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We know, we know. Money isn’t the most romantic topic but it is important. These are 18 money questions to discuss as a couple.
Love is lovely, new love especially so. But young love or love of any vintage can quickly sour when money comes between two people. In fact, money issues are the cause of 21% of divorces.
You don’t want money to cost you your marriage, and if you’re Frugal For Less, you don’t want to get divorced because it’s expensive!
So before you say “I do” or better yet, before you start to get serious with your better half, make sure you openly and honestly ask these 18 money questions.
You can’t approach this topic like a bull in a china shop. Money is a sensitive topic and a taboo one for many people, so you have to be gentle.
Don’t spring this on your partner. Tell them, well in advance, that you have some money questions for them and you’re sure they have some for you too.
Suggest that you both make a list of money questions you want to ask over the next week or two. This gives you both time to formulate your questions and to find the answers. Not all of us could instantly come up with the exact numbers regarding our debt, our savings, or our investments.
Let your partner know that you’ll come armed with documentation to prove what you’re saying (if you have a Mint account, all of the information you need should be there), and they should do the same.
Schedule a time to sit down and discuss the questions. Don’t schedule it when either or you are tense, around the holidays, right after work on a Monday, or when you have company staying with you. Choose a time you’re both likely to be relaxed and without distractions.
Don’t react to surprising or upsetting information. Don’t make a face when you find out your partner has thousands of dollars in credit card debt. Don’t threaten to break up with them because they declared bankruptcy two years ago.
The time to either come up with a plan to address any issues or to decide that yes, this is a situation one of you cannot stay in is not during this initial discussion.
We’ll cover that stuff in a future article if you all are interested. This initial discussion is just to put all of your cards on the table.
1. How Much and What Kind of Debt Do You Have?
Yikes, jumping right in! Well, you have to start somewhere, and because debt is so stressful not only for an individual but for a couple as well, it’s the best place to start. Always get the hardest thing out of the way first!
Not everyone is lucky enough to have parents who taught them good personal finance habits and schools do very little in that area, so it’s not surprising that a lot of people find themselves in debt of one kind or another. And the type of debt matters, often more so than the amount.
A medical school student with hundreds of thousands of dollars in federal student debt (which is typically pretty low interest) is in a very different situation (provided they go on to become a practicing doctor) than a retail worker with $20,000 in credit card debt.
2. What is Your Credit Score?
If the two of you plan to buy a home together or borrow money for something like starting a business or renovate a home one of your currently own, having a good credit score matters. The better the score, the better rate of interest you’ll be offered when borrowing money.
And the lower that interest rate, the cheaper the loan will be. A one percent difference in your interest rate can save thousands of dollars over time.
If your partner’s score isn’t ideal, it’s not a big deal. Credit scores can be improved and while credit scores are important, they’re only important when you do things like borrow money or rent an apartment. They really don’t matter in day to day life. You can check your credit score for free at Credit Sesame.
3. How Much Money Do You Make?
This is a very personal question, but you’re not asking the bus driver or your dentist, you’re asking the person you may spend your life with.
You might think you already have a pretty good idea about how much money your partner makes, but if you’re only basing that on the kind of lifestyle they lead, you may be in for a surprise.
Anyone can look and live like a baller if they have access to credit cards and a willingness to go into debt. Your partner may have extra income not related to their regular job like income from driving for Uber or renting their home on Airbnb.
4. Do You Keep a Budget?
Many people don’t keep a budget. It doesn’t necessarily mean that they’re bad with money or have debt but anyone’s finances are improved when they do keep a budget. It shows how much money you have coming in, how much is going out, and where it’s going.
Your partner may resist budgeting because he or she thinks it’s a complicated, time-consuming endeavor. But when you use an online system like Mint, budgeting is pretty simple.
Even if a person doesn’t want to set up budget categories and allocate money between them, having a Mint account (which is free) at least allows income and spending to be tracked.
5. Do You Have an Emergency Fund?
Having an emergency fund can mean a potential disaster is nothing more than a minor inconvenience. But if you don’t have one, you can spiral into debt pretty quickly.
The pinnacle of emergency funds is having enough saved to pay six months of essential expenses. Three months is excellent and even $1,000 is a very good start.
Anything less than $1,000 is living dangerously.
6. Do You Invest?
Investing is the best way to grow wealth and save for retirement. Even if your partner has debt, if they have access to an employer-sponsored 401k with matching (which is free money) they should be investing enough to get the match.
Ideally, they have a maxed out 401k, IRA, and a non-retirement investment account like Betterment or Wealthfront. But those people are rare unicorns. If you find one, put a ring on it immediately!
7. How Do You Invest?
Investing is excellent, but not all investing is the same. If your partner is into high risk investing like day trading or crypto-currency, that could be a red flag. If anyone could invest that way and become a millionaire overnight, we’d all be doing it.
You want a partner who makes safe, time-tested investments, not crazy, fly by night, get rich quick investments.
8. Do You Want Children?
I am happily child-free, and the expense involved in having children is certainly one reason why. It costs about $233,610, nearly a quarter of a million dollars, to have a kid.
Regardless of the expense, this is the one thing on this list that cannot be worked around. If one of you wants children and the other doesn’t, no matter how much you love each other, get out now because there is just no way this will have a happy ending.
If you do intend to have children, it means there will be several other questions to discuss like how many, will one of us quit work to stay home with them, public or private school, will we pay for college, etc.?
