Couples often avoid conversations related to finances because they can be uncomfortable, but there are many reasons why they should. Studies have shown that that disagreements over money have been strongly associated with divorce. One way to avoid these disagreements is to have financial-related conversations early.
“Many couples never speak in great detail about these topics ahead of time, so when curve-balls happen they then have to scramble,” Nicholas Stuller, founder of My Perfect Financial Advisor told Madame Noire. “These conversations can be emotionally tough, which is why it can be very helpful to have a financial advisor engaged to be an objective voice in not only creating a conversation list, but a third-party to opine on best practices for a couple.”
Here are six conversations you’ll want to be sure to have with your partner:
Having a decent amount of money tucked away for a rainy day is essential to the financial health of any couple. All couples should have a solid savings plan established and they should be clear on how much each party will be contributing on a regular basis.
While most people don’t like to discuss death, it’s important for couples to discuss how the surviving partner and children will live in the event that one party passes away.
“Couples hate to discuss death because it challenges their mortality. It’s important though because death puts the children and the surviving parent at financial risk,” explained financial specialist Pamela Rogers. “By applying for a life insurance policy great enough to cover the loss of one parent’s income, families can ensure that their finances won’t be compromised in the event of tragedy.”
Plans for the future
“Couples need to have a clear picture of what each person wants individually and as a unit. Clarity brings understanding and robust conversations that will lead to clear expectations,” says Zaneilia Harris, President & Financial Advisor at Harris & Harris Wealth Management.
“Couples need to share expectations around how much they want to spend on their children. Part of the conversation should center around the activities and supplemental support they want to provide for their kids, along with the associated costs,” Harris added. “Having these conversations early, can prevent difficult discussions in the future.”
“Your credit score is one of the most important numbers in your financial life. It goes a long way towards determining whether or not you get approved for credit cards and other loans, and it can even affect your ability to get a job, apartment, or cell phone plan,” advised Ted Rossman, Industry Analyst at CreditCards.com “You and your spouse should know each other’s credit scores and work together to improve them if needed. Everyone has their own credit score – they don’t get combined in a marriage – but if you’re applying for joint credit, like a mortgage, one person’s bad score can torpedo the entire process.”
“Your debt factors into your credit score. I think it deserves special attention because it plays a major role in your future. If you have a lot of debt, it’s much harder to do everything from traveling to buying a home and raising kids,” adds Rossman. “About 1 in 8 Americans keep debt secret from their partner; that can lead to hurt feelings and derail future goals. It’s much better to be upfront and honest. If there are challenges, work on them together. It’s a lot easier to deal with student loans or credit card debt when you’re pulling in the same direction and facing the problem head-on.”