According to the Australian Psychological Society, money worries are one of the biggest causes of relationship break-ups and stress, so it pays to go into love and money matters with your eyes open.
Inevitably you will find yourself sharing expenses during your relationship. With a bit of forward planning, you can make sure you and your partner are on the same page when it comes to managing your finances.
Sharing financial goals
It is important to ensure that you and your partner have a clear idea about where you’re headed financially, and are comfortable with each other’s approach to saving and spending.
Combining finances means combining financial goals. While it may feel uncomfortable to have a conversation about money, it is important to discuss how these items will be factored into your new shared financial arrangement (because there is nothing romantic about a dinner for two when you spend the end of the night figuring out whose turn it is to pay!).
Finding ways to communicate about your finances with your loved one can be a real challenge, but it’s important to remember a couple of key factors.
Focus on the issue at hand, not who’s doing what wrong
Try to remove each other from the conversation and focus on the facts. During your conversations, keep in mind that everyone has a different attitude to money. Arguments can arise when your spending habits are different from your partners. For example, some people are comfortable with personal debt (e.g. credit cards, overdrafts, personal loans), whereas others will prefer to pay for most things in cash. If it bothers you that your partner spends too much money on unnecessary items, talk to them about how you’re concerned you’re not saving enough for your financial goals rather than shifting the blame to one person.
Asking for their opinion encourages discussion
Having a conversation about financial goals only works when you take a collaborative approach and listen to each other. Remember: it takes two to tango!
Set combined financial goals together
Have a casual sit down with your partner and set some goals together. This will simply determine what is important to each of you.
Work out your budget
Budgeting is definitely not the most romantic thing to do; however, it can be exciting if you’re saving up for something together, such as a pet or an overseas holiday. Budgeting allows you to know how much money you can allocate to savings and will give you a rough timeframe on when you’ll be able to achieve your joint financial goals. Setting a budget will keep track of your expenses as a couple, and is a great way to ensure both parties are happy with how the money is being spent.
Just remember that every relationship is unique, but if you are both committed to communicating openly and frequently about your finances you can often avoid major arguments.
For most couples, moving in together is a good time to combine finances. Considering that the bills will become a shared expense, it is a natural progression to share money.
If you (or your partner) have any hesitations about combining finances, you could start off with an arrangement specifically for household bills. A joint account, in which both people contribute a set amount per week, can be a great way to try your new shared financial situation.
Personal spending and savings goals also need to be considered when planning long-term goals. Relationship decisions that can incur large expenses, such as overseas trips, cars, or house deposits will need financial planning in advance and should be discussed if they haven’t been already.
When you make the decision to combine finances, things such as opening shared bank accounts, applying for joint loans and sharing assets and bills need to be considered from a legal standpoint.
It’s essential to do your research and find out the financial implications if your relationship were to end sometime down the track. Discuss your situation with a financial planner or a solicitor if you think you need more information.
Combining finances can be a positive and exciting step in any relationship. With open communication and planning, you and your partner will definitely be reaching #couplegoals.
To learn more, contact us today on 1300 362 216 or make an enquiry online here.
This blog post is for general information purposes only and is not intended as financial or professional advice. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product or other professional advice. You should seek your own independent financial, legal and taxation advice before making any decision about any action in relation to the material in this article. Railways Credit Union Limited trading as MOVE Bank ABN 91 087 651 090. AFSL/ Australian Credit License number 234 536 | ABN 91 087 651