So, love has blossomed and you think you’ve found the perfect partner – but are you financially compatible? Understanding each other on money issues can go a long way to making or breaking a relationship.
Emma-Lou Montgomery, associate director at Fidelity International (fidelity.co.uk), shares eight tips for making sure your finances flourish in your relationship.
Don’t be afraid if one of you is a saver and the other is a spender
In a balanced relationship, having one keen saver and one more comfortable spending can be beneficial – if it’s clear who’s responsible for what financially in the relationship. The saver can encourage a healthy attitude towards financial saving goals – be it a first home, an adventure holiday, or just cash for a rainy day. On the other hand, the spender may take on monthly living costs and cover expenses like socialising with friends and family.
Don’t leave your partner in the dark
All too often, couples leave one of the parties completely in the dark over bigger commitments, like savings or retirement plans, leading to misunderstandings and tension. The money and your financial security belong to both of you, so make sure you both have at least a basic understanding of the state of your finances. It may feel daunting at first, but talking openly about your finances is important, both when fostering new relationships or maturing in a long-term relationship or marriage.
Many people hide debts from their partner – often out of embarrassment. But honesty really is the best policy. If you’ve come to the point when securing a joint loan or mortgage makes sense, it’s crucial any unpaid debt or blips on credit scores come to light. A supportive partner will work with you to find a solution. If they’re not up to it, then better you know now rather than later.
Don’t let ‘outside’ interests/expenses become a source of conflict
It may be that you have children from a previous relationship who need your financial support, or a hobby that requires a substantial financial outlay. If you aren’t open about the costs with your partner, these ‘outside’ expenses can become a source of conflict. Be up-front and honest, so you both can ensure you’re able to factor them in to your shared budgeting. Often, keeping a separate pot of money or a separate account for these expenses is a good way to ensure they’re accounted for and covered. Separating them out also means they’re not a constant niggle to your partner. Setting up a direct debit to cover these costs is another way to make it easier.
Don’t be afraid to take control
It’s good to plan together, but make sure you take responsibility for your own finances – whether it’s by opening a savings account or contributing to a pension.
Protect yourself and your partner
Nowadays, many people choose to live together before getting married or without tying the knot at all. However, this can be an issue in terms of finances. You could consider setting up an agreement to ensure both parties are protected and assets are divided as you would wish.