“Budget: a mathematical confirmation of your suspicions.” A.A. Latimer

Do you enjoy living paycheck to paycheck, get excited using one credit card to pay off another, or find fighting over financial matters with your partner something you look forward to? If you have answered, ”Yes,” to any of the above questions you can stop reading now- there’s no point in wasting your time with information you won’t use.

A good relationship and solid finances are nearly inseparable.  Seldom does one see a good working relationship that doesn’t have its financial affairs in order. By now you’ve been in a relationship long enough to know what kind of situation you’ve gotten yourself into, so the question becomes- what should you do about it? There are numerous, often unread and unused articles, on this very subject.  The approach below, though, is going to be different from what you’ve seen before.

The first step in getting your financial affairs in order is to determine what reality is. In more ways than one, fixing your finances is similar to finding a perfect fitting pair of jeans.  You know the ones that were made just for you, like a second skin. Your old favorites may not be working anymore. Just as having children can change your figure, it can also alter your budget. Depending on the changes in your life, you may need a better fitting financial plan. Neither financial matters or jeans are forgiving when the numbers are wrong. It becomes more important than ever to recognize things for what they are, so what are your current measurements, I mean, expenses?

The reason for learning what your expenses are is to see how much fat (expenses that can be cut) there is. If there’s no fat to lose, then you just need bigger jeans (more income). To determine what can or cannot be cut, there are some free on-line services that can help you organize your finances in order to see your expenses more easily, one that I prefer is Mint. It all starts with measuring things, as you cannot manage or change what you will not measure.

In the event you discover there is some room for improvement (physical or financial) the first step is to avoid making matters worse. Some people will try the all bread diet, similar to only paying your car payments. Other people will resort to diet pills or a special cellulite eating cream, nearly identical to responding to emails from exiled Nigerian princes or to bidding on the lucky number seven race horse!

An approach with more balance and a long term vision is the only real solution. This approach is called a lifestyle change. For your figure, it comes in the form of an active lifestyle and healthier eating habits. For your finances, it comes in the form of a balanced budget and financial planning. Despite the different subjects involved here, the tools and tactics used are almost identical. A budget, like a personal diet is created for a specific person, takes into account the current situation, what the goals are, and what resources are available.

Everything starts with planning, only once your current condition is evaluated, can you begin to set goals for the future and work for the lifestyle you desire. The video below provides a perfect example of what is at stake and the role that you will play in how things turn out.

Part of financial planning is learning about money and becoming comfortable with financial issues. Many women (and men) were never schooled on the basics of money. Unless your parents taught you or you took a course in finances (which is a great idea), it is up to you to learn on your own. My suggestion for the best financial book ever written is, “The Richest Man in Babylon,” and the best long term investments are Vanguard Index Funds, but you will have to find what works best for you.

Financial problems are one of the leading reasons cited for relationship failure. The good news is, of all the problems a relationship can have, financial matters are one of the easiest to find solutions for and fix. If staying married is one of your goals in life, then there is nothing more beneficial than financial planning. There’s no reason to become another statistic, what’s your excuse?

Please take the quiz below to see where your relationship fits and if you have suggestions or comments that opportunity is also provided.

For additional information check out the links below:

Older women without income

Educational money investing game

Financial planning for couples

“You don’t know what being screwed is until your ex’s attorney is the one doing it to you.” unknown

There’s a number of situations in life that most people would advise against ever putting oneself through. A long nasty divorce would have to rank right up there with coming into contact with a flesh eating bacteria. You’ll probably survive, but don’t count on emerging intact. While it is the intention of Keeping Score to help you avoid such an unpleasant personal experience, it still requires some action on your part. More specifically, if you value your relationship, your next intimate encounter should include financial planning for the future.

When I was conducting the field research, as part of testing the Keeping Score model, I saw a wide variety of ways in which couples prepared for their future. All couples thought financial planning was important, but only a few had bothered to take steps towards getting their financial affairs in order. Planning was something most couples said they intend to do…when…as soon as…after…at some point in time in the future. Is it really any wonder financial issues are a leading source of conflict in relationships?

The first step in preparing your finances for a joint future is to determine whether or not a prenuptial is needed. When it comes to prenuptial agreements, there’s a surplus of extreme reactions and simple thinking. Regardless of what your views on premarital agreements might be, the subject is worthy of an open and honest discussion.

Even if your relationship is made of the stuff that makes a prenuptial unnecessary, consider this~ is your relationship at the level where you can discuss the issues a premarital agreement would address? Long term relationships require more than just physical intimacy, getting naked financially brings new meaning to the term “fully exposed.” Below is a self checklist to see if your relationship should consider a prenuptial agreement.

Six Premarital Agreement Triggers      

1. If you or your partner have a substantial debt load. Not all debt is the same, credit card debt vs student loans. In many cases once married those debts are shared. 
2. If you or your partner have any children from a previous relationship. In cases where the children are still under 18 this subject becomes very serious. In the event of a death many states will automatically assign 1/3-1/2 of the estate to the surviving spouse if prior arrangements haven’t been made.
3. If you or your partner are supporting the other while additional education or training is being received or someone is giving up their career for the relationship. Relationships require sacrifices, make sure these actions are recognized.
4. If you or your partner dislike the idea of the government getting to make the personal decisions in your life if your relationship were to fail. People in the midst of a separation can be less than rational and it may take outside intervention to settle matters.
5. If you or your partner happen to be part of a family business or other privately held business partnership. If your relationship were to fail it could have devastating impacts on other innocent parties. Mixing your personal affairs with the financial interests of others outside the relationship is bad for everyone involved.
6. If you or your partner have specialized skills, accumulated significant financial assets, or anticipate a much higher future level of earnings. Examples might include holding copyrights or patents with commercial potential, inheritances, existing investments or retirement accounts, housing, or having an exceptionally lucrative career.

Not every relationship will have conditions where a prenuptial agreement should be considered, nor will all couples decide to have a premarital agreement drafted. There are, however, no exemptions for not engaging in financial planning prior to marriage. Financial issues touch all corners of life and relationships that cannot address financial matters will have difficulty in other areas as well.

Financial planning starts with you and your partner being open and honest about everything financial in your lives. This means getting completely naked, showing all the assets, sharing credit scores, and a full disclosure of liabilities. Call this game “Playing Banker,” but the rules are different than the similar sounding childhood game you might of played- this time it’s “You will show me yours and I will show you mine.” The video below is also a useful reminder of why blind trust (when it comes to money matters and your partner) can be a mistake.

It really does pay to have your financial affairs in order right from the start. Money matters are a leading source of relationship conflict and are a primary reason for relationships failure. That’s a complete waste, as couples can easily prevent most financial conflicts if they will make financial planning a priority. The tools needed to deal with premarital finances are readily available and even free in most cases. Some good places to start are Mint , WIFE, and  Women’s Finance. All of these sites are free and the services offered are completely professional, what’s your next excuse for not getting started going to be?

While this post has brought the issue to your attention, it’s up to you to do something about it! Playing “banker” before your relationship starts is one of most effective ways to keep you and your partner playing “doctor” for the rest of your lives. While no one ever intends for their relationship to fail, not planning for your financial future together should be considered planning to fail. You and your partner can do better, start by taking the sample quiz below and any comments you have on this subject are welcome.

For additional information check out the links below:

Prenuptial Agreements   A book to help couples draft a premarital agreement that best works for them

The Seven Pearls of Financial Wisdom   A book focused on the unique financial issues women face

Good Example of Planning   The type of guy every father wants his daughters to bring home

 Before You Do  Financial matters to consider prior to marriage