8 ways to get your financial relationship solid before saying ‘I Do’.
A partnership is the most significant emotional and financial decision you can make. And it’s not the amount of money that couples have that can lead to financial success. Great communication, shared goals and talking to financial advisers to plan how to reach them are the ingredients that will help you both enjoy financial security. Plus money is one of the central causes of relationship strife, so it’s wise to sort out financial expectations upfront. If you haven’t had a financial conversation with your partner, try starting with these basic questions.
1. How much money is there?
It’s not a first date topic, but if you’re in it for the long haul finding out each other’s net worth is only fair. Include:
- Savings and investment accounts
- Super accounts
- Your credit rating (you can check your credit rating for free at mycreditfile.com.au)
2. Are there financial problems?
If you find problems on either side (a habit of paying bills late, a poor credit rating, credit card debt) you’ll need to find a solution. Who’s responsible for doing what? What do you need to change to fix the situation? How long will it take? And perhaps the most important question of all: does the problem stem from a money behaviour that’s not likely to change? It’s best to know this before you commit.
3. Where does (and will) the money come from?
You know what you both do for a living now, but what’s the plan in 5, 10, or 20 years? Will one partner need to get further training or go back to uni? Will you need to move to a different location? Do you have any dreams that involve some financial sacrifice?
4. What will happen if you plan to have children together?
How will you balance work and raising children? If one partner already has children, how does it affect your finances? You’ll need to discuss your values about being a working parent versus staying at home, and creative ways to make your preferences happen (freelance work, a small business, part-time employment, childcare). It’s also critical to be upfront about any maintenance payments and how you spend on children from another relationship.
5. Where is the money kept and how is it invested?
Take a look at investment habits – these will determine your risk profiles. If one partner invests heavily in shares and the other in Super, you may need to discuss your risk tolerance and create a plan you both can live with.
6. Where does the money go?
Take a look at your budgets. If you don’t keep one, now’s a great time to get started. Keeping a budget will show your spending habits and raise important questions. How much does your partner spend on shopping, dining out, fitness, vehicles and more – and can you live with these decisions?
7. Should we see a financial adviser?
Getting good financial advice is worthwhile if you are about the get hitched. Ask in your local branch or click here to find a local financial planner.
8. How do we organise our accounts?
Whether you have joint accounts or not, split the bills or not, you need to work out the details of your day-to-day transactions and savings. It’s a personal choice and there may be money saved by structuring things in certain ways. So again, ask in branch or speak to a financial adviser.
How you’ll manage money is a discussion that needs to be ongoing. Uncovering your basic values and financial situation now is only the beginning to a lifetime of sharing everything you are and everything you have.
If you want to have a free session with a financial adviser contact us here.