Relationships and money. Sometimes those two things go together like oil and water but your financial partnership plays a big part in whether you and your partner can succeed in your shared life together.
No one should enter a personal relationship and more importantly, seal it with marriage blindly without assessing whether this foundation is in place.
Whether your partner is a spender or saver, find out the following financial matters about your future spouse before you walk down the aisle. Do not be surprised if these conversations end up being more interesting than you think.
1. What is your money personality?
The first thing to identify is what your better half’s money personality is. Is he or she a spender or a saver? If you have been dating for some time, you might already know the basic information about your partner’s money personality. However, it is always good to discuss things more openly.
If you both are savers, it may blend well to achieve financial stability, however be sure you both do not hoard cash. As cash is subject to inflation, set your financial priorities right and put your money to work. Learn where you can invest with RM1,000 or RM50,000.
If you both are spenders, make sure you both are earning more than enough to cover both your lifestyle. However, make sure your spending do not exceed your income and create debt for yourselves.
Opposites do attract, but it could lead to tensions if one is a saver, while the other is a spender. They can still work together where the saver can draw the budget while the spender encourages everyone to enjoy the fruits of their labour.
As a couple, it would be best to discuss every saving or spending decision, to reach a compromise of a win-win situation. Agree to allow each other to have their own space to spend on things that they enjoy, such as electronic gadgets, or shoes.
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2. Do you have any debt?
Find out how much debt does your future spouse have and also what kind of debt it is. There is definitely a difference between incurring a credit card debt due to over or unplanned spending, and a study or car loan.
Discuss whether you will share the responsibility of paying off the debt as a couple, or it will remain with the individual. See how this debt repayment will affect the added financial responsibilities of the marriage.
If your spouse has been incurring debt due to overspending or simply to support a rich lifestyle, then it should not be encouraged. Plan how you can clear off your debts faster than expected and encourage the habit of saving for smaller purchases and avoid impulse purchasing. Only large purchases such as car and house should go with debt.
Besides that, it could help to know if your spouse has any outstanding traffic offence fines to be settled. Not settling your traffic fines in time can mean that you will be imposed with a bigger fine, affecting your road tax renewal or face summons at court.
3. What is your credit score?
One’s credit score reflects their level of “financial responsibility” and this impacts their ability to apply for a credit card or securing a mortgage loan. If their credit score is low, ask them why. Did they default on payments because they overspent on a large purchase or was temporarily out of job? Checking your individual credit score can be done with CCRIS.
While your spouses’ credit score does not affect your credit score as it is accessed individually, but it will come to play a role if you intend to apply for a joint mortgage loan to purchase a house as a couple. In such a scenario, it is important to identify and find ways to improve your credit score, for the benefit of both.
4. What and where are your assets?
Find out each other’s assets and where they are at– whether in a unit trust, stocks, property, or in the form of cash in savings, fixed deposit, or covered by insurance. This will help you identify if your spouse is risk-averse or not.
Also identify if you both want to maintain separate individual savings account or intend to create a joint account for family related financial matters.
Finding out both your debts and assets, will help you identify what is your net worth. Also, in times of emergencies, you will know where to look for funds. For this reason, it also good to categorise your combined assets according to the ease of liquidation.
5. Do you or your partner want children?
Having children can be expensive. It is important to not only discuss how many you would like to have, but also how will you cater for the financial responsibilities that come with it.
First, comes the expenses of child birth – a caesarean operation at a private hospital could cost over RM20,000 with costs of room and board plus medication included.
Second, comes the responsibility of bringing up the children. Will the wife or husband be a stay-at-home parent? If so, will it be a temporary measure or permanent? How will you manage the family with only one person’s salary? Or will you resort to babysitting? Babysitting for one child can range from between RM600 to RM1,500, depending on the location, age, needs and number of hours. Or are you planning to send your children to their grandparents?
Thirdly, how will you cater for their basic and education needs? You will need to be adequately insured for times of emergencies and save up to see them through a basic university education. It is important to gauge how much you will need and how to plan for the costs for a university education.
6. What are your future financial aspirations?
This is important to identify as it will help determine the kind of lifestyle you both aspire to have. It could be a RM20,000 salary target, a senior manager promotion, purchasing a property at RM600,000, an annual overseas trip, retire by 55 with RM600,000 and so on.
Once you have identified your financial aspirations as a couple, you need to calculate how to realise them. Will you both be able to afford this? If not, what adjustments will you need to make? You may have to increase your income or lower your expectations.
Read More: Take These 3 Steps To Get Your Finances Off To A Good Start As A Couple
By knowing your spouse’s financial personality, you can draw up a plan for your financial future as a family and know what to do on rainy days. That way, you will be better at executing your financial goals and probably achieving them in time.
You can help each other achieve these goals and start learning how to make sacrifices for one another. It is for the family after all and this can be much more romantic than it sounds!
