases your “equity” in your home. Renters are not able to build equity with their monthly payments. However, many of the arguments for home ownership are turned upside down when you are going through a divorce. This is the time to keep expenses low and long-term commitments to a minimum while you stabilize your income and all of the other aspects of your life. It’s most likely a time to stay flexible and mobile and low cost, which is what most rentals allow you to do.
  1. Married for decades/Empty nest.

  • Trim expenses—including support of adult children—to better prepare for retirement. With the mortgage likely paid and the kids out of the house, you are in a position to take actions that will go a long way toward setting you up for long-term financial security. To boost your retirement savings appropriately, you may need to rethink your current priorities—including taking the difficult step of reducing or even eliminating financial assistance to adult children. Think of it as putting the oxygen mask on your face first. It may feel counter-intuitive, but, after all, your security in retirement is something your children want for you, too. Be sure to max out all retirement vehicles available to you. Take advantage of “catch up” contributions available through your employer and for your IRA.
  • Keep or pay off your mortgage? It depends. Conventional wisdom tells us to pay off our mortgage before retiring, but if your rate is less than 5% and you can afford to make your mortgage payments from guaranteed-income sources in retirement, you may be better off investing the money you would have put toward the loan.

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