Romance isn’t the only element keeping a relationship alive, one other such important factor in keeping things ticking over happily is financial equilibrium. You don’t have to be rich to be happy but knowing you’re on the same page financially is a big hep. Once you’ve decided to make any kind of commitment to someone (be it marriage, moving in together, buying a house, having a baby) you need to sit down and have a chat about finances. It may seem OMG SO GROWN UP but hey y’know what? Sometimes you’ve got to take the pig-tails out, put the Hello Kitty down and deal with the grown up matters for a while.
DISCUSSING FINANCES WITH YOUR PARTNER
Having an honest discussion about debts is a key step to starting a level playing field. If you’re coming into a new relationship or have been hiding the extent of debt you have whilst in your current relationship it’s wise to bite the bullet, grab all of your paperwork, print out a copy of your credit score and sit down for 30 minutes to outline your plans going forward. An open and honest discussion about debt can help you put into place an action plan, however a huge argument is likely to lead to further debts being hidden so make a deal to discuss for a maximum of 1 hour and only deal with the facts and practical solutions rather than anger and resentment which gets you nowhere.
Finance as a couple
A great discussion to have is about the way in which you will bank as couple. Will you keep individual accounts only? Is a joint account an option? How about a mixture of the two? And will you be jointly responsible for inpidual debts or just those incurred by you as a couple? How will your finances be linked? Are you comfortable supporting your other half if they should become unemployed or disabled?
Debt in your relationship
Going forward, it is a good idea to discuss which kinds of debts are and are not acceptable within your relationship. If you’re combining finances in any way, it makes sense to set out the boundaries early on. Do you both see credit cards as part of your financial future, would one of you prefer not to use them at all? Will you make equal repayments on individual debts or would you prefer to be responsible for your own? Is getting a car on HP acceptable or would you prefer to buy outright? It may seem silly but having a sort of mission statement about both acceptable levels of debt and for which circumstances, is a good idea in order to both get on the same page
Maternity Leave and Childcare
If you’re planning to have children (or even if you’re not, accidents happen) now or further down the line, it makes sense to be on the same page about maternity leave and child care as both can make a big impact on your finances. Do you both have the same vision regarding time spent away from work in the early years? Sure, things might work out differently but having a good idea of how you both envision things turning out in the ideal situation makes it an easier starting point to work from.
Mortgages, over-payments, re-mortgaging etc.
Is it your dream to own a home together? Do you already own somewhere? Many people (me included) have dreamt of a little home to call their own all their lives so it’s funny which dreaming habits we get set in and find it hard to shake. Are you both willing to stretch your budget to find the perfect house but eat baked beans for the rest of your life or would does one of you want somewhere more modest and the ability to socialise? Once you start making payments on your mortgage do you both think along the same lines when it comes to issues such as over-payments of the loan or re-mortgaging in order to do work. These are prudent conversations to have before making a financial commitment of hundreds of thousands of pounds (plus that pesky interest!)
Life insurance, Wills and Pensions
Have you discussed getting old or dying? They’re not the nicest of conversations to have but they are necessary conversations to have. The likelihood is one of you will die first (unless y’know you have some kind of pact), leaving the other to deal with the financial mess to mop up. Do you have an appropriate and updated will? Is life insurance something you need to look at and do you work place make payments to a spouse or partner for a limited period. Have you thought about old age? What are your provisions for pensions and do you have the same vision?
Where do you both stand when it comes to savings?
Have a discussion about the percentage of your income you are willing to save at this moment in time but also discuss how and when you each feel it would be appropriate to make use of the savings. One partner could be silently thinking the savings were for old age whilst another could be silently imagining a new kitchen in 18 months. Being forward and honest about these kinds of issues can save you from arguments, financial mistakes and years of worry in the long run. Singing from the same financial hymn sheet is half the battle.
Whatever you do, don’t avoid talking to your partner about money. Make a date to discuss these topics, get on the same page and clear the air.