In honor of Valentine’s day’s this month I am launching a 3-part series in support of making love last. Money is a common reason why happy couples decide to separate. I want to encourage more positive money conversations as individuals begin, commit to- and leave a relationship. At the end of the day positive money dialogue can often lead to more satisfying relationships. Even if the relationship doesn’t last- it can potentially reduce money conflicts as couples negotiate how they will divide assets they built during the relationship. This is a good thing for love, for families and the court process. Read on for Part 1 of the Cost of Love series: a checklist on the money conversations you need to have during the dating and cohabitation phase of the relationship.
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Typically, the expectation is, if you are the person who invited someone on a date you would pay for the date and vice versa. Often first dates aren’t expected to be fine dining experiences, or luxury events. They are more of an opportunity to get to know your date in a relatively quiet place. One where a drink or meal is not going to break the bank.
Coffee dates are a popular choice where prospective couples can learn about each other without a major financial or time commitment. If the date doesn’t work out, you can finish a coffee in either 20-30 minutes. Or you could linger for hours at a relatively low price point. The invitee does not feel obliged to hang out if they don’t feel any sparks and neither does the asker.
Keep in mind those early days of dating are about getting to know the person. If you are invited to a lavish date and you suddenly realize there are no sparks, you may want to go Dutch when the bill comes. It can prevent hard feelings if you’re the object of someone else’s affection.
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There seems to be an unwritten rule at the third date. At that point you both should have a sense on whether the relationship has legs. If you are the person being asked on a date perhaps you may have thought your partner’s willingness to pay over the last 3 dates indicated their level of interest in you. Social attitudes and gender expectations towards how long one person should pay for a date has been around for many years.
At the same time, consider what you know about your prospective mate’s financial circumstances. For example, do they seem financially secure based on what they have told you about their career or financial position? Have you offered to split the tab for the meal by the third date? How did they react? Gaging your prospective partners responses around who should pay for the date can be a starting point. Before love, you can get a sense of how you will handle money conversations as a couple should the relationship last.
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You’re in love. Now what? Two really important factors to consider here: The first is who earns the higher income and who has more disposable income after expenses. Keep in mind that the person who earns the higher income does not necessarily have more disposable income after expenses. They may have child support, spousal support, and carry high interest debt. They may also lack financial knowledge which is preventing them from properly tackling these issues.
The lower income earner on the other hand could own a home with no mortgage, have rental income and no personal debt, leading to a much higher disposable income. Assuming the higher income earner has significantly higher income and disposable income, a good rule of thumb is to divide the higher income earners salary into the lower incomes salary to determine the percentage each should pay on joint expenses such as a vacation. For more information on this check out my article how to deal with financial inequities in a relationship.
Answer: The sooner the better.
As the relationship develops there will be more and more opportunities to talk about money. Also gage your partners level of comfort when it comes to openly discussing money. Are they cagey when it comes to having money conversations or are they open? What have you learned about their childhood, financial position, and attitudes toward money as the getting to know you process unfolds? Are they a spender or saver? Do you share similar money values? Remember opposing money values often lead to more conflicts in a long-term relationship even if everything feels lovey- dovey in the beginning.
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The reality is talking about money can be challenging. It a skill that is worth mastering when there is so much as stake. Take small steps by having a money conversation with yourself and then inviting your partner to learn more about how you deal with your money. Be prepared to have a vulnerable conversation where you disclose small financial details about yourself. You can talk about how you created a budget after realizing you did not earn enough for your wants. Or not that you recently started to invest to your RSP after spending years worrying about your retirement. Reach out to a certified financial planner if you need help starting a money conversation with yourself.