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The following post is by MPFJ staff writer, Greg Johnson. Greg is a proud husband, father, and debt crusader who is in the process of becoming debt free. Along with his wife, Greg co-founded the personal finance blog, Club Thrifty, where they encourage readers to “Stop Spending. Start Living.”
The topic of love and money has been a hotly debated topic for years.
It seems like every blogger in the personal finance world has an opinion on it. For some reason, the topic triggers very vocal opinions from both bloggers and non-bloggers alike. Chase Card Services decided to stir the pot in January and came out with their “Chase Blueprint for Valentines Day Survey.” Among other things, the survey specifically asks if people should discuss finances on the first date and reports that only 21 percent of respondents said that they would help pay down their significant others debt – which I find kind of shocking. The results have set off a firestorm of response posts in the personal finance sphere and got me thinking about when couples should begin sharing their finances.
In the past, I’ve made no secret that I believe that married couples should be sharing their finances. I believe that talking about money and handling your money together is one of the keys to building a strong relationship. When couples decided to get married, they are agreeing to share their life together. They are no longer individuals, but a unit that acts as one – both emotionally and legally. They share their lives, children, and property, so it boggles my mind that couples would choose not to share their finances. In fact, from a strictly sanitized viewpoint, one of the biggest advantages to getting married is the ability to combine your incomes and accomplish things as a team that would be unreachable for each individual alone.
Money issues are the number one cause of divorce in North America. With the divorce rate in the United States near the 50% mark, it should be painfully clear that communication about handling money is a key element in the success of one’s marriage. One may argue that not sharing finances is a way to keep arguments about money to a minimum. I completely disagree. Sharing your finances forces couples to be on the same page when it comes to money. On the other hand, not talking about money is one way to breed resentment toward each other.
Look, I’m sure that there are marriages out there where the finances are kept separate and are working just fine. However, for the vast majority of couples, I think this is a way to get into some serious money and relationship troubles. By not sharing finances, you can avoid taking responsibility for your actions. You are not forced to hold yourself or your partner accountable for handling money in the proper way – which is where both money and relationship problems can begin.
Since the finances of each partner affect the family as a whole, I find it absolutely insane that married couples would not help their spouses pay off debt. Whether you do or whether you don’t, the money is all coming out of the family’s pot anyway. You’re just playing a shell game of shifting money from one place to the other, so why not just openly pay the debt off together – particularly if it is student loan debt? The income which that debt helps to generate is theoretically helping the entire family. Why shouldn’t the entire family help to pay it off? Be a team, help each other, and avoid the possibility of resentment from either side.
When Should Couples Combine Their Finances?
If we assume that sharing finances is the way to go, when is the best time to merge those finances together? Should couples begin sharing their finances before marriage? Should you help your future spouse pay off their debt before you take the plunge?
Honestly, I think there is quite a bit of gray area here. In an ideal world, nobody would have any debt and couples would not have to combine their finances until the day that they are married. However, I’m not sure that is realistic. While I wouldn’t advocate somebody paying off their significant other’s debt after dating for only a few months, if you have made a commitment to each other and are engaged to be married, you may want to think about starting to pay that debt off before you tie the knot. Once you marry a person, you marry their debt as well, so why not start helping them pay it off?
Of course, this would also depend upon the size of the debt your partner has accrued. You want to be very careful about giving others your money before you are married. Paying off $1,000 in credit card debt before the wedding is helpful. Paying off a $15,000 car may not be the best choice to make. Always remember that if you choose to help a significant other financially before you are married, essentially, you are giving them a gift. Should you break up, they probably are not going to be required to give you back the money. While helping them out is noble and may help you both in the long run, you could also lose a big chunk of money if anything happens to the relationship.
So, there you have it. What do you think about my take on couples and finances? Should married couples pay off each other’s debts? When do you think couples should combine their money?
Let me know in the comments below!
***Photo courtesy of http://www.flickr.com/photos/allyrose18/179537772/sizes/z/in/photostream/