When new couples get married and start living together, one of the first things they need to consider is how they will manage their finances.
For singles, your financial situation is relatively straightforward – but when there are two of you with different financial backgrounds and different approaches to managing a budget, there can be problems. However, most couples will ultimately want similar things, such as buying a home together, travel and/or building a nest egg so they can have a family.
Here are some tips on better managing your money as a couple.
A lot of the time you can classify people as spenders or savers. Savers often look down on spenders, while spenders think that savers need to enjoy their money. Regardless of what camp you’re in, it’s vital that you understand where your partner is coming from. Your goal should be to find common ground so that you can work toward your goals together.
If you’re a couple it’s important that you let your partner know how much you’re making so you have a clear understanding of each other’s financial situation. That way, when you work on a budget you can determine the amount coming in, before deciding how much you should be spending. Many couples don’t share their financial information with one another and this can lead to conflict down the track.
As a couple, you will end up having things like joint accounts, mortgages and other forms of debt. It’s vital that you understand what you are getting into and know the ramifications of what will happen should you separate. The best thing to do is to read all financial documents carefully and if in doubt consult an expert. Don’t ever sign anything you’re not comfortable with.
Being a couple is about having a shared vision of a life together and financial goals are a big part of that. Whether you want to own a home, travel each year or start a family, you will need to put down a financial plan to help you achieve what you want out of life. By sitting down and working through it together you are more likely to stick to your plans and reach your goals. If you haven’t got a financial goal, then you are unlikely to be able to achieve it.
Whatever your goals, it all starts with budgeting. When you first make the decision to get married and live together, we suggest you sit down and go over your finances. Work out your income and fixed expenses. Then, determine how much you want to be saving for things, like a house deposit. Finally, you can allocate some money to discretionary expenses and things like holidays. Work backwards to achieve your goals.
If you would like to chat to us about goal setting or budgeting, or have any other finance and/or property question, the best place to start is to contact us for advice. We are only an email or phone call away, on 02 8004 2222 or book an appointment.
Although we are located in Crows Nest, we service clients from St Leonards, Artarmon, Wollstonecraft, Cammeray, Northbridge, Naremburn, Neutral Bay, Greenwich, North Sydney, Waverton to Willoughby and all areas of Greater Sydney.
PS This article is prepared based on general information. It does not take into account individual financial or property objectives or needs and is not financial product or investment advice.