Love can make us do stupid things. Getting caught up in a new relationship can lead to mistakes in our financial lives that we only see in hindsight. With more people deciding to co-habitate prior to marriage, money problems often times pop up far sooner than couples are ready to deal with them.
One big mistake that couples continue to make time and time again is opening joint accounts without considering the financial ramifications for each individual. When you are not married, in particular, its not always the smartest move to hitch your wagon to someone financially.
Weve provided some tips that are useful when considering a joint credit card account as well as some advice for how to make it an easier more comfortable conversation to have with your beloved:
Are We Ready for the Next Step?
If you havent discussed what you are doing together tomorrow, there is a strong likelihood you have no solid plans for the long-term future of your relationship. Money matters are serious business and it is the responsibility of both parties to really think about what it means to the relationship to start joining up financially. Bank accounts and credit card accounts both carry big financial obligations and they should not be taken lightly, unless of course you are looking forward to having bad credit and large financial burdens caused by another person.
Approaching the Topic: Money matters are about as comfortable to discuss with some people as personal hygiene is but it is a necessary evil. Set aside time when neither party is rushed or in a particularly bad mood. Start talking about what the future may hold. If either party is reluctant to commit to a relationship’s future, both parties should be reluctant to commit to financial joint ventures.
Do We Understand Each Other’s Money Matters?
You can know a lot about a person during a whirlwind romance but in some cases money is not one of those things you truly understand unless specific discussions have been instigated. Money is often a taboo subject, especially if one or both individual’s credit past is not so great. However, in order to move forward with an honest and solid relationship, money will play a large role. Consider that many divorces in the nation are the result of money matters.
Approaching the Topic: If you are comfortable enough to share your life and your house with someone else, money issues should be brought out and laid on the table for serious discussion, especially if there is bad credit histories involved. Pick another time, separate from your initial conversation, to bring all of your billing statements and budgeting plans to the table. Sit together and discuss how each handles money matters and if finances are combined, how would it affect each other’s money and credit.
How Will It Work Out?
After the first two meetings together on the money front, there may be some issues or concerns about how the other manages money. If you find you are both on the same page, kudos! This is a good start to the financial future of the relationship. If methods differ largely, you’ll need to work on your issues together.
Approaching the Topic: If you are the one that seems to have a better grip on money matters, you may be inclined to push your methods full-force without much consideration for your partner’s feelings. The key element of success when one is not as strong as the other financially is to discuss the situation and find a compromise to the way money is handled. Bitter feelings can quickly come about when one is too pushy or secretive with money. Consider also if this meeting does not go over well and it becomes hard to find common ground, you may not want to move forward with joint money ventures at this point.
Accommodating the Decisions to Join Finances
If, ultimately, after all is said and done you both decide to go ahead with plans to get a joint credit card, bank account, or other financial obligation, you both should nail down the managerial aspects of the accounts and the expectations for spending and payments.
Approaching the Topic: If both partners are in agreement to forge ahead, it is important that you come to terms with how things will work. Discuss who will pay the bills, whose money will be used for payment, and when/how the payments will be provided. Equally important is a discussion about spending limitations and expectations. There should be a line drawn where both partners get to provide input when high-priced purchases are being considered. You are both responsible for the charges incurred so you both should get equal say in how the money should be spent. If you can’t agree on the terms, individual accounts may be the way to go.
Finding Alternatives
There are other ways to join forces financially that may not require the legal commitment of joint accounts. Perhaps you can consider a joint bank account where you equally contribute funds to cover combined costs. You may also consider adding your partner to be an authorized user on your card (or vice-versa) which limits their control over the card usage. There are numerous ways to find compromise and ultimately it should come down to individuals to work on improving credit histories and their financial stability to be on equal ground moving forward.
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