This Is the Biggest Financial Decision People Ever Make, According to Ramit Sethi

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Finance expert Ramit Sethi says your choice of partner has a major impact on your finances. Here’s why he’s right. 

There are many money decisions you will make during the course of your life, from what credit card to sign up for to how much to spend when you buy your house.

But, while decisions about investing or your mortgage loan payment can have an impact on your net worth, there’s one decision that finance expert Ramit Sethi says is most important of all.

Sethi says this decision makes the biggest financial impact

According to Sethi, there’s one choice that will make the biggest impact of all when it comes to your financial stability. And that choice doesn’t relate to a purchase or investment choice. Instead, it’s a choice you make in your personal life.

“The biggest financial decision you will ever make is the partner you choose,” Sethi explained on Twitter.

Sethi said there’s nothing wrong with thinking about how you and your partner manage money, and how you are similar and different in your financial philosophies — and this is something that should be discussed.

Is Sethi right?

Sethi is absolutely correct that your choice of partner is going to make a bigger impact on your financial life than almost any other choice you make. And that’s true even if you try to keep your finances separate by maintaining different bank accounts.

The reality is, when you combine your life with someone else’s, their money habits are going to affect your ability to build a shared life together in dozens of ways, big and small. For example:

If your partner has poor credit, you will have a hard time borrowing to buy a house or vehicle.If your partner has a ton of debt, some of your combined household income is going to have to go to paying that back.If your partner has a spending problem, there’s going to be less money available to do things together as a couple, including big purchases or even smaller expenses like date nights. If your partner doesn’t want to invest and save, that’s going to affect your ability to share a joint retirement. If your partner is a big spender, they may encourage you to overspend — or feel resentful when you try not to do so.

These are just a few of many, many examples of the ways in which your partner’s financial habits can affect yours. The reality is, it’s impossible to have a shared life without sharing at least some aspect of your finances. After all, even if you have separate bank accounts, if you save diligently to retire at 55 and your spouse doesn’t have a penny in the bank, you aren’t going to easily be able to travel together as retirees.

Small money problems can lead to big fights

If you’re not on the same page about big financial issues, you’re also setting yourself up for years of money fights and stress. And this can affect your marriage as a whole. In fact, a study conducted by Ramsey Solutions found money is the second most common reason for divorce, behind infidelity.

You don’t want to set yourself up to struggle with your partner for decades. If you can, talk about money early in the relationship to make sure you’re compatible. This could save you a lot of heartache down the line.

Of course, if you’re already married, it may be too late for that — but if you find yourself fighting about money often, it’s worth taking the time to really sit down and try to get on the same page about your financial philosophy. Like it or not, you’re in it together and there’s no way your partner’s personal finances won’t impact your own.

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