Being in love is amazing! It's what life is all about. Unfortunately, many couples do not talk about money until it becomes an issue in their relationship. Ask these questions of each other to get to the root of any potential problems before they arise.
1. Who are you?
It’s “true confessions” time. Talk about how you each behave with money, what worries you and where your strengths and weaknesses lie.
2. What do you owe and own?
Many couples go into a relationship and even get married without a clue about their partner’s assets and liabilities. It doesn’t help a relationship to discover an ancient student loan, deeply in arrears, just as you’re negotiating a mortgage for your first home together.
3. Share credit reports.
If you’ve never examined your report and don’t know your credit score this is an excellent time to repair that omission. Aside from anything else, you might find closed accounts or discharged debts that are still listed as active. You can then correct the error with the credit-reporting agency. Links to free credit reports on Industry Canada website.
4. What’s the cash flow?
Lay out the monthly after-tax income and list all monthly obligations. Don’t forget annual or semi-annual payments such as insurance. This exercise will lead you toward creating a couple’s budget, which is a far more efficient way of handling money than trying to stick two individual budgets together.
5. Establish your roles.
One of the most difficult aspects of coupledom, especially for those who have been single for a long time, is deciding how to manage joint finances. It isn’t really important how you do it but rather that you have a discussion, come to an understanding and stick to it until you decide together on a change.
We all do it and, chances are, those visions dancing in your head cost money. Whether it is being a stay-at-home parent, bicycling around the world, going back to school, starting a business, living on a farm or retiring at 45, cast such dreams in your honey’s direction.
All kinds of wonderful things can come of this exercise including discovering that the love of your life shares in them. But even if that isn’t the case, your dreams and goals should form the basis of a financial plan together.
For more information about learning to dream together visit Genworth Financials website to Read More about Couples, Finance and Money Issues!
(First published in the Toronto Star on May 7, 2012.)