Personal Finance | February 14, 2023

Love and Money: Sharing the Cost

Key Points

  • Financial compatibility is important in any long-term relationship.

  • A credit score is a tangible way to measure a person's financial backstory and attitude toward money.

  • Building your credit score might be a smart romantic as well as a smart financial move.

Dear Readers,

Don't think I'm unromantic but I can't help thinking about how important a role money can play in any relationship. On the journey from first date to life-long commitment, there are a lot of financial concerns that can cause more than a few bumps in the road. Because, bottom line, love affects not only your heart but also your wallet.

So while I'm a true believer in romance, I'm also very realistic about the importance of dealing with money openly from day one. In the spirit of helping couples understand how finances can impact a relationship, here are some thoughts on how to positively handle money questions at three crucial points in your love life.

Getting to know each other: Who pays for what?

Getting to know someone comes with plenty of uncertainties and, unfortunately, money can add another host of questions. Because right from the start there's the issue of who pays for what.

On a first date, it's not unusual for the person doing the asking to pick up the check. But it's also quite acceptable for the other person to chip in. As time goes on, sharing the cost of going out can make it easier on both parties.

Whether a couple splits the tab or takes turns paying, unless one person's income is significantly greater than the other's, cost-sharing seems the fair thing to do. It doesn't have to be complicated. To me, it's just being considerate and conscious of the other person's budget—which sounds like a good start to a relationship.

Moving in together: The financial side of sharing an address

Moving in together is a big emotional step. It's also potentially a big financial step. From housing to day-to-day living expenses to entertainment, there are bills to pay. For the sake of your relationship, it's best to talk about who is responsible for what.

For instance, if you're renting, will you split the rent 50-50? If one of you owns the home, how will the other contribute to housing costs? Then there are big-ticket items like furniture and appliances. Will you share the cost equally? Each pay for different items?

Likewise, day-to-day costs can trip you up if you don't agree on how you'll share them. Utilities, cable, Internet, cleaning services, groceries—these ongoing expenses can add up quickly. Figure out how you'll divide them. One approach is to come up with a monthly household budget and then each contribute an equal amount. If one of you earns more than the other, that person could offer to cover a greater percentage of the bills.

Paying for entertainment and travel is also a point for discussion. It's fine for one person to treat the other now and then, but neither partner should feel taken advantage of. There's no right or wrong way go about any of this. Each couple needs to find the approach that works for them. The main point is to be open with each other, and work together to find what's fair.

Marrying your finances: Questions to ask

In a marriage, you're a team, and having the same financial values can be an important part of your life together. Of course making a life-long commitment doesn't mean you have to share everything. To me, it's important for a couple to find the right balance between togetherness and autonomy so each partner can have some financial independence.

One way to do that is to take a "yours, mine and ours" approach, keeping separate accounts for personal expenses and a joint account for shared expenses. You could take the same approach to assets you already have, keeping those separate while sharing the assets you accumulate during the marriage.

This is the time for complete disclosure, which may involve asking more specific questions—including some that reveal underlying attitudes about money. Here are just a few that I think can be telling about an individual's financial values and a couple's financial compatibility:

  • If you get an unexpected bonus or other windfall, are you inclined to spend or save it?
  • What did your parents teach you about money? Do you share the values they taught you?
  • What’s the biggest money mistake you ever made? Your smartest decision?
  • What’s the most you would ever spend on a car, a couch or a pair of shoes?
  • What are your thoughts and feelings about debt? How much debt do you have?
  • How good are you at paying your bills on time? What’s your credit rating?
  • Are you inclined to keep your current assets separate, or do you want to combine everything? How about debt?

As you ask these (and other) questions of each other, be patient and open to a different point of view. The key is to be honest and forthcoming as you cement your emotional and financial relationship.

Taking care of each other—and yourself

While it may not seem very romantic, being aware of the potential issues that money can raise may be the very thing that helps love grow. So don't shy away from understanding one another financially. Rather, see it as an important part of taking care of each other, yourself—and the future of your relationship.

What You Can Do Next