The Difficult Relationship Conversation – Financial Skeletons In The Closet

wedding
Before you say I do…

This past weekend I learned a wonderful friend of mine will probably be engaged within the next few months.  As we were excitedly chatting about all the details of how their relationship had progressed over the last year, I decided to be a bit of a wet blanket (but a good friend!) by asking her if she had had the very difficult but very important relationship conversation with her potential future husband.  No I’m not talking about the conversation where you define the relationship or talk about what ring size and setting you want.  I’m talking about the conversation, where you disclose what financial skeletons are hanging out in your closet and your beau’s.  Debt, credit score, even income shouldn’t be off limits when you’re in a serious relationship considering marriage and definitely not off limits if you’re engaged or already married.

But somewhat surprisingly a fair amount of women have no idea if their boyfriends or husbands have good credit scores, debt or even what they exactly make in income or how they spend it.  Someone I know didn’t know her husband had bad credit until they applied for a home loan 4 years into their marriage and got rejected.  Seriously it was like the scene from How I Met Your Mother when Marshall finds out Lily had massive credit card debt when they were applying for a home mortgage together.

Dowisetrepia - Lily and Marshall apply for a home loan and get approved for 18%
Dowisetrepia – Lily and Marshall apply for a home loan and get approved for 18%

It’s actually a betrayal of trust experts say.  They call it financial infidelity and it’s as damaging to your marriage as the sexual kind.  Crazy right?

So if you’re in a serious relationship considering marriage or living together or maybe you’re already engaged or married, if you haven’t had THE TALK yet, maybe it’s time to schedule some time to do it.  Below are some financial details you and your significant other should probably tell each other about.

  1. Debt: Both of you should disclose any and all debts you have since to some extent your debts become communal (if not legally at least symbolically) when you are married.  This way you can tackle the problem head on together getting rid of high interest debt ASAP and deciding what other debts to work on or put on the back burner for now.  Also, knowing if you have debt will help you in wedding planning, so you won’t incur more debt for a wedding and/or honeymoon you can’t afford.
  2. Credit score:  Credit score is important for all kinds of major financial purchases and loans, cars, homes, etc.  If you or your significant other have a subpar or even terrible credit score, the earlier you know the better so again you can both work on it together.  Or not.  You can always bail, no shame in that.  (This of course assuming you’re not married yet.  I’m not suggesting you get divorced over a credit score!)
  3. Income:  You and your significant other should know how much each of you make in income and bonuses.  Afraid you might sound like a gold digger asking your future husband exactly how much he makes?  Or what if you actually make significantly more?  It might be hard to ask point blank for fear of hurting someone’s feelings or ego or sounding like a gold digger, but if you can’t have this difficult conversation, how are you going to get through decades of marriage?  Consider that.
  4. Spending habits and addictions:  Does your significant other love buying expensive watches like Panerai and Audemars Piuget?  Does he like to go to Vegas to play craps a little too much?  Is he the type to buy a round of drinks for everyone in the bar one too many times?  Finding out these little financial landmines early is a lot better than finding it out too late.  It might have been fun while you were dating, but it probably won’t be when you have two kids and a massive amount of debt.
  5. All financial accounts and assets:  You should both be able to list all financial accounts and their amounts; checking, savings, taxable accounts, 401k, etc. and other significant assets and liabilities like car(s), properties, famous paintings, etc.  Maybe you can just exchange Mint.com or PersonalCapital.com passwords to view each other’s accounts.  That’s what my husband and I do since we still keep separate accounts along with joint accounts.  You could probably save this one for marriage, though again its better to know everything going into marriage.  Once you’re married, you’re married – legally, financially and emotionally.  No backsies.  Considering that they say financial conflicts are among the top reasons for divorce, don’t you think it’s important to know the whole financial picture for you and your spouse?

I know a lot of people feel that money is a touchy subject.  It seems couples can talk about religion, politics and sex but not about money.  A lot of women feel like they’ll sound like a gold digger or will hurt a man’s ego if he makes less than her.  I’ve also heard women say they feel its unromantic to talk about money and somehow money shouldn’t matter when it comes to love.  Love conquers all they say.  All valid and important points.  However, they can’t trump the more significant underlying issue which is that you and your future mate obviously can’t communicate openly about a very important subject, a topic that will invariably touch many aspects of your lives together.  So do yourself and your significant other a favor and have the talk about your finances.  Your relationship and marriage will have a stronger foundation by it.  Oh and if you are lucky enough to have found someone to share your life with, congratulations!

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