Are you ready to take your relationship to the next level, for richer or for poorer? It may be time to discuss your finances with your partner. It isn’t the most romantic advice, but to avoid relationship problems down the road it is important to have “the talk” before things start getting more serious.
What to Talk About
It’s important to discuss debt with your partner before making any long-term commitments. Be honest about the amount of debt you may have in order to come up with a realistic plan to pay it off together. Depending on the circumstances you may find it’s best to continue to pay off debts individually as opposed to combining them. Consider your debt a small price to pay for a lifetime of love!
Your Bank Accounts
If you are deciding to merge bank accounts, make sure you and your partner are willing to get rid of the “it’s my money” mentality. Once combined, your assets should be viewed as ours instead of mine. Whether you share accounts or not, stay conscious about how you and your partner spend. If one of you is a big time saver and the other is an over-spender, it could cause many heated arguments in the future. Try to build a plan that can cater to both lifestyles, like maybe fitting in a small shopping budget while still adding to your savings account each month. If both you and your partner are both big spenders, consider discussing your long-term financial goals and what sacrifices you may need to make in order to get there.
While other aspects of your relationship may be becoming one, your credit score will always be yours. Since your credit report is tied to your social security number, it will always remain separate. However, while the reports are separate, anything from a joint account can affect both of your credit scores. You should work together to improve each other’s scores if you are hoping to make any major purchases, such as a home. The lender will look at both scores and while yours may be high, your partner’s lower score may impact your rates.
Sources: www.thebalance.com www.huffingtonpost.com