Money and Relationships
Written on the 25 November 2017 by Arrow
Leaving the single life behind to become a twosome is an exciting and romantic time. The last thing on your mind is how to manage your joint finances. Yet relationship success and financial success as a couple have a lot in common. Both rely on good communication and negotiation.
Money may not be romantic, but it's important to get into the habit of talking openly about joint finances from the start. It will give you both insight into each other's personal and financial goals and a better chance of marrying them into a joint financial plan.
While both partners need to be involved in financial decision-making, the way you divide financial tasks and responsibilities is a personal matter. One of you may be more confident or interested in budgeting and investing while the other prefers to concentrate on other household tasks. But even if one person assumes more of the day-to-day financial management, both partners need to understand what money is coming in and how it is spent.
Whether you are already living together or planning to, here are some steps to get the conversation started.
This might include whether you want children and where you want to send them to school. If there are children from a previous marriage, who will provide for them? While children bring great joy into a relationship, they are a major financial commitment which can cause tensions if not planned and budgeted for early on.
Now that you are responsible for a partner and perhaps children, you need to protect them. How would you cope with the mortgage or medical bills if one of you were to become ill or die? It's not a happy thought, but having appropriate life insurances, health cover and home insurance can give you peace of mind and ease the financial pressure in difficult times.
If one partner is expecting an inheritance, or brings more financial assets to the relationship, discuss how it will be used and whether it will be kept in one name or shared. Pre-nuptial agreements don't sound very romantic but they do make sense, particularly where one partner has considerably more assets before marriage. Such agreements have formal legal standing in Australia but it is important that both partners seek legal advice as they can be set aside by the courts if found to be unjust or unreasonable.
Life is an adventure best shared. One way to ensure the journey is a happy one is to share your personal and financial goals early in your relationship and make open and honest communication a lifelong habit.