Suze Orman Money Matters

Given that we're heading into the high season for weddings, I want to discuss your relationship.

Actually, it's a three-way conversation between you, your significant other, and your money. How you handle money is going to weigh heavily on your relationship. Just ask any divorced friends or family; it's pretty common for money issues to be at or near the top of reasons for a breakup.

But what's even more troubling are all the unhappy couples who are still together, and still fighting bitterly over money. I don't have to know you and your partner to tell you that the surest way to become closer and replace relationship stress with happiness is to get on board about how to talk about, learn about, and deal with money as a couple.

No Wishing Allowed

When people in a relationship spill the beans about some sort of money issue that's making for an unhappy partnership, it invariably takes me only about a minute to find out that the specific problem has been an issue practically since the day the couple got together. Yet when I ask why they didn't tackle the problem early on, I get the same answer: "Oh, we were so in love, and I just figured he/she would change."

Denial isn't exactly a strong tool for relationship management. Nor is simply closing your eyes to the problem and wishing your loved one will change, or will want to change. If you know there's a problem now, I guarantee it's only going to become a bigger problem later on if you don't address it.

What keeps people from talking about the money stuff is a fear of confrontation. That makes perfect sense, but why frame it as a confrontation in the first place? If someone can't see their way to having a supportive, open conversation about money habits and differences, it may be folly to think their relationship will last.

To Love, Honor, and Tell the Truth

If you're troubled by your partner's money habits, bring compassion into the conversation. My experience is that most people who don't respect money have a bigger problem: They don't respect themselves. How we treat money is symptomatic of how we feel about ourselves. If you're in a relationship with someone who doesn't handle money properly, the challenge is to create a supportive environment in which you both can take a look at the deeper issues that are manifesting themselves as poor money choices.

It amazes me how often people -- OK, it tends to be women -- tell me about some money move their partner made that upsets them or makes them nervous. Or how many people tell me they keep hidden bank accounts or pay for splurges with cash so the purchase doesn't show up on the joint credit card bill.

You want a lasting relationship? Tell the truth. Anything less is disrespectful of you, your partner, and the relationship.

Separate Isn't Equal

Don't think you can solve your money differences by keeping all your money separate, either. That's just code for "I don't trust you."

Here's my strategy for how to merge finances in a relationship. It needs to be a three-part dance of "ours, mine, and yours." First comes "ours":

• Ours is a joint checking account and joint credit card from which all living expenses are paid.

• Ours is a joint savings account in which we build up a stash equal to eight months of living expenses.

• Ours is combined long-term investments for retirement.

Apart Together

From there, move onto "mine" and "yours." These are the separate accounts each of you keeps, and are just as vital as the merged accounts.

I'm a big believer that each person in a couple should always have a savings account in their own name. I'm not suggesting that you hide it from your partner -- anything but. The idea is that once you've merged your finances, you each respect the right and need of the other to have some financial independence, too. I also think it's smart to have a separate checking account so you can each pay for your personal indulgences, be it gadgets or shoes.

Again, the idea here is that once you fully fund all your joint commitments, it's perfectly fine -- and healthy -- to divide what's left over and give your partner the freedom to spend or save that money as he or she wishes. A little separation can keep you together.

Each of you should also maintain one credit card that's solely in your name. Without that, you have no credit record that's yours alone; in the event that you divorce, separate, or are widowed, that's going to leave you in a horrendous financial fix -- you won't be able to qualify for the best rates on loans, and may even be turned down flat. You'll also find that you need to make hefty deposits to open basic utility accounts or get a cell phone in your name, and it can even impact your car insurance rate.

Stay-at-Home-Parent Rules

The calendar may say it's the 21st century, but a lot of couples are still in the Dark Ages over how to handle money when one partner earns an income and the other doesn't.

Notice I didn't write "when one partner works and the other doesn't." Raising kids meets every definition of work. To belittle it because it doesn't create income is -- here's that word again -- disrespectful.

The all-too-common problem is that an odd dynamic builds in which the stay-at-home parent thinks she (or he) has to ask for money, or ask if it's OK to buy something. The "ours, mine, and yours" strategy should keep this from occurring in your family.

If money still remains a divisive issue, I have news for you: It's not the money. Instead, there's likely a serious disconnect between the two of you about the value of having one of you  be a stay-at-home parent. Again, this needs to be honestly discussed. You both need to be open to the idea that what worked a few years ago might not work now. Given the tougher economic times we face today, the financial reality may be that your family needs both of you to earn an income.

Get It in Writing

If you have yet to marry, I strongly recommend a prenuptial agreement. For those of you who are contemplating remarrying, you're absolutely nuts to tie the knot again without carefully documenting the assets you have prior to the marriage.

Moreover, one of the most loving gestures you can ever make to your partner is to ensure that you have all the legal documents in place to make things easier when one of you becomes ill or dies. You both need an advance directive that lays out your medical care wishes if you become unable to speak for yourself. Those of you who are together but not married should also make sure you each have a durable power of attorney for health care, or a health care proxy, set up. This designates who "speaks" for you if you're unable to communicate your health care wishes. Without this in place, unmarried partners can find themselves unable to take care of their loved one.

And don't think a will is all you need. A living revocable trust that has an incapacity clause is hands-down the best way to take care of your family.