In a Relationship? Don’t Make These Money Mistakes

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Whether you’ve been with your partner for ten months or ten years, you probably make at least some financial decisions together. It’s easy to get caught up in having fun and not pay attention to the amount of money you are spending, especially at the beginning of a relationship. But couples that have been together for a long time can also feel that they need a vacation or another expensive break in their daily routine.

It’s easy to spend money frivolously, but it’s equally easy to simply get into a routine and never become completely financially savvy about money decisions, as well. Financial disagreements can cause serious relationship problems, and they are a high predictor of divorce. Regardless of how long you have been a couple, you should make it a priority to be on the same page about financial decisions. Here are five common problems that couples face financially and how to deal with them.

1. Not discussing your financial history

This is one of the biggest mistakes that couples make. You don’t need to spill your entire financial history — including the $5,000 department store bill you racked up last month — over pasta on your first date. However, when you start to get serious, and especially if you consider moving in together or getting married, you need to be honest about your finances. This means that you should discuss your debt and your usual spending habits, as well as your expected bills. If you get married or try to apply for a housing loan with your partner and one of you has debt that wasn’t divulged, it could affect your ability to obtain a low-interest rate loan.

Read more: 8 Tips to Get Out of Student Loan Debt

Most of us have made mistakes in the past, so don’t be too afraid to share your financial woes. As a couple, you can grow together as long as you are honest. However, be smart about what you do tell. If something in your gut is telling you that you don’t completely trust your partner yet, you don’t need to share that your wealthy aunt left you $50,000 last year, and so on.

2. Combining your accounts too early

Although it’s important to be as honest as possible, you don’t have to prove your love by sharing everything right away. Even some married couples keep separate bank accounts, and there is absolutely nothing wrong with doing so. You should be very careful when you are living together or sharing a bank account or other asset and are not married, because if you simply combine your assets but leave only one person’s name on the account, one of you could lose a lot of money when you break up. If one of you comes into the relationship with more money than the other person, it is very reasonable to discuss what you are both bringing to the table.

Read more: 5 Huge Hurdles to Saving and How to Avoid Them

In the case of a long-term relationship, you don’t want to hold your money above someone you love, but caution is a good thing. Until you make a long-term commitment, whether it’s marriage or a serious relationship that includes both of you planning for the future, you probably should not share all of your money. If you are getting married and one of you is coming into the marriage with more money, you might want to discuss a prenuptial agreement. Although many people are against prenups, if you discuss the matter before sticking it to your partner, they are much more likely to understand.

3. Not making a budget or not sticking to it

Once you are in a committed relationship in which you share bills and at least some part of your finances, you need to make a budget. Once you have a set budget, you both need to stick to it. One of the biggest issues that couples face is that often one person will spend money regularly and lie about it or keep it a secret. This can cause a large amount of debt to amass and also prevent couples from trusting each other.

If you have a set budget and you agree on it, then you both need to stick to it. If something comes up that one of you wants but isn’t budgeted for, then you both should be open to discussing these situations. If you are both open to changes in your budget when necessary, you are more likely to continue to be honest with each other.

4. Putting one person in charge of all financial situations

Although it might make perfect sense for one of you to pay the monthly bills, go grocery shopping, etc., designating one person to be entirely in charge of money can bring distrust and arguments. Despite having the best intentions initially, giving one person all the financial power in a relationship can be very detrimental to your coupledom, because the other person can be left feeling powerless or controlled.

Read more: 5 Ways to Save Money on Birthday Parties

Even if you decide that one of you should make the majority of the decisions, this should not be a definite determination in every circumstance. You should share financial decisions, especially regarding items that are not part of your regular budget. Be especially careful if you are married or in a long-term relationship and only one of you is the breadwinner. Making the person who stays home with the kids feel inadequate or powerless can also be extremely detrimental to the relationship.

5. Neglecting to educate your kids about money

If you have kids, it is important to teach them how to save. Especially if you or your partner had serious financial issues in the past, you risk having your kids repeat these problems if you don’t teach them otherwise. Your kids will learn the most from you by what they see you do regularly. You can teach them a lot simply by being responsible with money, but you can also set a good example by helping them pick out groceries, by giving an allowance for chores, and by teaching them about other financial matters. Your kids will thank you when they grow up and avoid huge financial problems.

Marriage isn’t just about love, and neither are other long-term relationships. Financial discussions are an important part of all relationships, and they need to be prioritized. In addition to the five issues listed above, couples often run into financial problems if they don’t have an emergency fund, if they fail to save for retirement, if they use credit cards to have fun or handle too much debt, forget to put both names on a lease, or neglect tax changes that are related to filing jointly or having a larger income.

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