Before you say "I do" - even before you pop the question - there's an important chat you should have with your partner.
No, it's not the talk about whose family you'll see during the holidays (although you should probably discuss that, as well). It's a talk to see if you're financially compatible.
That's right - financially compatible.
You and your partner should obviously discuss you're the specifics of your financial positions. Share details such as how much debt each person carries, how big of an emergency fund each person has, and how much each person has saved for retirement.
But beyond talking about present-day specifics, you and your partner also need to make sure you're aligned on your goals and values. Here's some background to help you have a more big-picture, conceptual conversation with your mate.
What's Your Risk Tolerance?
Bethany and Scott Palmer, co-authors of the book First Comes Love, Then Comes Money, have categorized people into five "money personalities."
The Security Seeker - When it comes to money, the security seeker wants the safest option available. This person is drawn to safe investments like CD's and is repulsed by the idea of losing their hard-earned cash. They like to plan ahead for the future and they do their due diligence before buying real estate.
The Risk Taker - This is the opposite of the security seeker. The risk taker is likely to buy individual stocks, flip properties, start a business or even try their hand at day-trading.They think conceptually rather than drill down into the nitty-gritty. They're excited by possibilities and tend to see opportunities where others do not. They often listen to their gut.
The Spender - The spender believes money is meant to be exchanged for goods and services. They tend to live in the moment and they get a little thrill from the purchase. They're not necessarily rich people, they're simply people who enjoy spending, even if it's at the discount mart. They also buy freely for others, so they are sometimes viewed as generous.
The Saver - As much as the spender gets a rush from spending, the saver gets a rush from finding a great deal. Savers love to bargain-hunt and they know the price of goods down to the penny. At the grocery store, Savers comparison-shop by checking the "price per ounce" or "price per unit" of each item. Savers are horror-stricken by the thought of paying interest on consumer debt or credit card debt. They have a hard time parting with money, so they sometimes come across as cheap.
The Flyer -- If you're a flyer, you're probably not reading this. Flyers don't think about money at all. They'd be equally happy in a run-down shack or a McMansion. They have no emotional response to spending on a designer handbag, scoring a great bargain, or making a major gain in the stock market. Flyers simply don't think about money. They may interpret savers or risk-takers to be obsessed with thoughts of money.
Bethany and Scott Palmer say that most people have a "primary" personality among these five, and a "secondary" personality among these five. So when couples start combining their finances, there's plenty of room for personality clashes. (Of course, there's also room for opposite personalities to counter-balance each other!)
Before you say "I do," sit down with your significant other and look over these five personality profiles. Ask your partner which one or two profiles most closely resembles them, and share with your partner which one or two profiles fits your bill.
Let that be a starting point for a discussion about what you financial dreams and goals are. Do you want to eventually become a real estate investor? Do you think you would ever want to flip houses or become a landlord? Would you like for both of you to retire in your 50's? Do you tend to invest your retirement funds in stock funds, bond funds, or cash?
Ask for examples of how your partner reacted to specific events. What did each of you do the last time the market crashed - did you panic and sell, or did you swoop in and buy more? What did your partner do?
This conversation will help you and your partner get past the present-day nitty gritty - "I have $5,000 in my savings account and $12,000 in student loans" - and see the bigger financial picture. This will become a discussion about risk, hopes, fears, your values, goals and dreams.