Whether in a relationship or getting married, things are going to get serious, and it will be time to share your finances with the significant other! The responsibility increases, and handling finances in a relationship is another thing you have to master. This means you would need to be on the same page with finances for each other or anything related to money.
If not, you will always be fighting over money matters. Your relationship is a sincere commitment to 50/50. There comes the point where you would have to discuss money and talk seriously about bank accounts, savings, investments, etc. or even retirement plans. And the most crucial discussion varies between – should we divide our finances 50-50?
Discussing finances can be complicated, and it can get messy too. Sure, you make enough money, you may be on debts, you may have EMIs, loans to transparent, etc. They are things you just need to keep up with and require the most understanding from each of the partners. If you are beginning to join lives, combining assets may be the most complicated part of your discussion. As newlyweds or partners who have moved in together, it could be difficult at first to sort out finances, but to avoid any mistakes and significant conflicts that can arise, consider some financial management tips.
Another essential factor to consider is to have an honest, open conversation about your expenses and what type of spender you are, or are you more of a saver. Understanding each other’s financial habits and income will help in creating a plan that can work for both of you. This also contributes to fixing finances on your shared goals, and avoid contempt fighting about money.
Couples who are new to the concept of merging your finances need not worry at all. You can choose from many methods that suit both the partners. For example, some couples make a joint bank account, plan for retirement fund and credit card, etc.
Moreover, you can also choose to divide the monthly bills, combine some of them, and see what works the best. To do so, making a budget and planning your finances are very crucial, and you would need to think of the following ground rules to manage money justly and wisely. This will keep your relationship intact, happy, and healthy.
- Understand each other’s money personality
With splitting finances, the two of you must decide who is more of a saver and spender. Perpahs, having an honest conversation about your money and goals should be a great way to start. You may also consider a money personality quiz if that helps. This will help both of you to understand the financial compatibility and will make it easier to deal with your partner’s financial personality.
Another critical point is that it is always good to maintain a healthy financial account and understand each other’s viewpoints and behavior towards money. To avoid unpleasant, unforeseen situations, surprises along the way, it is best to make some compromises once you know what to expect. Being aware of your partner’s strengths and weaknesses when it comes to money and also finds you different ways to complement each other.
- Divide the share of expenses and decide who pays what
As soon as you have decided when to move in together, it will be time to talk and discuss to make a plan on how both of you will divide the expenses as a couple. To have a fair discussion, you must agree on a process that works for you both when it comes to handling finances. You may also choose to combine your finances thoroughly or keep entirely separate and even save up some for your expenses.
It is very much recommended that couples keep aside some money aside for their purchases, which would be keeping aside a portion of their income to spend on whatever they like without having to consult their partners and argue over purchases. Another advantage of having your own money for personal expenses is that you need not fall back on your partner if you happen to break up in the future and parting ways.
- Consider having money dates.
One must indeed have an open conversation about finances to understand each other’s advice. This is considered as one of the top money management tips for couples when it comes to handling budgets. To discuss things over finances, you may consider taking your partner on a date at least every three months not just to spend some time together but also to discuss about your financial goals and progress.
This move can help you understand the cash flow of your partner and is the least romantic thing to do, to avoid arguments over money. So, if you are already planning to have a discussion, go ahead to schedule your money dates. With time, discussing money matters with each other will become more natural and comfortable.
- Try to save for emergencies, dream goals and retirement.
Another essential way to keep it simple with your finances is to save as much as you both can from each of your incomes. You can also consider opening an account each for emergencies, retirement and dream, long-term funds. This helps in avoiding sudden, unforeseen situations that may occur and save you from spending all your savings. To ensure long-term financial stability, it’s advised to at least save for six months.
While you are young and working, agreeing to put some money aside and towards investment channels such as mutual funds or stocks can be a good idea too. This can help you save and spend on retirement together. The dream fund that you both save will help you achieve your dreams together, including buying a house, traveling to a destination, and other aligned goals.
- Discuss and decide if you are financially ready to have children
When you are married and wanting to start a family, there is always a lot more than just excitement to think about. Raising children can be emotionally fulfilling, but it can also be heavy on your finances if you are not ready. To raise a child is also to have to prepare for their living expenses, education, medical, and other social needs. If these are not managed well, it can take a toll on your relationship and create a lot of stress around money.
So, before you have children, it is recommended that to discuss and decide with your partner about havings kids and what should be the right time—understanding whether you can afford it right now or later will help you plan budgets accordingly. And when you have decided to have one, it will be time to make some necessary financial preparations for the child in the future.
Aahna Gandhi is an enthusiast traveller, writer and a PR Professional. She likes sharing memorable moments from her travels and inspire others to live a life full of wonder. Known for her content, she has worked for travel, technology, lifestyle, health sectors as well as finance.
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