Romance And Finance - the handling of money has become more important to realtionships - Brief Article

Ebony, Feb, 2001

THE popular '80s song by the late disco diva Gwen Guthrie would have you believe that there's "nothin' goin' on but the rent," and that you've "got to have a j-o-b if you wanna be with me."

Nowadays, however, romance and finance is about a lot more than rent-paying and earning a paycheck. It's about mutual funds and 401(k)s. It includes stock portfolios and credit-card debt. It covers student loans and car financing. It even delves into life insurance and home mortgages.

In today's world, with the complex forms our finances can take, and with the perplexing emotions surrounding romance, love and money are strongly linked. Money ranks at the top as a relationship-buster, often ahead of sex and intimacy. And it takes a lot of time and effort for couples to come to a money understanding. Experts say honesty is always the best policy.

"Shared information is the best way to avoid a fight ...," says Brooke M. Stephens, an author and financial advisor from New York. "Money and marriage is about being adult, mature and responsible."

Adult? Mature? Responsible? Sounds simple enough. But if you've ever been in a relationship, you know it's rarely simple.

To help ease the way for Black couples, here are some tips for making sure that money doesn't destroy love.

START TALKING

The first step is to talk about your money philosophy. Does your significant other pinch every penny because money was fight growing up, or does he or she spend freely as his or her parents did?

Understanding each other's feelings about saving, spending and investing will give you a solid foundation to work through your money differences when they come up in your relationship.

While the subject may be a difficult one, it's important to bring it up as soon as you realize the relationship is heading toward commitment. It probably isn't wise to bring it up during the first couple of dates, but you still can get a pretty good idea of a person's money habits just by being around him or her, experts say. If they use a lot of credit cards, they may have a lot of credit-card debt. If they use a lot of cash, they may use credit cards in an emergency, or not at all.

"You should talk about money the way you talk about anything else," says Stephens, author of Wealth Happens One Day At A Time: 365 Days to a Brighter Financial Future. "It's all part of the whole relationship conversation."

KNOW YOUR DREAMS AND GOALS

A huge issue in any romance is compromise. How will the vision of your life change now that you're in a committed relationship? This could be the fun part, experts say, forming new dreams and goals along with the newness of your relationship.

Consider consulting a financial planner to help you decide the best way to get the most out of your finances. Don't be afraid to think big. If both of you want to retire early, structure your financial lives to meet that goal.

The relationship probably will fail "if you both don't have the same goals and priorities ...," says Natasha Munson, an author from Atlanta. "The benefits are that you're both working toward something, and you're both focused on the same goals."

JOINT AND SEPARATE SAVINGS AND CHECKING

Stephens says that a couple should maintain separate savings and checking accounts for those purchases that are not part of the household budget. Getting a joint account to pay the bills, invest, and pay for housing is also a good idea, and banks and financial institutions will sometimes offer better deals for joint accounts.

Remember, though, there's a fine line between being a romantic couple and being roommates. You have to make a commitment to each other financially as well as emotionally for your relationship to work.

DEVELOP CREDIT IN EACH PARTNER'S NAME

It is vitally important that each person in a relationship maintains good--and separate--credit. This not only gives you more options if one of you gets into credit difficulties, it also lays a firm foundation if the relationship were to end, either through divorce or death. It's easier to settle financial matters in an open, honest relationship.

DETERMINE HOW YOU WILL MAKE LONGTERM/INVESTMENTS

Everyone knows that men and women invest differently. Men take more risks, women are more conservative. While women's investment clubs tend to outperform men's investment clubs, co-ed clubs do better than those divided by gender. This should tell you that a combination of risk-taking and conservatism probably works best. Pooling your savings can get you the best investment terms, because you can do more with more money. But retirement investing should be done separately.

It's also a good idea to maintain separate investments. But be honest with each other about what you're doing, especially if you're filing joint tax returns.

"If your friendship is strong, you're going to be honest with each other and let each other know the details of your financial history ...," says Munson, who wrote Life Lessons For My Black Girls. "Money is important. Once you have that spiritual friendship, you should feel free to talk about anything else."