Financial compatibility might not top your list of desirable traits in a partner, but many financial experts say it should. Otherwise, love can inflict serious damage on your bank account.
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According to a new survey from TD Ameritrade, 6 in 10 people say they wouldn't marry someone without knowing their financial situation first. An even greater number—8 in 10—said they have never withheld information about their financial lives from their partner. Despite those good intentions, coming up with a game plan for managing money within a relationship can be harder than agreeing on a honeymoon destination. Here's an eight-step guide to making sure your love match is also a money match:
When you're dating:
1. Figure out your (and your honey's) money personality. A new book by Michael Sion, Money and Marriage: How to Choose a Financially Compatible Spouse, offers an animal-based matrix to determine whether you're financially compatible. Puppies spend lots of money, squirrels keep money in the bank, ostriches avoid talking or thinking about money, sparrows live simply and frugally, and owls enjoy thinking about and managing their money. As you might guess, owls are the easiest to date, while puppy dogs tend to cause trouble, especially when matched with squirrels. That doesn't mean you should end the relationship immediately, but Sion argues that it's useful to know where tension might flare up so you're ready to work out differences amicably.
2. Pay attention to red flags. Always disagreeing, avoiding all financial discussions, seeming rich without explanation, and carrying large amounts of debt are all red flags for big financial blow-ups later, says Sion. Take note and either address the problem right away or be prepared to in the future.
When you're engaged:
3. Schedule an in-depth conversation. Bethany and Scott Palmer, known as "the money couple" and authors of First Comes Love, Then Comes Money, suggest no less than 20 questions for couples poised to walk down the aisle. Among them: Do you want joint or separate checking accounts? How did your parents spend and save money? Will one of us stop working to stay home with children? What have been your biggest money mistakes? This is also the time to talk about big money goals, such as owning a house, retiring at age 45, or launching a small business.
4. If necessary, do some detective work. This advice might sound alarming, but Sion insists it's a necessary step toward self-protection. He suggests sussing out just who your partner is by meeting his parents, visiting his workplace, typing his name into a Web search to see what comes up, and even checking for any criminal record and viewing his credit report.
After you're married:
5. Continue to schedule regular chats, or "money huddles." Bethany and Scott Palmer (no relation to this reporter) say that too many couples ignore financial issues until they start causing problems. That's why the Palmers advocate regular check-ins, which they dub "money huddles." They recommend setting aside a time in advance—sort of like a date—to hammer out your financial priorities and talk about your progress.
The Palmers also suggest focusing on the positive by writing down the good things about your financial relationship. Perhaps you each earn a steady income, or you've managed to pay off your credit card debt. Then, write down the negatives or challenges, so you know what you want to focus on.
6. Snip financial infidelity in the bud, or, better yet, avoid it altogether. According to the Palmers, financial infidelity, which they define as making a money decision without the knowledge or consent of your partner, happens a lot. Scott even admits to being guilty of it. The way to stop it from ruining your relationship, they say, is to deal with it quickly.
They urge couples to first confront feelings of shame and embarrassment over debt and overspending, which can be paralyzing. Then, work toward trusting each other and avoid trying to control every money choice, from buying coffee to a new work outfit. Next, talk about your shared vision for your life together. Maybe one person wants to be more frugal to fund a fabulous vacation one day, for example. Lastly, develop a plan and budget together to make that vision a reality.
When you're breaking up:
7. Don't ignore the possibility of this moment. It's not as romantic as discussing flower arrangements for the wedding, but the risk of a break-up is a reality. To protect yourself, make sure you share money management responsibilities, so one person isn't the sole bookkeeper, or investor, or bill-payer. Each person should know the passwords and locations for all accounts.
8. Separate your credit. Unfortunately, credit scores can stay intertwined long after a marriage ends. If you are still registered as a co-owner of a credit card that is also used by your ex-spouse, you are considered responsible for that debt, regardless of the state of your marriage. (In some states, all accounts opened during marriage are considered joint, regardless of whose name is on them.) Post-divorce credit problems, which are common, usually can be avoided by closing joint accounts.
The good news: Financial disagreements might be one of the most common causes of relationship tension, but they can be significantly improved with a little effort.
Kimberly Palmer (@alphaconsumer) is the author of the book Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back .