Managing finances is tricky enough for individuals. But when two become one, the challenge takes on new dimensions. The stakes are high for new couples to keep the romance alive as they navigate their finances together.

New couples have a choice to make. They can choose to open up about their finances or not. Those who are successful will watch their nest eggs grow and progress towards shared goals.

Success simply starts with an open dialogue. When it’s missing, arguments are inevitable.
“While fighting about money is not necessarily as common [for married couples], those arguments tend to be longer than other arguments, they tend to be more damaging to the relationship than other types of arguments,” says Sarah Newcomb, Morningstar’s director of behavioural science. “Finding ways as a new couple to communicate in a healthy way about finances is really important.”

Stage 1 – Dating seriously

Money is consistently cited as the top reason for stress among American adults, according to the American Psychological Association.

“Every year, regardless of the economic climate, money is the number one reason for stress in people's lives,” says Newcomb. “We're stressed about money and talking helps reduce stress, but we don't talk about money.”

Newcomb describes talking as emotional first aid. “Whether or not you merge your finances as a couple is a separate question from whether or not you need to learn how to talk about money as a couple,” she says. “You need to talk even if you never combine bank accounts.”

People who feel that they are moving towards a committed relationship need to start a dialogue about finances, says Jeanette Brox, a senior financial consultant with IG Wealth Management in Toronto. “When you're in the dating stage, you can kind of get a sense of what their values are around money, family history and how they handle debt.”

How do you start chatting? “The first conversation shouldn't be about your credit scores or how much you earn or how much debt do you have,” says Newcomb. It starts with “get-to-know-you questions like what was money like in your household growing up? What does the good life mean to you? Does money keep you up at night? Do you think of money as a necessary evil or as freedom and opportunity?”

“Ask these questions with curiosity; not with a desire to judge but the desire to learn more about your partner,” Newcomb adds. “That way you can have a deeper understanding of who your partner is and what the stories are that are driving the financial decisions that you two make.”

Extra support is available. Newcomb points out that “the Gottman Institute has great free communication tools and apps for couples on learning how to talk about difficult things together, which is the key to having a solid financial life together.”

The dating stage is the best time to catch warning signs, according to Brox. “A red flag is if your partner reveals to you that they’ve got $10,000 in credit card debt and it doesn't seem to faze them.”

Brox says that if your partner has any form of debt, from student to consumer loans, it’s a good idea to ask about attitudes towards paying down debt. “Credit scores are really important when you're contemplating buying a home and qualifying for a mortgage,” she adds. Therefore, your potential spouse’s credit score may have a significant impact on your financial ability together.

“Once you start saying ‘I think we might be combining lives here’, then you've got to start asking the more specific questions,” comments Newcomb. This will likely happen when you consider moving in together because all of a sudden you have shared expenses, she says.

Stage 2 – Moving in together

“By the time you get to budgeting and splitting bills, you should already be comfortable talking about money with each other,” says Newcomb. If splitting bills is the first conversation that you're having about money, “it's going to be all kinds of awkward.”

“It's just not going to be easy to come to an agreement if you've never talked about money [and] now you're divvying up expenses,” Newcomb adds.

“Budgets are not sexy,” says Brox. “It's certainly not romantic but that's the reality.” She advises couples to sit down at the end of each month and go over the budget. “I like the idea of having a money date night with a reward in it,” she says.

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It is just as important to keep the romance alive as it is to have financial discussions. So light some candles, break out a bottle of wine and pull out your bank statements. Or at least try to make it light and fun, if that helps.

Splitting expenses comes down to asking each other “what feels fair”, says Newcomb. “Let's say one person makes three times what the other person does, then you might want to split the bill proportionally.” That would mean one partner pays 25 percent and the other pays 75 percent. “Other people just want to split it 50/50,” she adds.

“At some point, there needs to be an ‘I'll show you mine and you show me yours’ numbers conversation where you will show one another your debt and your assets,” says Newcomb. “So many of us will combine our lives, and never sit down and have that conversation where you just simply show one another your accounts.”

Newcomb comments that avoiding the subject is why so many relationships end up in divorce over money; the truth will come out and partners’ finances affect each other.
“It's a level of intimacy that a lot of couples don't have,” Newcomb continues. “It's a scary intimacy because it requires trust to show someone your situation. Often we are afraid of being judged and what our spouse will think of us if they know our financial situation. Some people are afraid to be judged for having too much. Some people are afraid to be judged for having too little. People are afraid to be judged for being disorganised.” She recommends bringing up the subject in a non-threatening way.

According to Brox, it’s important to tell the truth. As a basis for a committed relationship, “I don't think that being dishonest about how you manage money is a good foundation,” she says.

Brox says couples “need to have the financial planning and financial future conversations long before they tie the knot. They need to talk about the way they manage money and how they're going to manage money going forward. That means what goals they want to accomplish as a couple.”

After the most difficult conversations take place, “That's when you can feel at peace and feel truly close,” says Newcomb. “It will only make what you have stronger.” She recommends a follow-up that will likely appeal to lots of couples. “After you've done it, celebrate that you’ve done something that a lot of people don't do, and you're probably setting yourself up for more success because you did the scary, courageous thing.”

This article originally appeared on the website of Morningstar Canada.