It took some time and it hasn’t been all roses, but you did find that special someone. You're settled in living together and reaping the rewards of a long-term relationship.
Unfortunately, no one is talking about the household finances. A storm is brewing and neither partner sees the thunder clouds lingering over the horizon.
Jen and Lisa have been together for about five years. Jen makes $60,000, or two-thirds of the household income, while Lisa brings in $30,000, or one-third. They split expenses equally.
After paying taxes and household expenses, Lisa has nothing left over. She's spending her entire paycheck and not saving a dime. She's also secretly running up a credit card balance just to make ends meet.
Jen, on the other hand, has plenty leftover to save for retirement, trips to see family and spend on herself.
We all can see the elephant in the room that's not being discussed. And the relationship, which is wonderful in every other aspect, is heading towards a serious crisis that could potentially end it.
The money issue is one of the most common causes for breakups.
Most gay and lesbian couples tend to split expenses equally. Each partner contributes half to pay the household expenses like rent or mortgage, groceries and utilities. This is different from many opposite-sex couples who tend to pool their incomes and then pay the bills.
Splitting expenses 50/50 works out great if both partners earn about the same amount. But it can be extremely stressful if one partner makes more than the other and they each try to pay half the household expenses.
The good news is Jen and Lisa have several options to address the different incomes and be happy with their finances, both as a couple and individually.
One option is to lower their household spending level so that Lisa can save money on her own.
Another option is to continue with the same spending and 50/50 split. Jen, as the higher earner, can save money in a joint account for both of them. Just be aware of the annual $13,000 federal gift tax limit if you decide this route.
Another option is to split the expenses based on incomes. In this scenario, Jen pays two-thirds of the household expenses and Lisa pays one-third. This option allows the couple to maintain their current standard of living and both have money for saving and spending on themselves.
Don't forget to keep individual goals in mind when deciding on a household budget. You are a couple, but still individuals. Let's say Lisa wants to return to college in a few years. Although this is Lisa’s individual goal, it should be taken into account when talking about the couple’s finances.
Will they get by on one income? Or should Lisa work part time? Should they move into a cheaper place? How is tuition going to be paid: loans, income, savings, or all the above?
The two important things that every couple should do is to let their individual dreams and goals be known to each other and then, as a couple, come up with a financial plan that works for both of them.
There is no template for gay and lesbian couples to handle their finances. The only right way is what works for both partners. That takes honest communication and good old-fashioned compromise. But since you're in a relationship, you already know that.
Steve Doster, CFP®, is a Certified Financial Planner offering fee-only, hourly financial advice for do-it-yourself investors. Visit his website or his Facebook page to see his favorite personal finance article of the week.