If you can’t have children, will you adopt or attempt IVF? Both routes to parenthood can cost tens of thousands of dollars on top of the cost of raising the kid.
9. How Will We Share Money?
Some couples choose to entirely marry their finances, some choose to keep them completely separate, and some keep three accounts, one for paying joint expenses and one for each person to spend out of as they wish.
It doesn’t matter how you share or don’t share money as long as both partners agree on how to do it.
10. Who Will Handle Our Finances?
Some people are better at handling financial matters than others, and some people actually enjoy it. But it’s unfair for one person to be entirely responsible for all of the family finances. It’s also unfair for one person to be utterly ignorant of them and can be dangerous in the event of a divorce.
Each partner should at least know how much is coming in, going out, and where it’s going. Both should also be consulted on investing decisions.
11. Do You Want To Buy a Home? What is the Timeline?
Not everyone wants the responsibility and debt you take on when you buy a home. Some people can’t imagine not buying a home of their own.
If one of you does want to buy a home, when? Not until you’re married, right after you’re married, not for a few years until you’ve paid off debt and saved a substantial down payment?
12. What Are You Willing To Take On Debt For?
If one of the answers is “the wedding,” run for the hills and don’t look back! I can’t think of a worse thing to go into debt for or a worse way to start a marriage, thousands of dollars in debt for a single day party.
Some people don’t give a thought to pulling out a credit card for stuff like clothes and vacations knowing full well they don’t have the money to pay off the balance when it comes due.
Some people feel faint at the thought of going into debt for anything, even a home. While you can buy a home for cash, it might not be your ideal home and it may take years to save up enough to do it.
13. How Do You Feel About Lending or Borrowing Money From Family or Friends?
If money can cause a lot of disagreements in a relationship, family often does the same. Put the two of them together, and it’s not exactly going to add up to wedded bliss.
Some people feel obligated to help family no matter what, and some people wouldn’t loan money to anyone, family or not.
And while many of us might be grateful for a loan or gift of money from family, others feel it’s intrusive and controlling.
And while the family/money issue is on the table, ask if your partner has ever or would ever co-sign a loan for a family member.
This is perhaps worse than loaning money because while a loan not being repaid means you’ve lost X amount of money, being on the hook for someone else’s loan could cost thousands of dollars, not just for the loan but possibly for late fees and penalties as well.
Add to that the damage to the co-signors credit score and the whole situation is just a nightmare.
This topic should also include a discussion about how to care for aging parents. Some people can’t imagine putting their parents into a care home and would prefer to make sure parents could stay in their own home or live with one of their children.
Some people already have their parents care home picked out!
14. What Are Your Financial Goals?
Hopefully, your partner has some! Ask about short, medium, and long-term goals. Short-term goals might be things like becoming debt free or being able to save enough to max out a 401k (that would be $18,500 currently).
Medium term goals could include saving for a 20% down payment on a home or buying an additional home as a rental income property, and long-term goals could be saving money to start a business and saving for retirement.
It’s wonderful to have goals but just having them isn’t enough. Also, discuss how your partner plans to reach these goals and how you might reach them together.
15. Have You Ever Been Fired From a Job?
Many people have been fired from a job at one time in their lives but how many of us have been fired from multiple jobs? If your partner has, you need to find out why. Not being able to keep a job is an enormous red flag. It could mean the person has a poor work ethic, can’t take any form of criticism, or even has a problem controlling their temper.
16. How Much Can We Spend Without First Consulting the Other?
Both of you are adults and adults don’t have to account for every dollar they spend. But there should be a limit. Coming home with a few new books is one thing, coming home with a new $5,000 camera is another.
Decide how much each person can spend without first discussing it with the other.
17. Do You Have Health Insurance?
If you’re uninsured in America, one medical event could wipe you out financially and take years to recover. Medical expenses could even end in bankruptcy, something even those who do have insurance are not entirely safe from.
If one of you doesn’t have insurance, can you be added to your partner’s policy? Not all employers require a couple to be married in order to provide coverage.
This may seem like one of the smaller issues on this list, especially if you are both young and healthy but you and healthy people have accidents or come down with conditions and diseases too.
I know insurance is expensive, I have to pay out of pocket for mine but if your partner isn’t insured, the two of you should come up with a way to get them coverage. Under the current system, it’s just too much like playing Russian Roulette to go completely uninsured.
18. Do You Want a Prenuptial Agreement?
Asking your betrothed to sign a prenuptial agreement isn’t exactly going to come across optimistic about the future of your relationship, but we all know the statistics.
It’s probably lower than the 50% that is often cited, but the percentage of marriages that end in divorce is certainly not insignificant, so it’s understandable that some people are more realistic than romantic about the prospect of marriage.
If you and your partner are roughly equal when it comes to money, a prenup might not matter all that much, but if one person is much wealthier than the other, a prenup is something that might be wise.
And They Lived Happily Ever After
Even if you and your partner don’t see eye to eye on most of the things on this list, that doesn’t necessarily mean that your ideas around money are too incompatible to get married and to have a successful marriage.
But if you choose to stick your head in the sand and never discuss these money questions, you’re going to be in for a bumpy road because sometimes love doesn’t conquer all.
Have an open, non-judgmental conversation around money and don’t stop talking about it. Money isn’t the best topic for pillow talk but it is something that needs to be an on-going discussion.
Because if you can have a calm, rational discussion about money, you can talk about anything. And that’s a fundamental part of a happy marriage.