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David Mulonas

#50 - Relationships, Personal Finance and Divorce. When is the Right Time to Discuss the Budget?

Updated: Mar 3, 2022

Hi. I am David. Do you like my Roy Dobbler Coat? I've been noticing you from across the bar. I like your flowery shirt and I think you look like you might have a good credit score.


Hi, I am Cindy. I noticed that you have a Costco Card. Do you want to buy me a drink?


So this is a mock example of the conversation that David and I the night we met. What we’ve outlined is that people can see one thing that is appealing; however, you never know what financial habits might be lurking behind someone’s appearance.


The night David was in an old favorite dress coat from the 80’s, and I was in a new more expensive shirt, for me anyway.


We’ve talked many times about budget habits, spending habits, and the smoke and mirrors that someone could create in what may be an unknown pool of debt or an unknown nest egg of money. One golden rule is to never judge a book by its cover or one's net worth based on the car he or she may drive. The question is . . . when is it time to reveal your cards once you start seriously dating?


For me, when I saw David’s Costco card when he went to pay the dinner bill the night, I saw a shopping trip! For David, he saw a cute lady in a really bad shirt! The fact is the shirt I was wearing was brand new and I paid $60 for it at Anthropologie that day. To be honest, I had no business buying it because in truth, it was the last thing I could afford in the budget.

Alright, so maybe you’re not asking your new found love for a full financial chronicle on your first or second date; however, at some point as you’re starting to get serious, this needs to be a conversation. So what is the right time? Well, imagine only learning about your new spouse’s financial situation on your wedding day.

“Do you take his $50,000 of consolidated credit card debt?”

“Do you take her $20,000 of student loan debt?

“I’m thinking, this is probably too late to have a serious money discussion.”

Statistics Around Divorce

Set let’s throw out some stats around divorce. First off from most of the information out there says that money is the #1 reason.

The actual divorce rate is hard to pin-down; however, it appears to be between 44 - 50% based on the metric that is used.

Okay! So let’s dig in on this a little bit; and this information is according to itsovereasy.com which takes data from the Census Bureau and the CDC.

According to the US Census, the rates of marriage and divorce have decreased over the past twenty years.

When analyzed independently, rates of divorce and marriage differ for women. The US Census Board asserts that this is because women often report data for themselves and disclose information more accurately.

Approximately 50% of Americans ages 18 and older were married in 2017. This is down by 8 percentage points since 1990.

Baby Boomers which are 60-plus in age, are divorcing at a much higher rate than any other group.

U.S. States With the Highest Rates of Divorce

Three states – California, Connecticut and New Jersey – have some of the nation's highest median income levels and lowest rates of marriage.

Three states – Alabama, Kentucky, and Oklahoma – have some of the nation's lowest median income levels and highest rates of both divorce and marriage.

U.S. States With the Lowest Rates of Divorce Per 1,000 Residents

Illinois – 1.5

Louisiana – 1.7

Massachusetts – 2.1

Iowa – 2.2

Kansas – 2.3

Georgia / District of Columbia – 2.5

Texas / Maryland – 2.6

Mississippi – 2.7

Michigan – 2.8 8

The Relationship May Get Serious

We've talked ad nauseum about where I was with my personal financial situation when David and I met, so we won’t beat a dead horse here, but we do think this is an important topic to talk about.


The fact is David was better off than me, but he had also lost a lot through his divorce, he’d just finished college getting his masters, and he was also raising Chase with almost full custody.

We had a lot in common, and once we got serious, a lot to talk about where our life was going together.

You obviously don’t want to talk about money too early in the relationship, but when is the right time? We think being is honest is key. Don’t try to snoop on desk tops or phones, because you definitely don’t want to violate any trust,

Some basic questions that are safe ground are the following:

Are you putting money away in your savings account? Are you living paycheck-to-paycheck or do you subscribe to the F.I.R.E movement?

Do you have any student loan debt?

Here is an additional avenue that you can watch out for: Is your new flame suggesting that you split the food and drinks at the restaurant? Does your new loved one suggest staying in and cooking with recipes from the Frugal Gourmet?

Are you eating at the fun pizza place or the hottest new restaurant?

The fact is, none of these indicate the real story. David was driving an old, paid-off automobile . . . his Volvo, and I was driving a brand new car with a lease payment.

The thing is, these situations are not intrinsically good or bad and we don’t pass judgement morally whatsoever; however it is imperative to look at each other’s spending habits so that it helps you figure out your financial compatibility.

