Take These 3 Steps To Get Your Finances Off To A Good Start As A Couple
Happy Valentine’s Day, people!
Once you are done with the roses, chocolates, cards, gifts, surprise visits, Instagram photos, and #relationshipgoals selfies, perhaps you can do one more thing to ensure your relationship thrives in the long run and lead you to ‘Happily Ever After’.
Bring up a subject that is almost always a taboo among couples.
But, finances are deemed to be highly personal, sensitive and for some, even embarrassing.
If you are married or thinking of taking the leap of faith from dating to marriage, here are some ways you can make it easy, efficient and rewarding.
Start with your current financial situation
A peek into your individual needs, spending habits, and financial perspectives will give you a solid foundation to build the next steps.
Imagine getting to know about your spouse’s half a million ringgit debt a week after you signed the marriage papers. Worse, realising that your partner is the living embodiment of #YOLO and doesn’t believe in saving for emergencies.
An honest conversation about your debts, credit score, credit card habits, savings, and investment will give you a better view of each other’s finances.
It’s great if both of you are aligned with each other. However, if things are off track, it’s time to discuss and find a balance. After all, a relationship is all about working through the differences as a team.
Next, talk about your short term and long term goals
Goals require planning and most of the times, sacrifices. If both of you are not aware of and aligned with your life goals as individuals and couples, it might get complicated and tricky down the road.
For instance, are you going to save up for down payment of your first home? Are you going to have kids (Kids are costly, for your info)? Which of these are you going to prioritise?
A lapse in judgement or lack of planning might lead you into spirals of debt or series of misunderstanding because as a couple, both of you will have to face the consequences together.
Some of the crucial finance-related goals that you should talk and clarify about are:
Cost of living varies with locations (urban or suburban), so talking about the kind of places you hope to settle down will be useful.
Next, are you going to buy a home or rent until you are more stable financially? Knowing these details will make it easy for you to plan how you are going to materialise these goals.
Raising kids can be emotionally and financially taxing. From taking care of their health and starting their education fund to tending to their needs and wants, money becomes a crucial element.
Do you want kids? If yes, when? And how do you plan to deal with all the extra expense?
Of course, all work and no play will make any relationship dull. You need to factor in the marathon, long weekend trip to Langkawi, international travels, and checking off your bucket list (remember, you now have two bucket lists!)
Are you going to save money for your grand trip or are you going to go for smaller and budget-friendly trips every other month? Where are you going to source your travel money from?
Investment plans differ according to the individual. Whether you are cautious and opt for a balanced risk portfolio or you are a risk-taker, it all comes down to your goal.
How have you optimised your portfolio to ensure you retire gracefully? Is your partner tuned in to your plans as well?
These questions are crucial, as an investment is a long-term commitment and both of you should be aware of what is going on with each other’s portfolio.
Last but not least, how is it going to be moving forward
Now that you have come clean to your partner about your current financial standing, shared your goals and aspirations, it’s time to get to work on embarking on a financial journey as a couple.
Some of the aspects that you should never overlook in your financial journey are:
- Joint savings account
- Building emergency funds
- Medical and life insurance
- Sharing of day-to-day expenses
- Tracking of spending
- The frequency and limit for splurges
- Weekly, monthly and yearly budget planning
The aspects above are unique to the dynamics of your relationship. Some couples are perfectly fine with being open and sharing every tiny detail about their finances. However, some couples may prefer to maintain a certain degree of individuality in their financial planning.
It’s best to ‘do the money thing’ with your partner now and get your hands dirty, once and for all!
This article was first published in February 2020 and has been updated for freshness, accuracy and comprehensiveness.