Moving in with your loved one can seem like a dream at first. However, before you know it, realistic expectations can come crashing down, ruining the nest you built with your loved one. That’s why it’s so important to discuss financial planning as a couple before you make any big decisions. Here are the best tips to make financial planning as a couple easier than ever!
Keep Several Accounts
Some might not like the idea of keeping things while financial planning as a couple, but it works! “We’ve worked with couples from age 22 to 92,” Emily Sanders, managing director of United Capital Financial Advisers in Atlanta, says. “And some of the most happily married couples I’ve seen are ones that kept their money separate for their entire marriage. It takes away some of the power and control issues that tend to be associated with how we use our money.”
The best strategy? Have three accounts: one for you, one for the partner, and one joined. Use the shared account for joint expenses like rent, groceries, and saving up for long-term goals. Still, there are some things you should do together. Having each name on the house lease, for instance.
Whenever some spending occurs, make sure always to be fair when it comes to paying. Of course, this isn’t always possible, as each partner will likely not make the same salary. Still, count out how much each contributes to the relationship and try and make it as fair as possible. If the pay disparity is huge, at least make sure to discuss if the person making more feels comfortable taking on more of the financial burden. After all, no couple wants problems and arguments to build up over time.
Once a couple knows who’s paying for what and has some accounts open, they should start saving. As always, first, discuss the long-term saving goals of both partners. It could range from smaller things, like a vacation or sizeable personal purchase, to considerable expenses, like moving or retiring. Just make sure that not only do both partners want to save for the goal but that they financially can without getting into trouble.
Also, think about setting up a family emergency fund. In the event that either partner loses their job, such a fund could literally be a lifesaver. The fund should cover expenses for roughly three to six months.
Talk About It
Saving the best for last! The best piece of advice for a couple financial planning together? Always keep the lines of communication open! “It is easier to have one person do the tracking. But where it can be impractical is where one person maintains willful ignorance about how their habits are affecting the family finances,” says Kelley Long, member of the National CPA Financial Literacy Commission. Communication remains the key to almost all problems in a relationship, even when it comes to money. Couples should always talk it out with one another, even if the conversation is awkward to have.
Obviously, goals and dreams can change drastically when a couple starts financial planning together. Still, with a watchful eye and communication, everything will work out fine!