What's the first thing your girlfriends ask you when you meet that someone special, especially after going through a divorce? They typically ask you if you are emotionally compatible, spiritually compatible, or and/or physically compatible. But do they ever ask you if you are financially compatible? Probably not.
This is incredibly ironic given that time and again money is cited as #1 cause of fights, #1 cause of divorce, and top source of general life stress. The reality is dealing with the subject right front can prevent a mountain of heartache down the road.
When you think your new relationship is heading to the next level (so not on date two but when discussing moving in or marriage) it's time to "get financially naked" with each other. The point is that if you are willing to take your clothes off with someone in one way, you should be willing to take your clothes off with them financially as well. Specifically, we recommend exchanging a list of what you own, what you owe and your credit scores.
Light some candles, put on some soothing music and talk about how money was (or wasn't!) talked about as you were growing up. This is also a great time to talk about your life and financial priorities. This conversation will likely be awkward at first, but over the long run you'll be amazed at how it can really bring you closer. If you're not sure how to bring the subject up, say you read about it on Firstwivesworld!
If you do get re-married, the conversation about money should continue. We recommend minimum annual financial check-ups where you review the state of your household finances. Items to be discussed in addition to what you own, owe, and your current credit scores include whether you've met this year's savings goals, if you need to make any adjustments to your household budget, and where all your important documents are stored. If one of you takes primary responsibility for the household finances on a day-to-day basis, this is the time to make sure the other partner knows exactly what's going on with the investments and other key decisions.
A few last tips:
If using joint accounts, set a dollar amount above which you agree to consult each other before spending (or alternatively an amount each can spend no questions asked). If you do financial 3-way (mine, yours, ours) be extra clear on what's "ours".
- Always keep one credit card on which you are the primary account holder and pay it off on time and in full to establish your own credit history.
- If you are a stay at home mom, insist on a fully funding your spousal IRA.
- Don't shy away from prenups to protect any assets you come to your new marriage with!
Don't let money be a source of tension with your honey — break through the ice with this advice and let the love shine on!
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