Mixing Love And Money
When romance merges with finance, there can be a lot to discuss. I suggest you align on various financial issues before they create misunderstandings or resentment.
Consider these questions:
- Do you bring different assets and liabilities to the relationship? Does one of you have a trust fund, but the other student loans? What is the most equitable approach to balance these differing resources?
- Do you have different incomes? Should you split the living expenses equally, proportionally to your incomes, or in some other manner?
- Do you have different attitudes on saving versus spending? Does one of you prefer to max out a Roth IRA, while the other prefers to travel with all available cash?
- What is your risk tolerance? Does one of you want the safety of federally-insured bank CDs but the other believes in aggressively investing in stocks with a long-term horizon?
- How much do you contribute to charity? Does one of you support the NRA but the other supports the Coalition to Stop Gun Violence? Should you donate to both or neither?
- Do either of you have children from a previous relationship? If so, how do you reconcile the differing commitments?
- How much of your kids’ education do you want to fund?
On the more practical side, review this checklist:
- Do you need a will?
- How much life insurance should you have?
- Have you updated the beneficiaries on your retirement accounts?
- Do you want a joint bank account?
- Do you want a joint credit card? I recommend not to do so.
- If you are married, your taxes may change. You may want to adjust your withholding.
Mixing love and money is a journey, but your relationship will benefit from an explicit and shared understanding of these issues.