Entering a new romantic relationship at any age brings excitement, possibilities, and energy. It also entails considerations of compatibility on a multitude of levels, including financially.
Getting together on the same page about money is a key element of relationship success, but it’s especially important for relationships formed later in life, whether you’re simply looking for friendship or searching for a new soul mate. At this stage in life, you’re likely to be more personally and financially established, possibly with a family, your own home, or even a business. Blending a new partner into your life and into your finances requires thoughtfulness, open communication, and careful planning.
Respect Your Financial Differences
It’s helpful to gain an understanding of what is and isn’t financially comfortable for both of you from the outset. This requires honest discussion and recognizing and accepting how your finances differ. For example, one partner may have greater financial freedom and want to enjoy more lavish experiences. However, it might not be realistic or appropriate to ask the other partner to participate, either on an equal financial footing or even with all expenses paid. It’s essential to talk about what’s important in each of your lives, identify the differences, and find common ground.
Determine How To Split Expenses Fairly
In today’s more modern and progressive culture, most partners share in relationship expenses. The more your lives begin to intertwine, the more important it becomes to develop a plan of how you’ll split expenses. This includes what expenses you’ll continue to absorb independently, and those you plan to share equally or split differently. As your bond grows, joining together your expenses to your own degree of comfort can be healthy for your relationship. Doing so means you’re partners, working together toward important common goals, and it helps you learn how to communicate and collaborate across other aspects of your relationship.
Ask About Your Partner’s Finances
It’s also necessary to delve further and enquire about your partner’s finances. Sometimes the easiest way to broach the topic without being invasive is to ask about your partner’s childhood, and learn how significant people and events shaped the outlook on money that they hold today.
It’s also okay to be more direct, asking if your partner has debts or meaningful financial obligations that impinge upon his or her current wellbeing. These are important to be cognizant of as you grow closer together. The more you know, the more you’re prepared, both individually and as a couple.
Determine What You’re Willing (And Unwilling) To Accept
The beauty and challenge in any relationship is that there will always be differences. Hopefully your differences compliment each other, but that’s not always the case, particularly when it comes to money. It’s important to be honest with yourself about what you’re willing and unwilling to accept, and to honestly communicate those perspectives to your partner. That extends to financial matters, including what you’re willing to financially support and what habits you’re willing to accept as part of your lives together. Change isn’t impossible, but it can be challenging, particularly the older we get. You need to be comfortable with the way your partner is, including their approach to money management.
Talk About Family And Finances
If you or your significant other has children or other family members, discussing the dynamics of family and finances is important to your romantic relationship, as well as respective family relationships. Common topics of importance include where you’ll spend holidays, family involvement in your everyday lives, and how each of you supports their family, either emotionally or financially.
Making The Decision To Cohabit
The older we get, the more likely we are to either enjoy our independence, or desire closeness. That doesn’t mean that your relationship must be black or white – you’re either in a relationship or not – but it does have a bearing on whether you choose to cohabit.
Sometimes maintaining separate households keeps things simple and provides the space and autonomy you’ve both grown to enjoy. Alternatively, joining households might offer the closeness and mutual support you’re both seeking, plus allow you to share household responsibilities and expenses. Choosing to cohabit is a big step, so make sure your relationship is at the right stage, and most importantly, make sure you’re protected financially, especially if you elect to buy a home together.
There may be many more financial topics to consider as your relationship evolves, such as marriage and prenuptial agreements, Social Security benefit protection, medical and legal agent decisions, and estate planning matters.
SageVest works with individuals, couples and families during all of life’s stages and events. We’re happy to speak with you to offer sound and compassionate advice with regard to your individual, joint and/or family finances. Please contact us if we can help.