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Love in the Time of Layoff: First Money, Then Love

They say you’re never supposed to talk about money, but in the recession, it’s kind of hard not to. Despite a growing savings rate, there has been massive income loss and a dramatic devaluing or even obliteration of assets. For a lot of us, money is forefront and ever-present on our minds.

But should you bring it up in relationships? Absolutely, say CPAs, therapists, love coaches and relationship experts. In marriages, money has always been the number one cause of tension, regardless of whether we’re rolling in it or dining on Ramen noodles.

The California Society of CPAs — in a state where the foreclosure rate is one of the highest in the country — have developed a step-by-step path that they believe will lead to cohabitating financial bliss if applied before heading down the aisle. We haven’t tried it yet (not quite at that stage), but if you’ve got tips on how to make money and love work well, leave them in the comments section below.

Read more tips for talking about money with your S.O.

Here’s the list:

Step 1: Be are aware of and comfortable with each other’s money personalities. Some of us grew up in families where parents watched every dime; in other families money flowed easily. Some people measure self worth in terms of money and possessions. Some people are natural spenders; others are savers. Understanding your future spouse’s background and values can help avert problems down the road.

Step 2: Discuss short- and long-term financial goals. Setting financial goals helps you develop priorities and define the type of lifestyle you will lead. Break down your goals into manageable pieces. If you want to buy a house in five years, determine how much you need to save monthly to meet the down payment.

Step 3: Become well-versed in personal finance. Parents and schools rarely provide training in personal finance. Work together to develop your financial knowledge and build confidence by taking a course, meet with a financial planner, or purchasing a reputable book. (Or try Mint, one of our faves.)

Step 4: Discuss a plan to structure your finances. Will you pool all your resources into joint accounts, maintain separate accounts, or devise some combination of the two? There is no right or wrong answer; the key is to come up with a plan that works for both of you.

Step 5: Plan for the impact that marriage will have on your taxes. The marriage “penalty” means that you and your spouse together are likely to pay more taxes than you each did as singles. Check with a CPA or tax professional to ensure that you are prepared to meet your tax responsibilities and aware of any tax law changes in this area.

Step 6: Determine how you will divide the money management tasks. Decide who will be responsible for balancing the checkbook, filing taxes, and tracking investments, or better yet, set up a plan for rotating these and other financial tasks.

Step 7: Understand the importance of establishing a realistic budget. Couples without a budget tend to live and spend from day-to-day. A valuable budget helps you save regularly, utilize income wisely, and avoid misunderstandings about how money is spent.

Step 8: Understand your future spouse’s investment personality and risk tolerance. Investing styles are different, ranging from conservative to risky. Take the time to arrive at a level of risk where you both feel comfortable.

Step 9: Know how much debt your spouse is bringing into your relationship. Couples must enter marriage knowing how much debt they each carry and how it will be paid.

Step 10: Commit to discussing money on a regular basis. Differences are inevitable. How you handle them is important to your marriage.

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Tags: Love in the Time of Layoff, relationships, Spending and Saving