This February, consider a new approach to intimacy with your loved one. As a female financial advisor focused on female clients, I've become very clear-eyed about how important the role of money -- and the ritual of talking about money -- can be in relationships.
While divorce rates are declining, money's influence on divorce is growing ever larger. Research suggests that as our level of consumer debt has risen, so has our squabbling about money. Some research cites money fights as the top cause of divorce.
So this Valentine's month, keep Cupid's aim true and invest in your relationship by exploring these five financial facts; then pop the champagne!
- Your credit score. This three-digit number won't tell you everything about your honey -- life's upheavals can force a credit misstep from even the most financially responsible people -- but it's a logical starting place. '700-plus credit' may not sound sexy, but it does indicate your sweetie places a premium on making timely payments and low overall debt ceilings. (The average FICO score for approved mortgage borrowers was 734 in August 2013.)
- Demands on your cash (present and future). While it takes just two to tango, the party can grow larger pretty darn fast! From children to dependent elderly parents to charitable giving and clothing/entertainment budgets, expect many demands on your income, and his. Illustrating your respective priorities can help stave off future disagreements and disappointments. (Oh, and those kids? A USDA study projects they'll cost just north of300,000, each, adjusted for inflation.)
- Your income. Yes, some folks get married without ever knowing how much their spouse earns. It's not to say that you can't keep your money separate -- many happy couples do -- but if you are going to live together, a full disclosure of earnings, retirement accounts and other assets is in order. This clearly isn't a first (or a fifth) date topic. However, if you think you've found 'the one,' this is data you absolutely need before committing to a lifetime together. (Take bonus points for calculating the earning potential in your chosen fields.)
- Your financial personality. Are you a saver or a spender? Turns out financial opposites often attract and, sadly, often experience unhappy marriages. But it's not a fait accompli. When you're willing to talk about -- and perhaps compromise -- your spending goals, you can balance your respective financial needs. Be aware, though, that men and women can see basic facts differently. One wealth management study found that 73 percent of women said they were jointly responsible for finances with their partners. Men? Only 45 percent said money was an equal concern.
- The age at which you plan to retire. If you have no idea how long you expect to work, it's time to grapple with this question. It will have tremendous impact on your savings rates, major purchases, where you send your children to school and decide to live. If you're determined to stop working early, you're probably willing to bypass most extravagances along the way. But how will that sit with your beloved?<
You may believe these topics will ruin the bliss of romance, but I think you'll be pleasantly surprised. Money talks may not be romantic, but honesty and agreement build trust -- and THAT preserves Cupid's promise.
This post originally appeared at MoneyZen.com.
1. Shop around
The Internet has turned me into a hardcore comparison shopper, and apartments are no different. There are dozens of apartment rental sites listing dozens of properties in my hometown. It pays to check out several of these sites when you're looking for a new pad. I mentioned a few sites you should use (and a few you shouldn't) in <a href="http://www.moneytalksnews.com/2011/11/23/the-best-and-worst-apartment-rental-sites/" target="_hplink">The Best (and Worst) Apartment Rental Sites</a>. But don't stop your search with your computer. I found my last apartment through a "For Rent" sign in the window. The place was 0 cheaper than anything else I found, and I never saw an online ad for it.
2. Move a few miles away
Location is everything in real estate. If you live in the most popular area, you're going to pay the highest rent. But if you move a couple of miles (or sometimes even a few blocks) away, you can get a serious discount. For example, renters in my city (New Orleans) pay about ,250 a month to live in studio apartments on a trendy street. I live four blocks away and pay 0 a month for a one-bedroom. I don't get bragging rights, but I'm still within walking distance - and I'm saving 0 a month.
I start looking for a new apartment a month or two before I need one. If I find a place I like, I keep an eye on it. More often than not, private landlords lower their asking price if they don't find a tenant within a week or two.
4. Sign a longer lease
You're locked into your rent as long as you're under a lease. If you sign a longer lease, you'll be locked into the lower rate if the cost of rent goes up. Two years ago, my friend signed a three-year lease on his apartment. Last year, the landlord raised the rent 0 across the complex. By locking himself into a set rate for three years, my friend has saved ,400 so far.
I am not a haggler, but when it comes to my single biggest expense, I negotiate. It doesn't always work, but if you do your homework - and give the landlord a good reason - he may be willing to lower the rent. (Learn how to haggle here: <a href="http://www.moneytalksnews.com/2012/04/18/the-simplest-way-to-save-on-everything/" target="_hplink">The Simplest Way to Save on Everything</a>.) Start by researching the average rent in the area. If the landlord is charging more than everyone else, print out a few ads to prove it. Then convince the landlord that he should want you as a tenant. I ask for referral letters from my previous landlords, make copies of my bank statements, and pull my credit report. By showing the landlord that I'm a good tenant - and I know that he's over-charging - I can negotiate a better rate.
6. Look for free perks
I always compare the cost of the rent with the amenities or the utilities that are sometimes included. For example, I recently looked at two duplexes. One went for 5 a month but didn't include any utilities or a parking space. The other rented for 0 a month but included water, trash, Wi-Fi, and an off-street space. Obviously, 5 is cheaper than 0. But when you consider the average water and trash bill in my area is a month, and the average Internet cost is a month, I'd actually save a month by going with the more expensive rental.
7. Trade work for rent
If you have a skill a landlord needs, you might get a discount on your rent. My landlord rents a unit to a tenant who also serves as our maintenance guy. In exchange for doing the odd job, he gets 0 a month off his rent. But you don't have to be handy with tools. Landlords occasionally need people to maintain their website, design rental ads, or manage their properties. If you've got free time, offer to trade your services for a discount.
8. Turn a profit on your rental
A few of my neighbors have made a quick profit by renting out their place for the night to tourists. Granted, there are some serious downsides to the idea - like your place possibly getting trashed - but my neighbor made 0 in two nights. If you live in a popular city, you could stand to make a profit a few times a year. Just make sure you get your landlord's approval - and ask for a security deposit before you open the door to strangers. If you're a renter, also check out <a href="http://www.moneytalksnews.com/2011/07/04/5-myths-renters-insurance/" target="_hplink">6 Myths about Renter's Insurance - and How to Save</a> and <a href="http://www.moneytalksnews.com/2011/12/29/9-ways-to-remodel-your-rental-without-breaking-your-lease/" target="_hplink">9 Ways to Remodel Your Rental Without Breaking Your Lease</a>.
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