Financial Compatibility

Valentine’s Day is a big deal. In 2013, the annual Valentine’s Day spending was $13.19 Billion, according to the Retail Advertising and Marketing Association, Valentine’s Day Consumer Intentions and Actions Survey. What is it that makes this holiday such a high cost and high expectation day? For some, it is attempting to use mind-reading to figure out the right gift. For others, it might be the fact you can’t afford, but still purchase the seemingly ideal gift for your significant other, then worry about what you bought and what you spent for months to follow.  It can be a source of great joy as well as great disappointment for many couples. Communication can go a long way in alleviating some of these issues for Valentine’s Day, as well as many other money-related issues.

Figure 1: 2013 Fidelity Investments Couples Retirement Study

Figure 1: 2013 Fidelity Investments Couples Retirement Study

Therefore, I wanted to introduce a slightly different angle to what might help keep the peace and harmony in your relationship this year, other than the obligatory box of chocolates.

If you are a couple just starting out, either engaged or newly married, begin having discussions about money topics. A great resource is a book called, “10 Great Dates Before You Say I do” that will help you have open discussions about key financial topics. This is an easy way to ask and answer some of the less obvious questions about each other’s money habits.  Compatibility in financial issues is a critical component to long-term healthy relationships.

Once you have survived February 14th, consider some great dates for the rest of February that help you and your spouse improve your own financial conversations. The following might serve as topics for discussion:

  • Know what you own and what you owe
  • Learn each other’s comfort levels with regard to risk
  • What are your expectations for spending individually vs. joint buying decisions
  • How best to handle the day to day expenses so there are limited “surprise” expenses
  • What are your comfort levels with ongoing debt
  • How to divide and conquer ongoing financial tasks for your family
  • Finding an advisor that you can both be engaged and comfortable with as they assist you in financial decisions
  • Discussing expectations for educating your children including any payment responsibility on the part of your child, as well as how much you are willing to contribute
  • Discussions for retirement expectations, what these might cost and how to jointly prioritize your goals

If you’re already a couple and wondering where you stand with regard to financial compatibility and the average couple, try out Fidelity’s Financial Compatibility Quiz with your spouse. It is likely to prompt some great date discussion fodder for you as well.

Sharing your values, your goals and your visions for the future will help you become a stronger couple, moving forward in a more coordinated and compatible way with regard to your financial future. Additionally, it may serve you well in the communication department and pave the way for many more Happy Valentine’s Days to come.