Financial Compatibility: Talk before tying the knot!

Source:kclau.com
I came across an article talking about financial compatibility, advising couples in a relationship to find out whether they are financially compatible or not. Experts say it is important to do this even before tying the knot. This is a practical advice as money disagreements have been cited to be the number two reason why a lot of couples get divorced.

What the experts say

According to financial expert Philip DeMuth, part author of the book “The Little Book of Investing Do’s and Don’ts”, take notice of how your partner deals with money right from the beginning of the relationship. Pay attention to how money is handled during the first few dates. It is not a good sign if your potential partner throws money around just to impress you. Having lots of money is not an excuse to spend crazily taking Warren Buffet as an example.

If your partner likes to use cash to settle payments, it may indicate that he is careful about credit card debt. On the other hand, it could also mean that he has had his cards cancelled. If you want to find out the real situation – ask! At the same time, look out for signs indicating financial stability in your potential partner. Two signs of financial stability are being a homeowner and staying at a workplace or sticking to a job for a long period.

After marriage, couples should continue to keep track of each other’s finances. Jacquette Timmons, the author of “Financial Intimacy: How to Create a Healthy Relationship with Your Money and Your Mate”, suggests that couples discuss about money regularly to avoid problems especially concerning big purchases like buying a house.

Timmons also suggests talking about the various issues of money, i.e. “earning, saving, investing and spending.” During the discussions, take note which area you and your partner agree and disagree.

According to Manisha Thakor, author of “Get Financially Naked: How to Talk Money with Your Honey”, couples may find it tough to be open about money even knowing the importance of it.

To overcome communication barriers, Ryan Himmel, a certified public accountant offers the following tips:

• Open up about your past personal financial mistakes

• Choose an appropriate time to talk about money, not after one partner just had a difficult day at work

• Appoint a financial advisor to get a neutral third party opinion

• Use the word “we” rather than “you” or “me” to promote team effort

Lastly, if your potential partner refuses to talk or open up, DeMuth’s advice is to run away or break off from the relationship.

Reference source: www.forbes.com