“Money makes the world go round …;” so goes that chipper tune from “Cabaret.” But when it comes to long-term relationships, most studies show that arguments about money and finances rank as the major cause of divorce.
Yet when couples start dating, they rarely exchange views about financial issues and spending habits. It is a rare on-line profile that states “Must have an IRA with at least $25,000 in it.” When I speak with singles men and women about their dating priorities rarely does anyone express any financial preferences regarding someone they want to date.
Men may find that difficult to believe, because many males still think that meeting a guy with a “fat wallet” is a top female priority. But with “today’s women” that is far from true. Most of the single women I speak with earn a decent income themselves and were not looking for men to support them.
The real problem sets in when single men and women meet, date, and then become engaged. At that point most of their discussions center on purchasing an engagement ring and planning the wedding, a one-day event.
As a couple winds its way through an engagement, other topics soon arise, such as honeymoon plans. Eventually talk may turn to other relatively “trivial” issues such as where they will live or whether they want to have children. (That was sarcasm, folks.)
BUT rarely do engaged couples ever sit down and do any financial planning. Approach a 20-something couple in deep discussion about the print font on the wedding invitations or the flavor of icing on the wedding cake. Ask if they have done any long-range financial planning, and you will probably receive the same blank stare my son used to give me when I would ask him to take out the garbage while he was immersed in a video game.
But without that planning, a couple in which one person loves to shop while the other prefers to save is likely to wind up down the road as a divorce statistic.
What financial subjects should couples discuss? Here are just a few suggestions:
• Whether they plan to pool their money or keep their finances separate.
• The extent of outstanding college loans or other debts.
• Which person will assume responsibility for paying the bills and preparing tax returns.
• How much financial risk either person is willing to take, either in terms of investments or decisions about career moves.
And, of course, any couple even considering marriage these days should have the all-important “pre-nuptial agreement” conversation.
So, the next time you find yourself getting involved in what is beginning to look like a serious relationship, try not to focus all your attention on how hot you think he or she looks.
One evening you might want to cuddle up on the couch and whisper in your sweetie’s ear, “So how does your 401(k) look these days?”