Managing Your Finances As A Couple
One of the secrets to a happy and strong relationship, in the long term, is financial stability.
If you know what you want from your money, and you have a plan for making it happen, then you stand a much better chance of enjoying a happy life together. Through planning and clear communication, you can vastly improve your prospects.
Set Clear Financial Goals Together
The first step should be determining what it is that you want. Start with long-term goals, and then set the milestones you’ll need to reach along the way. So, if you’re thinking of overpaying on your mortgage, you might set a yearly target, and then a monthly one. Even if your goals aren’t quite aligned, it’s better to have the conversation. That way, you can reach an acceptable compromise, and pull in the same direction.
Create a Joint Budget
A joint budget can be a useful tool in shaping your financial future. Make time to sit down and talk your way through it. Factor in your income as a couple, and your spending. You might be able to simplify things like joint expenses by setting up a joint account, and having a single lump sum each month for your outgoings. This will lower the temptation to overspend.
Be Transparent About Debts and Credit
If you conceal savings and debts from your spouse, then you might suffer from trust problems, particularly after the deception is discovered. When it comes to relationships, honesty is the best policy. Be up front about everything from your credit cards, to personal loans, to car finance agreements. It might be that you can pay these debts off more quickly, or lower the overall interest you pay, by involving your significant other.
Build a Shared Emergency Fund
An emergency fund is a simple, powerful means of dealing with unexpected problems. If you have enough cash sitting in your current account to deal with a sudden job loss, or a boiler breaking down, or an unexpected medical problem, then you might enjoy far greater peace of mind.
There’s no set size for an emergency fund. But, ideally, it should allow you to take several months off work, if the situation demands it. Once you’ve saved a healthy pile of money, you won’t need to go into debt to handle financial emergencies. The lower your day-to-day spending, generally speaking, the less cash you’ll need.
