If you have plans on getting married someday, or perhaps you simply want to live together under one roof, one of the things you have to consider is knowing how to handle your relationship and money. It can get complicated, challenging, and unromantic, you somehow, need to be on the same page when it comes to handling finances.
Living with your parents or with a roommate, you have a responsibility to take care of some expenses. It is normal to contribute your share every month. Unfortunately, personal finances are the most often overlooked topics by couples. Talking about how you are going to allocate your money is still considered taboo.
Talk About Your Personal Finances Before Getting Married
Talking about your finances with your significant other does not have to be unpleasant. It is better to tackle these things before saying “I do”. Some questions you might want to know are as follow:
- Do you have any existing loans?
- How stable is your job right now?
- Should we think about a mortgage or rent an apartment for the rest of our lives?
- Do you like to handle the budgeting?
- What are your future career plans?
We can always say that we’ll support our partners no matter what, but to what extent and for how long? We are humans who get tired and frustrated.
What if you have a growing family and huge bill to pay and all of a sudden, your partner decides to quit his very stable job and use your emergency fund in starting a business? There are risks along the way. It is good to know of their future plans to be better prepared.
Keeping an open communication is the way.
How to Handle Expenses in Marriage
Spending on dates is different from paying expenses when you’re married.
When you are married, you have to think as a team as you encounter the expenses coming your way. Expenses in marriage often come in huge amounts (mortgage, groceries, utilities, retirement fund, insurance, etc).
Ask your partner if they are comfortable in handling the budget? Will it be better to have a joint account? How much money can you contribute? What can you cover? What can’t you cover?
There is no right or wrong way. Couples practice different ways depending on their culture and own acceptance. For instance, it is more common for wives in the Philippines or in China to handle the budgeting, while couples in western countries handle their finances more independently.
Couples Must Set Financial Goals at Least Once a Year
One of the best tips I got is for couples to sit down once a year, and along with discussing personal goals is to also set their financial goals, whether it is to save more money or aim for a higher income. Knowing where you and your partner want to go can help your relationship row towards the same direction.
Create a System to Get Bills Paid
Keeping a joint account is a good idea to get the necessities paid. Avoid procrastination, open the bills when they come, and allocate the time before the deadline to pay them. The joint account can automate payments nowadays, making it easier for couples.
You can also automate the transfer from your personal account to your joint account so you don’t have to worry about forgetting the bill.
In Handling Relationship and Money, Always Set a Budget for Insurance
If you are planning to have children, you may want to set aside budget for insurance. Rick Kahler, founder of Kahler Financial Group in his interview with Forbes said that when the first child comes along it’s imperative that there is enough insurance to raise each child to financial self-sufficiency. If someone will suffer financially if you die, then getting an insurance is recommended.
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Nevertheless, in handling your relationship and money, it is better not to count every penny each person brings into the household. It is crucial never to pull rank or your relationship may suffer. The low-earner or the non-earner must feel valued so let them participate in the financial decision-making.