As if discovering the love of your life is messier than you thought, doesn’t really love jazz or is chronically late weren’t enough, couples also have to find ways to deal with differing financial habits — from the merely annoying (sending dollar bills through the laundry) to the serious (hiding debt).
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The good news is more couples are getting a running start at understanding how the other person deals with money. Money coach and author Gail Perry-Mason said that when she was younger, people wanted to know what a potential partner’s astrological sign was, not what their credit profile looked like. Today, bad credit can limit your appeal with a prospective mate.
Perry-Mason said a credit report can tell you a little something about character — whether you honor your obligations and pay your bills as agreed. Partly, it comes down to how skilled you are at handling financial tools. And often you learn as you go, sometimes from your mistakes. But if you’re working with a partner, you’re going to have to learn to work as a team, or maybe as a business. “We cannot run our families like a nonprofit,” she says. “There are no grants.”
She said she has encountered couples who feel trapped by finances — with both names on a mortgage on a house that’s underwater, for example. In a situation like that, the stress can make it harder to make good decisions or to feel motivated to even try to work as a team. She recommends seeking advice from a third party — something she thinks is useful even for couples in a healthy marriage, and perhaps especially if they agree 100% on financial issues (a sure sign someone is lying, Perry-Mason says). Think of it as a team with a coach. A third party brings in a new perspective, she said.
While there are lots of ways to get to the finish line, there are a few habits that are big danger signs and need to be faced, and hopefully corrected, right away, Perry-Mason says.
1. Lying or Keeping Secrets
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The one thing couples absolutely must do is to come together and be honest, she says. It sounds simple, but it may not be. Many of us have some financial secrets, from fudging the truth about a purchase that was “on sale” to not knowing how to reveal a long-held secret that could harm the relationship. Or just not wanting to admit that you misplaced a bill, and now you’ll be hit with late fees — because you screwed up. She suggests tracking spending together with Mint.com, which she says “is like a tracking device” for your money. You might not want to calculate for yourself how much you spent on Groupon deals last month, or just exactly how many trips to Starbucks you made, but coming clean can help you both figure out where you are now and where you want to go as a couple. “Married couples need to learn to speak French,” Perry-Mason says, “they need to say ‘we’ (oui).”
By the same token, some couples agree to each have some personal spending money, and that’s fine. What is not fine is having a secret account your spouse has no knowledge of or running to the mailbox to intercept bills.
One way to get more financially intimate? Bare your credit scores (you can get two credit scores for free once a month at Credit.com). Share your free annual credit reports with each other, too. If you don’t love what you see, you can set goals and work together on building your credit, or help the spouse with the lower credit score raise it. You can also find further motivation by seeing how much your credit could affect the cost of debt over your lifetime with this calculator.
2. Keeping Score
And forget about making things entirely equitable. “You’ll never make exactly the same amount of money, do the same number of dishes or take out the trash the same number of times,” she says. Accept that it’s impossible to quantify precisely what a partner’s contributions are. Being paid more money shouldn’t give one spouse more votes in family decisions than, say, being the one who has the pediatrician on speed dial. It’s a team, money’s a tool, and the person who picks up the tools doesn’t automatically get a bigger say in how the tools are used. It’s not “yours, mine and ours,” she says. “If one of you gets a bonus at work, we got a bonus.” By the same token, if one person becomes unemployed, both parties adjust spending and saving. Everyone needs what Perry-Mason calls “financial dignity.”
You’re one team, and you’re encouraging each other. If one spouse is better at organization and bill-paying, let that person do it. But the other person shouldn’t go around with blinders on. Perry-Mason recommends a “mind your own business” day when you discuss weekly finances. Or make it a money date, using Groupon, 50% off restaurant coupons or other savings sites to have a friendly competition on who can plan the cheapest, most fun evening out. (So if you find it hard to resist keeping score, do it this way.) Other ways to measure progress of your team — use apps such as hip2save and checkout51 to see how much you can save — though remember that it’s saving only if you would have bought the item anyway.
3. Untreated Gambling or Other Addictive Behavior
If one partner has an addiction that is making money disappear and making their agreements about money meaningless, discussions and promises aren’t going to help. Only when the person is sober and able to face and deal with financial truths will you be able fix the money problems.
Other habits may be potentially expensive (being disorganized enough so late payments result in poor credit), but if you work as a team, you may be able to minimize the impact by having the more organized partner pay the bills. Still other habits (laundering dollar bills, shopping without a list, Starbucks) may be nuisance habits one person decides to ignore, assuming they don’t cause financial hardship. The very best habits are regular, clear and open communication about spending priorities and the discipline to build what Perry-Mason calls a “working family hedge fund.” Other people call it an emergency fund. “It’s whatever we need to get ahead — so it’s a hedge against unemployment and more,” she said. But, as with relationships, if you want it to last, you have to put in more than you take out.
Mostly, what couples need is a “willingness to listen and work it out,” Perry-Mason says. “I really believe the couple who saves together stays together.”
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Gerri Detweiler is Credit.com's Director of Consumer Education. She focuses on helping people understand their credit and debt, and writes about those issues, as well as financial legislation, budgeting, debt recovery and savings strategies. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.com. More by Gerri Detweiler