Say Yes to Less Stress: Advice for a Financially Healthy Marriage

by Brian Valz, Hanover Community Branch Manager

Are you ready to take the next step with your significant other and start planning the rest of your life together? Let me tell you… there’s nothing less romantic than discussing your FICO score, credit card balances, or creating a budget. But while most couples would rather discuss an upcoming trip, where to eat dinner Saturday night, or  (eventually!) wedding locations and cake decorations, having open and honest conversations about finances and other important matters can have a far greater impact on the strength of a relationship. That way, there’ll be many more trips and romantic dinners for years to come, not to mention that dream wedding.

Financial stress can be the source of major discord in any relationship, so it’s important to tackle the difficult questions early on.  I’ve compiled a list of ten questions, from my own experience and with members I’ve been able to serve over the years, to help new couples take a proactive approach to financial health that can really guide the overall path of their relationship. Learning as much as possible about your partner’s financial outlook and habits is vital, as is having a deeper understanding of your own. Here are some questions that all couples, regardless of age, should ask before taking their relationship to the next level.

10 Financial Questions to Discuss with your Partner

What are your current expenses?

It is important for couples to focus not only on the amount they spend, but also on the interest rates of outstanding debts. For example, a credit card with a high variable rate may require more from your budget than one with a lower fixed rate. Perhaps some debts could be consolidated to help a couple’s overall cash flow. Has it been over a year since a car was financed? An interest rate review might find savings by refinancing. If one person in a relationship has better credit, it’s worth considering if a loan could help pay off their partner’s more costly debts. These are just a few factors to consider when evaluating overall expenses.

Have you shopped your auto and homeowner’s insurance in the past year?

For a couple just getting started, this can provide significant monthly savings. In many cases, a full insurance review hasn’t been conducted in several years, and you might be possible to get greater coverage and a lower rate. We recommend that couples review their insurance options once a year to ensure they’re getting the best rate available.

Are there any credit challenges?

Being honest with your significant other. Have you paid late in the past? Have there been other “credit hiccups”? Sharing your financial history will allow you to come up with a solution together, especially if either or both partners need help. Some solutions include calling creditors to set up a modified payment plan and monitoring the credit bureaus to be sure positive activity and payments are being reported. Getting both partners to a good place with their credit is an important goal for the long-term financial health of the relationship.

Have you monitored your credit?

Following up on the previous question, it’s vital for couples to know where they stand by reviewing their credit reports at least once a year to make sure that everything looks correct. Couples can get a copy of their credit reports from the three major credit reporting agencies in the United States at annualcreditreport.com. If you’re considering a major purchase or refinance, it can be helpful to know your FICO score, which is a measurement financial institutions use to determine loan rates, payment options, or whether to extend credit at all.

Have you started your retirement planning?

It is never too early to start thinking about the distant or not-so-distant future. Does your significant other have a 401K at work? Are regular contributions being made? What’s your strategy when it comes to retirement savings? We highly recommend meeting with a financial planner to discuss investment tools that can help a couple reach their long-term goals.

What are your life insurance options?

One of the nicest things you can do for the person who you will be with for the rest of your life is to protect them if they live longer than you. This should prompt a serious discussion about purchasing enough insurance to make sure that one partner does not have full responsibility for the couple’s remaining debts. Life insurance may not only pay off remaining obligations but can also be used as positive cash flow and savings for the surviving spouse to assist with living expenses.

Should you get a joint account, individual accounts, or both?

Some couples find that a good way to avoid finance-related arguments is keep things separate and divide expenses each month equally. Others find that having a joint account, in addition to individual accounts, allows them to share centralized expenses like housing, utilities, and vehicles, while also maintaining their own accounts and spending budgets. The key here is to find “what works for you” and understand there may be some trial and error involved in coming up a system that suits both partners.

Can you cut out certain things?

Do you really need 500+ channels or could scaling back on the cable bill be a realistic way to save money? Are you a coffee shop regular? Do you dine out frequently? Are these or other things opportunities to cut back and save? Discussing such options with your significant other may reveal better uses for that money, like doubling up credit card payments or contributing to a retirement or savings account.

How much should you save for emergencies?

It is important to maintain enough money in savings to pay for a car repair or unexpected expense without constantly having to rely on credit to cover these events. It is also recommended to maintain at least two to three months of income minimum in savings to account for any loss of employment. It is not only important to contribute to long term savings or retirement consistently but also to put funds aside in a separate short-term interest-bearing savings account.

What are your children’s needs?

Not all relationships are someone’s “first rodeo” and, in many cases, there are children that factor into financial decisions. Do the children have any special needs, like braces or dietary concerns? Are they involved in travel sports or other activities? How much more attention has been given to saving for further education? Will the merging of two families require a larger home or a more spacious vehicle? Needless to say, children add yet another layer to the financial planning of a relationship.

Creating a healthy dialogue regarding finances can help couples take the right steps toward romantic and financial bliss. And this conversation often starts by asking the right questions. I hope you found this list helpful and that meaningful discussions result from these suggestions. If we can be of any assistance, the team at Call Federal is happy to help with any financial questions that you might have. We even have certified counselors who will sit down with you and your partner to review your financial situation and build a spending plan that helps your relationship grow and flourish. Don’t hesitate to contact us today.