Unmarried couples need to talk about money

A story published today in the Asbury Park Press suggests that unmarried couples can help to avoid breaking up over financial disputes if they would only talk about money and plan for the future.

Consider Sheryl Garrett who has not heard that old joke about marriage — "Two can live as cheaply as one, but only for half as long" — but she's seen the reality of that line played out often enough to know that it's not a laughing matter.

"Two can live less expensively if they share the household expenses, but it's not half," she says. "When you move in together, your costs aren't cut in half."

Garrett is the founder of the Garrett Planning Network of certified financial planners and author of "Money Without Matrimony: The Unmarried Couple's Guide to Financial Security" from Dearborn Trade Publishing. Her advice to couples living together — married or unmarried — is to avoid turning themselves into the latest version of that old punch line.

"Couples go out and buy a new pickup truck that they had no intention of buying because they think, "Instead of having his rent and so on now we have this extra $1,000 a month,' " Garrett explains. "They move in together and they start going, "Hey, we've got all this extra money.' But that extra money really needs to start going to some other things."

That includes things such as saving 10 percent of household income for retirement, as well as putting aside money for other goals, such as buying a house or starting a family.

How to set those goals? Garrett advises every couple to regularly talk about their finances — and it should be a talk, she cautions, not angry recriminations and excuses prompted by who spent how much on what.

"Look forward, not backward," she says. "I don't want people kicking themselves."

Setting a realistic budget that includes a monthly allowance for each person is one way to keep financial peace — as long as each person feels comfortable enough to spend instead of hoarding the money.

"It's giving ourselves permission and saying that it's OK and healthy, and that our spouse is doing the same thing," she said.

Another line in that budget should be dining out, she suggests, to avoid the problem of who picks up the tab.

"That's something you do when you're dating," Garrett said. "I want people to feel like it's a partnership in both a romantic and financial sense. Once you're married, that dining-out money should be in the household budget. Sometimes you go to McDonald's and sometimes you go to a fancy restaurant. Just don't go over that budget."

For couples who can't get around a financial impasse, Garrett suggests running their ideas past a financial planner who works on an hourly fee. She even created a financial plan for one couple in which the bride's mother gave them a gift certificate for two hours of financial planning.

"We hear that money is the leading cause of divorce," Garrett notes. "I'd rather see it as the lack of communication and collaboration regarding money is the leading cause of divorce."

The reality, says Garrett, is it probably is less important how much a couple has, or even how much each partner earns, than how much they're willing to share their hopes and feelings about what they want out of life.

"Most of the time there is enough money, and we're just not in alignment about what we want to accomplish."