Make Sure You're Financially Compatible With the Person You Love

When you're falling in love, the last thing on your mind is your bank account.

But when the high wears off and life's cold, hard realities set in, financial compatibility becomes important. The popular Slice show Til Debt Do Us Part chronicles the toll financial woes can take on marriages and families. But here's a well-kept secret: couples can make sure they're financially compatible before settling in for the long haul.

A 2010 study commissioned by TransUnion.ca found one in four Canadian couples don't think about or deliberately avoid talking about finances before getting married and only 22 per cent sit down to create a budget.

Kurt Rosentreter, a financial advisor with Manulife Securities, says young people don't start thinking about money until they're read to buy a house or start a family, usually around age 33 or 35. He also had five divorces in his practice last year, and figures money played a part in at least four of them.

If you and your partner are thinking about shacking up or getting hitched, you might want to consider your financial chemistry first. Here are a few things to think about:

Spending and saving
If one saves and the other spends, there's bound to be tension down the road. "If one's really nonchalant and the other's more careful and tracks it and reconciles their visa bills and does a bit of budgeting, it sets the stage for future trouble," Rosentreter says.

Big-ticket surprises
If your partner is the type to pick up an expensive flat-screen TV on a whim, be careful. When one half of a couple makes big purchases regularly without consulting the other, resentment can build up.

Sharing the money chores
In most households, couples divvy up the chores: he agrees to tackles the toilets if she does the laundry, let's say. But when this divide-and-conquer approach extends to the family finances, one person can get left in the dark. "When one person is totally in control, the other person can get taken advantage of," Rosentreter says.
At the very least, both parties should develop basic financial literacy skills.

Let's talk about bills, baby
If your partner is uncomfortable talking about finances, be wary. Rosentreter says avoidance could even be a sign that your would-be mate has something to hide, like a past bankruptcy.
But talking about finances doesn't have to be painful. The National Foundation for Credit Counselling suggests setting aside some time to chat, casually and honestly.

In the beginning, there were assets
Entering a common-law union or a marriage, it's possible that one partner will have more savings, a higher salary, property or even an inheritance. In these cases, Rosentreter says it's wise to consider a prenuptial agreement. The better-off half has more to lose if the relationship doesn't work out.

Financial dreams
If one person wants to buy a house immediately and take two vacations a year while the other is content with a simple life and a smaller income, something's got to give, Rosentreter says. The more financially ambitious person might want to think hard about their long-term lifestyle goals and how their partner fits in.