Some people frown upon young folks living together before marriage. Personally, I think it's a good idea. Not only do you get to know the person you might be interested in building a family with better on a personal level, but you also get to know him or her better on a financial level as well.
As a recent article on U.S. New & World Report on the subject noted, "You may think you're a perfect match, but one of the biggest compatibility tests for couples is merging finances. And, sure, it may feel like talking about money will kill your romance, but - and not to sound like your mother - is it really that special of a relationship if discussing credit cards and spending habits could actually kill it?"
I was lucky enough to spend multiple years living with my future wife before I popped the question. And in the process, we got to know each other extremely well when it came to our financial preferences, habits, and quirks. Doing so helped us iron out some important financial issues before we ever tied the knot.
How and where we spend…and save
Knowing a significant other's spending and saving habits can be critical to a successful financial relationship. In our case, we were able to determine that I was more financially conservative, while my wife was a bit more frivolous with her money. However, neither was to the extreme in either direction, and over time, we've balanced each other well, me making my wife a little more conservative and her making me a little freer with my cash.
This has worked out well since my wife has learned more about money, personal finances, and investing through me, and I've been pushed to spend a little more money on things like dinners out, vacations, and family activities outside the home.
Who wears the financial pants in the relationship?
It became obvious relatively quickly that my future wife had little interest in money and personal finances. It wasn't that she threw it away or wasted it, but when it came to saving and investing, she just didn't care all that much. Knowing this, I began to take over the following tasks, making efforts to teach her about such subject matter in the process:
- Creating the family budget
- Tracking expenses
- Diversifying our retirement account investment portfolios
- Balancing the family checkbook and handling our banking matters
In this way, the person who was financially strongest in the relationship handled the financial matters while also strengthening the knowledge of the other person.
Who pays what, when, where, why, and how
In a relationship, it can be tough to pin down a plan for how things get paid, by whom and when. One person might be thinking the other is doing stuff, when the other person is thinking the exact same thing. And in a relationship where financial communication may not be a top priority, finances can get confused and jumbled in a hurry. This is why we came up with a financial plan relatively early in our relationship.
Our plan consisted of the following:
- Keeping money and finances largely separate until marriage (except for our apartment lease)
- Splitting the majority of the bills we shared 50/50 and paying for our own miscellaneous expenses
- Informing one another of any and all major expenses that might be incurred by the other
- Keeping retirement accounts separate through our individual employers
In this way, the financial waters weren't muddied early on in the relationship. This wasn't so much a trust factor as a learning experience. In this way, we each got to see our individual earning and spending power, got a feel for how much things cost, and got to see our own finances ebb and flow over time so that we each had some individual responsibility over our money, whether we wanted it or not. It taught us both to be financially responsible before joining forces, which eliminated many of the issues that married couples face when combining finances too early in a relationship or not doing so in the right way.
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The author is not a licensed financial or relationship professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.
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