This is not an easy conversation, but you have to discuss your feelings about finances in detail. After all, it’s better now than to find yourself in bankruptcy proceedings or divorce court. Plus, finding a trustworthy attorney or divorce lawyer to split up the assets can be challenging.

Financial Tips With Your Partner

Here are some financial topics you should discuss with your partner—ideally, before you get married or live together.

Should you have one bank account or two? We talked about this in Podcast #13. Even if you’re ready to cohabitate, you might not be ready to merge your bank accounts. Breakups happen. No one expects to stand at the altar in anticipation of divorce.

Consider this: laws that cover assets for married couples are definitely not the same for couples who haven’t said their I do’s. What are your financial personalities? Understanding your belief system and discipline about money will go a long way in your overall communication. When you have an open discussion, you’re better suited to build a solid financial house, foundation, and strategy to reach the same goals together.

So . . . how much do you really have? Transparency about what you have in your savings and retirement, along with what you have in mortgage, consumer loans and credit cards is key. You need to understand what you will be entering jointly even if you create and manage budgets separately.


If you have debt, both parties need to understand what the work plan is to pay it off and what strategy that will be over time.

So, how much savings do I have to spend on my girly stuff every month? As a couple, how much money do you each bring home every month, and what are the regular expenses such as mortgage/rent, debt repayment, food, utilities, auto insurance etc?

Knowing these details will help you budget and plan for your future together, which includes that almighty goal we consistently discuss, which is retirement baby!

Joint Agreements as a Couple

What arrangements will you have together? How will you organize all of your accounts? Do I get a separate spending account? Or should we create a joint account for bill payments? A bonus to that thought is that bill consolidation may help you save on service fees.

What do we want to accomplish in the next 1-3 years? Perhaps a trip to Italy? A new house? Are you on the same page for retirement. Do you have a 401(k) plan and where you might want to live?

How are we going to compromise? Do we take a weekend getaway instead of a long trip? Do we get Tokyo Sushi instead of going out for a night on the town? How about a date night where we watch a movie?

Personal Finance Deal Breakers

So what's the deal breaker? What’s that last straw? If your partner comes to the relationship with a certain amount of debt, will you walk away? Will the secret online shopping accounts break the camel’s back?

You need to lay it all out on the table. When it comes to comparing spending habits remember, you did hade a life before you met. Some of us collect things, some of us need retail therapy, but as long as you come together on how best to accommodate who you were before you met, make sure you set reasonable expectations to save for bigger things such as a home or car purchase.

Honesty is the best medicine. Secrets don’t lie . . . keeping secrets can have a serious physical response on your body. You will lose focus, you might not sleep well, and it expends energy. You may be irritable and you may become full of anxiety and stress trying to anticipate the outcome. Lying now will cause stress and arguments in the future. Your partner is sure to find out what you're withholding. Debt, spending habits, actual income or the late credit card payments.

The goal is to fess up and work together to solve any issues that you uncover. If it’s more than you are willing to take on, or more than you are willing to give up, then find out now so you can move on.

Is your love stronger? Only your honest conversation can decide!

Let’s Do the Recap

#1 Relationships are exciting and time goes fast; so enjoy yourself for a minute until you have to get serious.

So after you’ve made some bacon then, you have to talk about who will be buying the bacon in the future.

A good piece of advice is not to pry early; however, having general conversations around being able to save, living paycheck-to-paycheck or student loan debt are safe topics to discuss.

So in time when you and your partner stop over-giggling with the bad jokes and your courting process turns into planning trips, long walks with the dog, and the visiting family says that he or she is “could be the one,” then at this point the natural conversation centers around the future.

So when you have this conversation make sure that it is planned. Turn on some music, light some candles and perhaps pour a glass of wine - just like you did when you first met. So do your homework to have the statistics about your personal finance tips and goals and your budget habits before you meet.

Then during your conversation be honest - never lie! Be humble and understand the premise is not to compare one’s successes or failures rather, look at what you both can improve on to set your goals for the future.

The ultimate goal of your budgeting conversation is to make agreements on what you want to keep in your life, what you’ll give up, what debt you need to eliminate, and what your retirement planning needs to be. We can almost guarantee that you’ll feel better after this experience so then you can turn down the lights and turn up the Marvin Gaye so that you can have a great rest of your evening. #bloggingtips #WixBlog


Episode Link:

Talking about finance in a your relationship


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