Personal Finance Advice

If you’re heading down the wedding aisle soon, or if you are combining households with someone who you are in a relationship with - there comes a time when the two of you either decide to have an open and honest discussion about your finances or instead you decide (consciously or unconsciously) to just leave it alone and assume that everything is a-okay in the other person’s financial world.

Do you want to guess which option is better?

Whether or not you combine all your finances with your spouse or significant other is a decision that should be made by the both of you.  There are valid reasons for each choice depending on your particular situation, but in most cases the finances can be simplified quite a bit by combining them together.  There is no rule that says significant others absolutely must have joint accounts for debt and savings, but it can make everything a little easier.

Regardless of the choice you make to combine finances or keep them separate, both you and your significant other should take the time to sit down and disclose the full details of your personal finances to each other.  If the thought of this makes you cringe, then consider this: Would you rather reveal all your financial details and find out your significant other’s financial details early on, or would you rather discover that your spouse’s credit is horrible after you submit a joint application for a mortgage to buy a house together?

The truth is that your spouse’s personal finances affect you, even if the two of you don’t ever combine finances.  Buying a house or taking out an auto loan can turn into a real nightmare if that’s the moment you find out that your significant other is three months behind in credit card payments and hasn’t made a student loan payment in over a year. 

You might also get a different view of your partner when you get a realistic glimpse at how he or she handles finances.  A person who keeps up on payments and fastidiously contributes to savings demonstrates a readiness for responsibility while a person who regularly misses payments and exceeds credit limits might indicate reluctance to achieve maturity.  If you find out that your loved one needs help with budgeting and handling finances then you can help early on before it starts to affect your chances of buying items together as a couple.

What if you are the one with the horrible credit and tendencies toward credit mismanagement? Chances are you’re embarrassed to reveal your money problems to your significant other, but if you don’t reveal your financial situation then you’re hiding a lot from the person you’re supposed to share everything with.  Or, in other words, you’re lying through omission.

Get the finances out in the open before you marry or move in with someone.  It’s better to know early into the relationship instead of much later when the other person’s finances will make or break your ability to obtain credit jointly.

What do you do if your significant other won’t share financial information with you whatsoever? Most relationship experts would agree: Consider it a huge red flag.