With Valentine’s Day just around the corner, maybe it’s a good time to look towards your financial future as a couple? Many couples don’t give their finances enough thought before they live together or get married, often resulting in complications further down the track. So, if you have found the love of your life, here are a few tips to keep your finances running smoothly as a couple.

Financial common sense

Everyone deals with money differently – some people are avid savers, others spend as if there is no tomorrow and others are in between. It definitely pays to discuss your spending and saving habits before you move in together, otherwise your finances could become a problem, sooner than you think! For example, if one of you has mounting debts due to poor spending habits and the other has a sizable saving account and abhors debt, you can imagine that something will need to change, pretty soon!

Not all debt is ‘bad’ debt, but you both need to be on the same page about ‘bad’ debt and ‘good’ debt, because regardless of the definition, too much of any type of debt can be stressful to a couple. Examples of ‘bad’ debt, where the ‘asset’ doesn’t appreciate over time are car loans, boat loans and credit card debts.  Even though a mortgage is generally considered as ‘good’ debt due to capital gains, combined with too many other debts, it all puts pressure on a relationship.

As you can appreciate, trying to pay down a large mortgage and two car loans can just about cripple a couple financially, increasing their stress levels and putting undue pressure on their relationship. If one person then looses their job, the debts can become overwhelming and the couple can be in real trouble

Discuss your debt behaviour

Your current finances and how each of you deals with money (your spending vs saving behaviour) needs to be addressed sooner rather than later in your relationship. If you don’t come to some sort of agreement about your finances, you could end up with one partner spending heavily and increasing your debt, while the other struggles to pay the bills every month.

The best approach is to agree on a savings plan for both of you and with a specific goal in mind. This might be a deposit on a house, a new car, boat, holiday, paying down credit cards or an investment plan. Your goals will partly depend on your ages and whether or not you have children, but planning for your future is important for your financial security, regardless of your age and family circumstances.

Discuss your incomes and create a financial plan

You both need to be transparent about your incomes and decide on a financial plan as a couple. You might decide to live off one income and save the other or allocate certain bills to be paid from each income, as well as having separate savings accounts. Whatever works for you as a couple is right for your relationship, but you both need to understand each other’s ‘money behaviour’ and agree on a financial plan together as a couple.

When you both agree on a financial plan, you can look forward to your future together, safe in the knowledge that you are both working towards the same goals.

For help organising your finances as a couple, call Amanda McCall on 07 3356 6926 or shoot us an email.

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