Love is in the air, but is your bank account feeling the romance? ❤️ Don’t let money woes dim your glow in the month of love!
For the last two years, it’s felt like you were missing something big if you weren’t in a relationship or getting married. The high point of it all has been the last two Christmases, where the ‘Me and Mine’ gang have “tensioned” everyone unlucky enough to be single. Matching pyjamas, romantic photoshoots, adorable gifts– the whole ten yards!
But it’s about to get a whole lot hotter! It’s the season of love, and with Valentine’s Day only a matter of days away, we’ll witness romance at its peak. It’s one thing to be in a relationship, but what happens when the glitter settles, and real life intrudes? Enter the elephant in the room: money. It’s such a touchy subject; how you and yours handle it can determine if you will stand the test of time or fall like a pack of cards. So, how can you make it work?
In our first SimplVest Newsletter for February, Cupid’s💘 got some valuable advice about making love and money work, and we’re super excited to share!
Let’s get to it!
Five steps to strengthen financial compatibility in your relationship
Money talks may not be the most romantic, but they’re essential for a healthy and stress-free relationship. Did you know that financial decisions are a major source of tension for nearly 73% of couples? It’s time to take charge of your finances together and prevent them from impacting your relationship negatively.
Around 7 out of 10, couples have had financial disagreements, often involving priorities, needs vs. wants, and unplanned purchases. So, if you’ve felt like you were on the wrong path for arguing about money with your partner, don’t– it’s much more common than you think.
But it being common isn’t a good love sign either, and luckily, there are ways to improve the state of those crucial financial conversations. And it takes just 5 steps to begin:
Step 1: Start simple– JUST TALK🗣️
Sure, you’re probably wondering, “Could it be that easy?”. Of course, it can! Even where money is no laughing matter, you don’t need an overly serious approach to tackle it. Just be simple.
You can start by opening up about your financial situation and being honest about your goals, debts, and money habits. It always helps to discuss how money was handled in your individual families; this way, both of you can understand where you’re coming from and find common ground. Remember, it’s okay not to have the same attitudes towards money (no two persons are alike), so it’s all about finding a compromise. When you can successfully address potential issues in the now, you’ll prevent any misunderstandings and arguments that may pop up down the road.
A bonus tip is to learn about each other’s financial habits. The same way you figured out what makes your partner tick, what they like to eat and spend time doing, is the same way you should handle their money habits. Discuss what’s working and what’s not, and create a system that incorporates the best of your financial profiles.
Step 2: Add numbers to your conversations
You’re still talking, but now you’re also including the numbers. This means a close look at your individual incomes, any debts incurred, and the assets you may share together or own separately. Make sure to calculate your net worth and consider obtaining your credit scores where applicable. Full transparency on the table.
Another touchy but necessary aspect to discuss is whether you guys combine your finances fully or keep separate accounts. If step-kids are involved (hey, don’t rule it out), clarify how expenses for them will be handled. And don’t rule out conversations about black tax too! Communication is key to avoiding tense conversations later on.
Step 3: Establish a joint-spending (and saving) plan
Every couple is different, so you’ll have to find the financial management style that suits you both. You can choose to either
- maintain separate spending accounts or
- create a joint budget.
A great place to start is with a simple joint budget by adding up your monthly income and analysing what expenses both of you run within a month. With the numbers on paper, it becomes easier to see where you stand and determine your approach to tackling your spending. This method also works for savings– along with your income and expense columns, you can add a savings section where you deduct a portion to keep every month. Ultimately, it’s up to you two to decide if all of this will be done jointly or if you’d rather go at it individually.
Oh, and to make things smoother, a budget analysis calculator is always a great tool to have in times like this. And it doesn’t always have to be so severe, even though we’re talking about bills. Discuss the idea of setting up a ‘fun’ money fund with your partner. If they’re up for it, you can allocate some of your earnings for each of you to spend on personal interests to avoid money conflicts. To spice it up, cultivate the habit of putting in some of your money towards your partner’s interests if you can. It’s a great way to show you care for them.
Step 4: Set short and long-term priorities
The best couples talk about EVERYTHING. So, discuss your shared goals– whether it’s buying a home, travelling on a much-needed vacation, or paying off debt. Saving also becomes easier when you have a clear incentive to do so. There will be times when you come across some extra money, so why not save it together for those big plans?
It’s not just for the good plans, though. There are situations where your income is much lower than your expenses, so you’ll need to make cutbacks. It can be challenging to admit that you’re struggling to your partner, but think about it, if you can’t talk to them, who can you talk to then? At the end of the day, ensure your priorities end up with you freer, happier and in better conditions. If you put more thought into it, you’ll see that having shared goals can bring you and your partner closer.
Step 5: Get a move on
Turn your plan into action! You and your partner can assign bookkeeping responsibilities to one another so that you can keep proper track of all your financial activities. It also helps to reduce strife and encourage constant communication. Make sure you schedule regular “money dates” so you can review your progress, give you time to adjust your budget as needed and discuss upcoming expenses.
And where the going gets tough, don’t be afraid to seek professional guidance from a financial professional for tailored advice.
Ready to turn “happily ever after” into “financially ever after”? Grab your partner, a glass of bubbly (or something budget-friendly!), and set these tips into motion. Remember, open communication, shared goals, and a dash of financial planning are the secret ingredients to a love story that weathers any storm. Happy spending (and saving)!
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