If I asked you what kind of person you’d like to spend your life with, you’d probably say you’re looking for someone who is attractive, funny, smart and well-traveled. One last thing: he or she should also have a great job.
But, even if your perfect mate seems to check all your boxes, you still should dive a little deeper by considering the unsexy, real life stuff. For example, you should take into account how your prospective partner handles money. Is he or she a spender or a saver? Does she use a bank that doesn’t charge fees? Does he pay his bills on time or readily use money-saving apps?
While money is often a taboo topic when you’re dating, it’s an important part of the potential mate portfolio. In fact, money is the No. 2 cause of divorce, according to Marriage.com.
“Couples fight over different money habits because there are fundamental differences in their value systems,” says Yulin Lee, Founder of Project M: Mind and Money.
Want to know how financially savvy your mate is – before you say I do? Here are 4 indicators that will give you a glimpse into your partner’s money habits.
1. Your mate has goals
You’ve probably read inspiring stories about people who embrace FIRE (financial independence retire early) and as a result of their smart money decisions, they’re able to travel the world, volunteer, and write books about it.
These people all have one thing in common: they have goals – meaning they have hopes and dreams of achieving more in their lives. Hopefully, your mate has goals and strives hard to achieve them as well.
So, ask the hard questions before saying “I do” and open up about short and long-term goals. Do you want to retire by the age of 45? Does your mate want to start a business someday? Lay it all out on the table.
2. Your mate has awesome communication skills
Poor communication skills ranked No. 3 in the Marriage.com list for why people divorce.
When you have open lines of communication, this brings you closer to your mate, according to marriage expert John Gottman.
So, sit down with your partner and discuss what’s important – to both of you. This will help you define shared values and build a solid foundation together.
3. Your mate has the money basics down
An important indicator of how your partner handles his finances will boil down to how much (or little) money he saves. While every situation is different, you should strive to save for these two key goals:
- Emergencies and unexpected expenses. Indeed, it’s key to have an emergency savings account.
- Retirement. If you want to enjoy your golden years and have enough money to live comfortably and pay your bills, start saving and growing your retirement fund – now.
As your relationship with your beau becomes more serious, you should also get the scoop on more detailed financial factors such as:
- Budget: Does your mate have one and actually stick to it?
- Credit score: What is it? High, low or somewhere in the middle?
- Overall debt: Does your partner have student loans, mortgages and credit card debt? If so, how much?
Understanding how your partner saves, spends and budgets will help you both work towards joint financial goals.
4. Your mate aligns money with values
Value-based spending is a great way to get aligned with your money. Why? This gives you a deeper sense of meaning as you’ll be saving or spending your money based on what’s important to you.
For example, if sustainability and recycling is a way of life for you, perhaps you only shop for clothing at thrift stores or consignment shops. Or, perhaps you value outdoor activities and limit your TV and movie expenses to free up funds to travel to national parks. Pro tip: if your mate does this, she’s a keeper.
The key here is to figure out whether you and your mate value the same things, as this will make it easier to align your spending habits. Once you’ve aligned your money with your values, it’s time to establish a routine. As a starting point, establish a budget and follow up with it each month, says Lee of Project M: Mind and Money.
“Schedule it on the calendar so it doesn’t fall through the cracks when life gets busy. Set specific saving goals, and a plan for how to invest them. Tie a reward to the goals to keep the motivation going because human beings don’t always respond well to long term benefits,” says Lee.
Opposites Don’t Attract
Perhaps certain pairings make sense: introverts and extroverts, tall and short, drinker and designated driver. But, when it comes to money, couples need to be on the same page.
It’s hard to imagine a big spender and frugal person living together blissfully. Maybe there are exceptions, but that’s probably because they communicate often and compromise to make it work. But, for the most part, the way you manage your finances is a clear view into how you lead your life.
Money is unavoidable – you need it for just about everything. So, think about your spending habits and those of your partner. Work together to align your spending and savings goals. For example, maybe you want to align your desire for more freedom to travel and don’t want to live paycheck to paycheck. If your mate also feels this way, together you can create a money plan and budget that reflects these goals.
“A mutual understanding of each other’s past and a shared vision for the future are the key foundations for creating financial success together,” says Lee.