Goint to the Chapel: The Finances of Togetherness

June 12, 2014 § Leave a comment

I appreciate a good love story. But I hate if the ending is sad, if the joy and determination at first is lost.

With June the most popular month for weddings, this is a good time of year to have a little heart-to-heart about the finances of togetherness. You may not be getting married or are just taking your relationship ‘to the next level,’ let’s see if we can your future together rosy and bright.

We’re going to jump right into the deep end.

The legalities– Folks in love don’t always want to discuss boundaries. But Robert Frost’s famous line, ‘Good fences make good neighbors,’ is oft repeated because of its immense truth. So if you are not getting married you may want to invest in a domestic partnership agreement. Not romantic? Being financially ruined is also not romantic.

Day-to-day expenses – There are several ways to manage expenses. I will list three here and their pros and cons. 1.) Keep bank accounts and finances entirely separate- which is hard when it comes to food and cable or encouraging feelings of togetherness. I have seen couples do this and it has emotional consequences for them. It leaves one, in my experience, feeling as if the relationship is more like a roommate arrangement. 2.) Put all earnings into one joint pot or account- which is hard if there is disagreement on hobbies or spending- like shoe shopping or things any other items or interest on which you may have strong disagreements. 3.) Another method is the ‘pick your bill’ or the percentage-of-income-to-percentage-of-expenses method- which is hard for saving jointly. Like I said, each method has pros – which I didn’t mention- and cons, and there may be times in your lives together when you use particular methods as life evolves in your relationship or jobs change.

Big purchases – Assuming you have a legal agreement, buying a car or expensive item together is easy as distributing proceeds in the event of a breakup is already spelled out. But titling expensive purchases, like property, is very important without a legal agreement. So please consult an attorney or legal advisor in such cases.

Red flags– You may want to NOT join your finances together if your intended partner owes money and doesn’t pay bills, if they spend beyond their means regularly, if you are the source of money because getting work is ‘hard.’ These and other red flags should be a wake-up call that the person you love may not be the adult of your dreams. You want a real, responsible – and fun- adult with whom you can share financial goals.

I’m a planner. I kind of have a compulsion to think of the worst case scenario. When you’re in love…you don’t. But bad things happen to people in wonderful, caring people, people in love. We never want your heart broken. But since in life there is heartache, we certainly don’t want to add financial ruination as well.

Plan so you can be safe. Be in love, but be safe. That’s how smart adults do things. (Information provided should not be construed as legal or tax advice; you should speak with an attorney or tax advisor.CR10057)

Finance with Chocolate Sauce