Credit conversations to have with your partner

Credit conversations couples must haveMoney issues top the list of reasons couples argue. Here are some important money discussions to have with your partner before problems start. It's common knowledge that one of the top topics couples argue about is money: who's spending more, who's earning more, who's saving more and who's more concerned with such things as RRSPs, insurance and other investments. What's astonishing is that the reason it's such a hot topic is usually because partners don't have the big money talk before their relationship gets serious.

If it's such a sensitive spot in a relationship, why aren't more couples doing more to nip it in the bud before it becomes a problem?

"When couples first start dating and getting to know one another, money -- how much one earns or has in the bank - usually isn't a tasteful subject," says life and relationship coach Christine Kinney. "It doesn't usually become a focus until the couple gets more serious or married and finances become a partnered thing not just an individual thing."

Even when we get married, some couples remain in the "What's mine, is mine" line of thinking, she says, especially when one person has a higher salary, or each person has different opinions about spending and saving.

"This is where the problems come into play," Kinney says. "When couples don't have a chat about what each other's expectations are in terms of spending and saving, the partner who loves to shop will annoy the other partner who prefers having more money in the bank. Then the partner who earns more may feel they have the right to spend, and it snowballs."

That's why couples need to sit down for that money chat as soon as possible. Here are Kinney's suggestions for topics to touch on with your partner.

How much do you earn? This isn't the easiest question to ask, and not everyone wants to talk about it, but it's important. If you want to spend the rest of your life with someone, you need the total combined income information to create the household budget. You also need to know this to plan vacations, figure out the sort of house you can afford to buy, whether you can afford children, and what sort of credit you can afford to have. Of course, it's still important to have your own separate accounts, but your life together needs the income base to stem from.

How much do you owe? One person's bad credit can affect both of you, especially if you plan on making big joint purchases such as a house or vehicle. If one person's debt load is much higher than the other's, what they're able to contribute financially to the relationship will be lower. Knowing all of this upfront helps couples work together to cut down debt so they can then work toward building up savings.

Spending and saving. This topic can be a little more difficult because we aren't always 100 percent upfront about our spending habits. However, that income base you initially set up can deteriorate pretty fast if one partner loves to spend, but has no concern for saving. It can be upsetting for the partner for whom saving is important to have funds disappear due to the other person's shopping sprees. Establishing a spending limit, as well as a rule to sock some cash aside, is a great compromise.

Investing. What are each person's interests in or understanding about investing? What are each person's views on RRSPs, "rainy day" funds or other sorts of investments? Nobody wants to think about the relationship that far down the road, yet it needs to be discussed so that you can each have your own individual plan, as well as another plan that you invest in together.

What are your thoughts about joint endeavors? After talking about the topics above, you'll be ready to discuss what you'll be doing together. Knowing what each person's thoughts are on this specific topic will be helpful when thinking about things such as joint bank accounts, credit, and even having children, which is the biggest joint endeavor there is. There are some people who want to hold on to their independence, having separate accounts, investments and credit. Others want to meld together on each level. To avoid any misunderstandings in the future, these things need to be put on the table now.

Written by Lily Wolf.

Published July 29, 2009

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