Y'all need to talk to each other...
How do you want to live as you get older?
When you start dating someone seriously, this is a topic you need to discuss with each other. It all falls under a discussion you should have about you both manage money (learn about that in the Relationship lesson).
Here's how bad it can get...
A couple of close friends of mine (we'll call them Fred and Wilma) agreed that they would spend their money as fast as they made it. They didn’t save a dime and didn’t think anything would ever happen to the business they owned. Well, until they were in their early 70’s…and Fred's son (Sam, from a previous marriage) came along and talked Fred into handing the business over to him. They signed a contract and both agreed that Sam would keep Fred on as a consultant at a salary of $10,000 a month. Sweet.
Until Fred didn’t get his first month’s pay.
Turns out that Sam put some kind of loophole in the contract that allowed him to fire his father.
Now Fred & Wilma have no company, no income and no retirement savings at the age of 73.
They called Tom and I for help with their bills. All our extra income was tucked away into our retirement accounts and there was no way we were going to touch that to bail them out, knowing we’d never get it back. And they wouldn’t be able to help us if we ever needed it.
They lost everything, house, cars, motorhome, most of their household goods, everything had to go. And Fred ended up going back to school to get his real estate license and, luckily, they were able to rent a house from a friend of theirs.
Well, at least Fred and Wilma had agreed on how they would manage money.
So, think about it...
How do you want to live as you get older?
If both of you are spenders like Fred and Wilma, well, at least you agree. But do you really want to risk being homeless when you get old?
Or if one of you is a spender and one is a saver, this could work. But you must agree on how much goes to savings and not fight about it. Remember, I mentioned that money is in the top three reasons for divorce? This is one of those possible hot buttons.
If both of you are savers, this may work well too. As long as you can agree on how much to save, and when spending a bit for fun stuff is ok, then you’ll be fine.
Regardless on what you decide, you should do some basic math and figure out how much you should save for retirement. That’s explained in my answer to Mauricio's question posted in the Employment lesson.
Sincerely,
Jan