My ex and I both thought saving 15% of our income for retirement was a good idea. On the surface, it seemed as if we were in sync and our money philosophies were aligned. So why no "happily ever after?" We never actually talked about what that retirement might look like for us. He envisioned relaxing at home most of the time, maybe occasionally eating out. I wanted to travel and see the world—something that definitely was not high on his agenda. Later, it caused tension in our marriage because the purposes we had for our money were so different.
As you and your potential life partner prepare for a life together, it's vital to dig below the surface and talk about how you feel about money. The choices we make regarding personal finances are imbued with unique power, reflecting our personal values and shaping the course of our lives. Your money philosophy is a big part of any relationship, and if you and your partner are not on the same page, it's going to affect more than your joint bank account balance—it'll affect the bottom line of your relationship as well. While the numbers are important, they don't tell the whole story.
Here are a few things to consider as you try to ascertain your financial compatibility:
Go deeper than the saver vs. spender persona
When we talk about diverging money philosophies, we often focus on the idea of savers versus spenders—which is useful in many circumstances, but your money decisions as a couple will no doubt be considerably more complex.
It's important, then, to not limit your relationship money talk to generalities. Instead, dig into the specifics of what exactly you like to spend your money on. If, for example, your partner would rather buy a big screen TV than shell out the money for that long weekend getaway you might prefer, you need to determine your comfort level for compromise—otherwise, that parting of the ways on spending priorities may very well lead to serious disagreements.
Get real about your long-term financial goals
Don't forget to delve into your money "why," as well. Think about what makes you tick in the money realm and how that ties into your long-term goals—whether that be putting a large percentage of your income towards a down payment for a house or striving to maintain a certain type of lifestyle. If saving is a "must" for your fiscal life, it should not be difficult to come up with a rationale and plan that can help your partner—and perhaps even yourself—understand the underlying reasons behind that need. Getting down to the nitty-gritty of why you like to eat out at restaurants or why you think it's a good idea to save for your future child's college education promotes a teamwork and unity of purpose that can make those dreams a reality.
Regardless of your personal financial ethos, aligning with your partner on money philosophies is important to the future of your financial health—and the future of your relationship.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917