Money is one of the top reasons why couples fight, which is why having a financial conversation with your partner prior to moving in together is a good idea. The conversation is important for several reasons. It is important to know who is responsible for which expenses, it is good to discuss shared financial goals, even if it is still the early days and of course, you don’t want yourself or your partner causing financial pressure on the other person in the relationship. We spoke to Gerry Incollingo, the MD of LCI Partners, about the top money conversations you need to have with your partner. It is a firm that specializes in accounting advisory, lending, wealth, property, insurance, and legal.
3 Money Conversations You Need to Have with Your Partner
1) Who is paying for what?
Whether you are only just moving in together, or you already have a bit of stress about money in the relationship, deciding who is responsible for paying which bills is an important conversation to have. For example, some couples may divide up their expenses and pay 50/50. Others may take responsibility for certain bills and leave other bills to their partner. There is also the question of whether one person out-earns the other by a significant amount, and when that is the case, some couples choose to divvy up expenses according to what they can afford based on their mismatched income.
It is important to have this conversation sooner than later as it can cause stress for a lot of relationships. Unless you have a joint bank account, generally having one person in charge of all of the bills can cause issues, especially if the other is not putting their share of the bills into the account on time and are not pulling their weight in regards to responsibility.
If you choose to have a joint account, unless you have been together for a long time and trust your partner with their spending, I would have an account that you put expenses into and keep the rest of your money separate. If you already have assets together, however, such as a mortgage, you may choose to put some savings into the offset to reduce your interest repayments, which again will benefit both of you.
2) What are your savings goals?
Some couples will want to build their wealth up together while others will want to keep things separate. It is good to have this conversation early to know what you are working towards and whether or not one or both of you want to work towards goals together or separately For example, if one person wants to purchase a house, and they are saving for it, while the other is spending their money on other things when it comes to crunch time, you don’t want your partner to feel excluded because they were not apart of that conversation early on.
Similarly, if you want to save for something like a holiday or new items for the home, you want to be on the same page when it comes to saving for it, as you don’t want one person to be reducing their spending and hitting the goal, while the other isn’t even trying and later causes frustration for the one who has saved and is keen to travel.
3) Be Honest
If your relationship is serious, it is a good idea, to be honest about your financial situation. You don’t want to be encouraged to spend outside of your means if you can’t afford it. It is also good to have an honest conversation about debt early on and create a plan around it as you don’t want your partner to later get a surprise if you are not ready to save for a house or an around the world holiday when that is what they want to do. Having the conversation early saves disappointment and expectation.