Today rules have changed. Traditional marriage was between a man and a woman. However, some states now allow same-sex marriage. In some cases, the term partner or soulmate has taken the term spouse over. The thing that has not changed in a committed relationship, committed being the operative word, is how finances are managed.
It is always good to have someone to help you navigate and sponsor the ins and outs of this life we live. However, for money and finance, the right partner makes a vast difference. The ambiguity of the “I’ve got you covered” statement should leave anyone hearing it to ask what exactly that means. When you hear those words, it becomes the perfect time to review current financial conditions and entries. It is also time to develop a financial plan for this partnership.
There are several types of partnerships. Full partner support should incur a minimum of 50% of all incoming and outgoing financial responsibilities. Limited partnerships lessen the responsibility on one partner in some or all areas. Silent partnerships, in general, allow for one person to provide financial support having no input in how things are set up, managed, or operated.
Once decided what type of partnership you are involved in, you will need to develop a financial plan and or strategy that will fully benefit your existence. That may include having separate accounts and financial responsibility for some or all items. This will only help your partnership grow and flourish.
Money, the lack thereof, or the execution of how funds are spent is one of the most important interactions in any committed relationship. According to fatherly.com, in an article about the 12 top ranking arguments that couples have, numbers 5, 6, and 7 all had to do with money, its source, and how it is spent.
20% of couples take up over 50% of their relationship in some form of an argument over finance. Developing a plan and/or strategy and sticking to it should eliminate at least ½ of these arguments. The challenge comes in sticking to it.
The plan itself should outline the following:
▪ What, if any bills you will pay as well as what your partner will absorb.
▪ Decide how much money you both will allocate to savings.
▪ Consider setting aside supplemental funds for retirement outside of any current retirement plans.
▪ Who will contribute to what and for how long?
▪ Who will cover medical costs current and long-term?
▪ How much life insurance will both of you need?
▪ Will there be/are there children? Who will care for the children and what is the cost?
▪ Will there be college funding set up for each child? If so, who will provide the college fund?
▪ Will there be other family members to live with you? If so, who will support them?
There should also be a discussion regarding a contingency or emergency fund to cover any expense that is not in the immediate budget.
Additionally, partners need to discuss the dividing of assets if things in the relationship do not work out. You should always do this when things are good, not when things have gone bad. It will keep an unpleasant situation from going worse, especially if the terms upfront are equitable and include any new ventures or future assets or asset growth.
Time is the only asset that cannot be recouped. Making things fair all along the way cuts out a multitude of heartache and drama. The old saying once was “happy wife, happy life”.
Today’s equivalent might be happy mate, happy life. Just make sure that no matter what, you know what “I’ve got you covered” really means.