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Are you Financially Compatible?

Valentine's Day is just around the corner. Romance is in the air. Everyone is out buying flowers and chocolates. Guys are frantically trying to find a last minute reservation to book a romantic dinners. During that romantic dinner you should look lovingly in to your significant other's eyes and say these romantic words - "Honey lets talk about the family budget". I guarantee you are in for a night of fireworks.

Ok so maybe you could have the conversation about the family budget on the day after Valentine's Day. Probably a better idea. Talking about your family finances may not seem romantic, but if you and your significant other can understand your financial compatibility or styles. It could avoid a lot of "loud" conversations about money. Every study about relationships constantly shows that money problems are one of the top three issues that cause arguments, break down in relationships, and even divorce. Once of the best ways to combat this problem is to understand your financially compatibility with your spouse, or significant other.

According to new data from Fidelity Investments, outside of an emotional connection, financial stability is the second-highest consideration when beginning a new relationship for women (64%), while men valued physical attraction (60%).

Money is one of the top reasons marriages end, according to research cited in Psychology Today. When two people come together, they need to make sure they are financially compatible.

Here’s how to determine if you and your betrothed are a good fit — financially speaking.

1. As a couple define your values and financial goals

Often, financial disagreements are not simply about money. Money can represent power, self-worth or control to people. Creating a life as a couple built on common values will help you use the money as a tool to support those share values and financial habits. You now have to work together as a couple to create values for yourselves.

2. Review your spending and saving habits

Is your mate into high-end clothing and cars? Ask yourself: Is he or she willing to go into major debt to maintain a certain lifestyle while sacrificing the basic necessities? If these priorities don’t match your own, think twice. Also make sure you are working towards the same financial goals. If one of you wants to save $1,000 towards a major purchase, but the other person is spending. Then you both need to decide on your priorities together.

3. Know each other's credit score and history

Anyone can experience financial difficulties at one point or another. However, a high number of delinquencies and collections are an indication of irresponsibility. Be honest with you spouse or significant other about your financial situation and history. Many banks, mortgage companies, and credit card firms now will provide clients access to their FICO score. Contact your financial institutions and find out how to get your FICO score.

4. Take a look at each other's upbringing and background

While not always the case, the spending habits of your mate may be similar to his or her parents’ patterns. Are the parents big spenders? Or, do you have a sense that they may need financial assistance in the future? There may also be undue pressures to live a lifestyle in excess of your income to keep them in the lifestyle they are accustomed to. It’s sad but true. Also understand the background and upbringing that each of you came from. One of you may have had a more modest upbringing, while the other had a more comfortable lifestyle. You need to understand these differences so you can understand how your mate views money.

5. Be transparent about money

Being financially transparent early on lessens emotional and economic stress. Don’t be afraid to share if you are in debt, your approximate take-home pay, what you like to spend your money on or how much you try to save. If you are looking at your relationship as a long-term investment and don’t know each other’s balance sheet, you’re gambling, not investing.

If you are looking for a Financial Consultant that can work with you to develop a strong strategy for next year - contact Stephen Westurn (214.240.0701) or Stephen@Westurnconsulting.com for a get acquainted session.

 

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