couples finances Archives | MoneyDigest.sg

After saying ‘I do’, there are now more things to consider past the courting phase. As you begin preparing for your special day, take time to think about what happens after that. As I’ve heard many married couples say, the real deal begins after exchanging your wedding vows.

One of the most touchy issues is that of finances. While there are couples out there who manage their finances separately and successfully, some of you out there are wondering if you should do a merge. If that is so, you will need some fast advice to get you going.

#1: SET DATES

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To decide if you should do a merge, full disclosure is needed. This means hiding nothing and having an honest discussion. Laying everything out on the table helps you and your partner to see where both of you are at in terms of money management.

The most obvious thing to discuss is the shared expenses for the house. We’re talking about things like the mortgage, various monthly bills, and even weekly spending groceries. A 50-50 might do the trick if both of you guys are receiving the same paycheck. But that’s usually not the case. Thus, maybe a monthly contribution of a fixed percentage of your income might work?

There’s also the question of raising kids in the future. An extra person or two will cost and this is another major topic on its own. We know one sit-down session won’t work with so much to decide. Thus, set dates. Make sure you allocate enough time to go through the nitty-gritty. Rushing through the conversations will only hurt later.

#2: SHARE YOUR FINANCIAL SITUATIONS

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‘For better, for worse, for richer, for poorer, in sickness and in health, until death do us part.’ That’s one of the common marriage vows exchanged on the most important day. To do so, you will need to walk the talk and get down and dirty with your financial situations.

Apart from salaries and bonuses, there’s also the topic of debt and other large expenses unknown to your partner. Now’s the best time to share your financial plans and future goals as well. What are the steps you or your partner are taking to pay off the debt? Will this affect your early years of marriage? Can either of you make compromises?

Let’s not forget routines! Is an annual trip to Europe feasible? Or can you two only afford a staycation at the moment? Talk about habits like the frequency of dining out per week and any expensive hobbies you might have.

#3: COME UP WITH A STRATEGY

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This is the final stage should you decide to merge your finances with your partner. After the sharing sessions and much pondering, it’s time to come up with a long-term strategy.

How will the merge be like? Are we talking about shared bank accounts and credit cards? If that’s the case, you may consider having one shared bank account. This account can be a place for crediting an agreed percentage of your salary and also withdrawals for shared expenses for the family.

After reviewing your strategy and realizing you guys have enough money for investment? Go ahead and discuss if the both of you should open up an investment account. Also, decide upfront who will be the main person managing the funds for investment. It’s also important to do a yearly review of your strategy.

We’re honestly just scratching the surface with some of these questions. As each couple is unique, there may be other unique issues that need to be brought up. Also, you and your partner must be aware that bickering might arise while going through this entire process. If required, allow yourself some ‘time-out’. Nothing said in the heat of the moment is rational.

Managing your finances together can be tricky when you are in a committed or serious relationship. However, you can employ several strategies to avoid headaches and arguments surrounding money.

#1: DISCUSS ABOUT YOUR FINANCIAL GOALS

There are a handful of Singaporeans who tackle life from paycheck to paycheck. These people deal with the expenses as they come without forethought about their retirement fund. Do you want to be in the same situation?

You have to realize that financial stability is important in strengthening the future that you want to build together. So, start by establishing at least three financial goals. These initial goals are short-term and realistic. Whether you want to save up for a getaway in Bali or a broadband bundle, your short-term goals will serve as an encouragement to take on bigger goals that will lead up to financial security.

#2: KNOW EACH OTHER’S FINANCIAL STATE

Tying the knot or living with someone who has a bad credit score may affect your finances. Imagine taking out a mortgage. Your partner’s credit rating may affect the potency of your combined credit score. This is not good!

Mutual disclosure can help you reduce conflicts over financial matters. As early as possible, carefully examine each other’s financial state and exchange useful tips. Are there any spending habits that you want to help your partner with? Do you have some outstanding student debts? Familiarize yourself with his or her deeply rooted attitudes and habits toward money.

#3: CREATE A MUTUAL UNDERSTANDING

As a couple, aim to distribute the control of your finances equally. Educate your partner about the facets of personal finance no matter how uninterested he or she might be. Financial literacy is necessary.

Aside from mutual disclosure, mutual understanding is crucial to your success. This means that you need to be aware of what you two can and cannot afford. Furthermore, you must contemplate on the process of dealing with unfortunate events.

#4: MAINTAIN JOINT AND INDIVIDUAL ACCOUNTS

A couple’s joint account is primarily used for shared expenses such as groceries, utility bills, phone bills, and mortgage repayments. Maintain this along with your individual accounts. You are entitled to a separate account because you must treat yourself or your partner personally without affecting the “household fund”.

You might say that this burns the bridges of sharing, but not really. The foundation of having individual accounts is that both would have access to each other’s account to prevent from keeping secrets. Spending beyond the threshold of your personal account is something that you need to discuss with your beloved first.

#5: DIVIDE YOUR MONETARY RESPONSIBILITIES

Compromise could be your best bet when you are sharing the responsibility for your finances. This goes hand in hand with the above statement. Having a joint account and two separate accounts helps to keep your independence and to stick with your budget.

Here are just some things that you must contemplate on when you are dividing your monetary responsibilities:

a. What are the bills that you want to pay using your joint account?

b. How much shall each one contribute to the joint account?

c. Which of your partner’s spending habits do you want to keep and to ditch?

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May these tips help you to foster good financial management habits as a team!

Sources: 1 & 2