Talking money with a partner

Here are some factors to consider before you join finances with a partner.

While you've likely imagined what a future with your partner looks like, you may not have considered the financial implications of that future. Think: careers, kids, caring for aging parents, and even where you want to live and travel to. In reality, all these things have price tags attached.

Of course, every relationship is different and how each person approaches finances is highly personal. In any case, here are a few things to consider if you're thinking of joining finances with a partner.

Identify assets and liabilities

Start by identifying your own assets and liabilities. Assets are things you own – your investments, property, salary – and liabilities are things you owe, like rent, mortgage and student loans. Have your partner do the same so you can both be transparent about your financial situation.

Define shared goals

Just as when you're managing your personal finances and investments, it's useful to think about your long-term goals and what matters most to you both. Having shared goals can help ensure you have a coordinated approach to saving and spending, and what you need to do to reach them.

Decide if you want to join accounts

There are several ways to join finances, from combining some of your money for shared expenses to combining everything, including income and investments. There's no right one size fits all solution, but rather, it should be dependent on what you're both comfortable with. Consider keeping some financial independence and making sure there's equal control when managing money. If you're unsure what arrangement suits you best, it's always wise to consult a trusted financial adviser.

Decide on a budget

Once you understand your own financial situation, you can then decide on a budget together or at least have a rough idea of how much you can both afford to spend.

Begin by sorting your monthly spending into categories—housing, dining out, savings, etc. If you notice you're not saving as much as you'd like, you may want to cut back on your spending in other areas.

Keep in mind that you and your partner will need discipline to implement a budget and stick to it, and this may require changes or sacrifices in your everyday life. But don't be afraid to hold each other accountable. If you're trying to save but notice shopping packages piling up on your doorstep, ask each other if you're on the same page about what's needed. The conversations might get tough, but remember this should never feel like it's you versus them. You and your partner are a team working toward a goal.

 

 

Vanguard
24 May, 2022
vanguard.com.au

More Articles

Why crypto treads an uncertain path through tax minefield

The taxation of digital assets used for lending and borrowing would benefit from clear-sighted...

Read full article

Wheat Production by Country

Check out the countries that produce the most...

Read full article

Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’

Following years of mixed messaging, Labor has bowed to economic pressure and announced changes to its stage...

Read full article

Investment and economic outlook, January 2024

Region-by-region economic outlook and latest forecasts for investment returns. . What might shipping...

Read full article

Quarterly reporting regime means communication now paramount: expert

Communication between SMSF trustees, accountants and advisers is more crucial than ever with the quarterly...

Read full article

Four timeless principles for investing success

Investing success can mean different things to different people. Being clear on what success means for you is...

Read full article

Plan now to take advantage of 5-year carry forward rule: expert

This is the last year that the five-year catch-up contribution rules for concessional contributions can be...

Read full article

Super literacy low for cash-strapped

Financial literacy around superannuation is poor for many lower-income people, who still question why they...

Read full article

Sofie Korac is an Authorised Representative (No. 400164) of Prudentia Financial Planning Pty Ltd, AFSL 544118 and a member of the Association of Financial Advisers.

Financial Advice Sydney and the North Shore Office based in Gordon NSW

Financial Services Guide - Disclaimer & Privacy Policy

^