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The decision to start a life together is a natural continuation of a romantic relationship. But sometimes the illusions of lovers are broken by everyday life and unwillingness to listen to each other. The financial issue is another test for the couple. We tell you what you should agree on in advance and how to protect the joint budget from force majeure.
If you start living together, then you probably experience both joy and fear at the same time. On the one hand, now you will finally belong to each other undividedly, but on the other hand, you will have to accept or not accept each other’s habits. Arguing about how the hallway should look like or whether a steak for breakfast is healthy is unlikely to be a serious reason for breaking up a relationship. But disagreements in financial matters can strike even a strong union.
We have compiled for you 6 financial rules that are useful to read before you start living together.
1. You must have common goals
As a couple, you must work together towards some common financial goal. Then there will be a feeling that you are partners. Of course, you don’t have to directly ask, “What are your goals?” Dream together about how you would like to see your life in five years. Find out how your partner imagines his life at the age when the children grow up (and, by the way, how many will there be?).
It is possible that you have different ideas about a wonderful future. But any coincidence can become a starting point for overall financial plans and goals. Otherwise, everyone will spend money only for their own purpose, which will sooner or later lead to disagreements.
Your plans will change over time – adjust them, taking into account the interests of each other
By the way, do not forget that both general and your personal goals will change repeatedly over time. Don’t take it as a setback, it’s normal for every couple. Just remember to discuss the changed circumstances with your partner often and listen carefully.
Something will have to be abandoned over time, but many new opportunities will appear. Adjust plans, taking into account the interests of each other.
2. Pay attention to your partner’s financial habits and impulsiveness
Sometimes a couple moves in literally in the first weeks of dating. Excited that a new stage in life has begun, neither he nor she dares to talk about such prosaic moments as finances. Already at the beginning of the acquaintance, pay attention to how impulsive your partner is and whether he is able to plan. This is not always easy to assess, but it is an important point.
You don’t have to talk about it directly. Observe and draw conclusions. Assess how your partner is prone to impulsive spending. Or, on the contrary, thrifty and even stingy.
Rachelle Smith, a certified financial analyst, says many of a person’s financial habits can be learned from family stories. She also advises asking the following question, among others: “If you won the lottery, what would you do with the money?” Would he invest in real estate? Spent on a new model car, on a party that everyone will remember? The analyst advises to talk about it literally on the third date, in order to know whether it is worth wasting time on the fourth.
3. Credit history
Information about the general financial situation and credit history of the partner will not be superfluous at all. This refers rather to the tendency to live in debt or to calculate one’s expenses. How can one find out such a subtle point with the utmost intelligence and delicacy?
Indirect questions will help. For example, if you’ve known each other for a while, tell us about times when, after an impulsive purchase, you felt sorry for the money spent. Ask if there have been similar stories in your partner’s life. Ask about what he considers the most valuable acquisition in his life, what he only dreams of buying and what steps he takes to achieve the goal. If a person is frank with you in financial matters, this is a good sign.
4. Mine – yours – ours
Having decided to live together, decide on the boundaries: “What is mine, what is yours, and what can be considered ours?” The first impulse, of course, will be to consolidate all finances. This is exactly what the experts advise against doing. Alice Torabi, financial coach, reminds: “You are not roommates to accurately calculate expenses and repay debts up to a ruble, but you are not yet a family. Until you have officially registered a marriage, you should not combine all accounts into one or take one mortgage for two. For now, it’s too risky.”
Secret shopping trips will destroy trust within a couple
Instead, she recommends starting with a financial “test drive” – saving up together for a trip, then for a joint purchase. The situation would be ideal if you had the same income, but even then your personal expenses will be different. Assign a “sphere of influence” to each: one pays the bills for the apartment, the other pays for electricity. Divide food expenses in half.
5. Honesty Above All
Do not hide financial expenses from each other. This advice comes from Trent Hemm, creator of Thesimpledollar blog. Secret shopping trips will destroy trust within a couple. This does not mean that you need to account for every penny spent, but it will be better if your personal expenses are within some amount agreed upon by both of you, and you will discuss large purchases together in advance.
6. Be prepared for force majeure
You need to be prepared in advance for the fact that there will be a time when one of the partners will take on all the expenses – regardless of whether he earns more or less. One of you will finish your studies or go to improve your skills, changes at work or the need for treatment are not ruled out. So that this does not come as a surprise to you, it is better to tune in in advance. According to statistics, every couple goes through such periods if people live together long enough. Knowing that this is the reality and then everything will return to a stable course again, it will be much easier for you to survive this time.
It is very useful to have your general reserve fund. You can put small amounts here to create an “emergency reserve”, which is useful for car repairs, and for urgent purchases, and for solving temporary difficulties. This will teach you both how to save. In addition, this is another joint business that will only strengthen your union.
8. Discussion of any financial matters
Do not be afraid to discuss any questions and problems, including financial ones. Do not be silent, speak openly about what you like and what you do not like, and together look for compromises and ways to resolve any issues. Solving problems together is the best way to prevent financial disagreements and ensure that you stay together.