I am still surprised at how many partners in committed relationships have no idea what is going on in their financial lives. While I appreciate that many have clear divisions of labor to manage their busy lives, it is no longer acceptable to say, “Oh, my husband/wife handles that!”
With a nod towards Valentine’s Day, it’s time for my annual nudge to prompt conversations and an exchange of information that will serve every couple over the long term. If you are married, in a long-term partnership, or moving from dating to serious mode, here’s what you need to know:
Discuss your relationship to moneyWe all come to adulthood with a certain amount of money baggage, so it’s best to own those emotions and share them with your significant other. These conversations only work if you are honest and non-judgmental, but done correctly, they should deepen your understanding of one another, and hopefully, help you navigate future tense moments, when the feelings arise.
Share, but only when you are certain that this is ‘the one’If you did not catch CBS News chief correspondent Jim Axelrod’s deep dive into the romance scam world last year, I encourage you to do so.
More than 64,000 Americans were defrauded out of over $1.14 billion by romance scammers in 2022, according to the Federal Trade Commission — a figure experts say likely vastly underestimates the amount of damage done.
Do not loan or give money to any romantic partner, or share passwords, until you are absolutely sure that you are in a committed relationship with a person that you can trust.
When ready to commit, discuss financial goals/create a planDuring the process, you should share the total amount of outstanding debt that you are each carrying, the amount of money in savings or investment accounts, retirement holdings, and credit scores.
Determine whether to maintain separate or joint accountsEither way can work, but to be clear: Separate accounts should never be secret! Each of you should know how to access the other’s account, in the event of an emergency.
Commit to consistent, money meetingsAs you begin your joint financial journey, schedule a sit down every three to six months to review your cash flow, your balance sheet (what you own and what you owe), your investments, and any changes in your financial lives.
Once you have a clear understanding of the game plan, you can reduce the number of meetings, maybe one after the tax filing season and then another at the end of the year.
AgreementsConsider a pre-nuptial (before marriage), post-nuptial (after marriage), or no-nuptial (for those who are not legally married) agreement.
These legal contracts contemplate how a couple would divide their financial lives in the event that the relationship does not work out. Couples with complicated circumstances, like children from previous marriages; owners of closely held businesses; those who have a large disparity in wealth may want to consult with a matrimonial attorney to discuss ways to navigate this thorny topic.
Pay attention to red flagsA Bankrate survey found that 40 percent of U.S. adults who are in committed relationships (married, in a civil partnership or cohabitating with a romantic partner) have committed financial infidelity, defined as spending more money than their spouse or partner would be OK with, keeping a secret expense, debt, credit card and/or checking or savings account from their current partner.
Forensic accountant Tracy Coenen says these are common warning signs that something nefarious is going on:
— Making several, unexplained ATM withdrawals
— Blocking access to financial information
— Spending large amounts of money without telling you first
— Maintaining a secret account
Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at askjill@jillonmoney.com. Check her website at www.jillonmoney.com.