Learning how to manage finances with your significant other can be one of the hardest parts about transitioning into a more serious relationship.
After all, just thinking about money and budgeting makes a lot of people uncomfortable. Ultimately, this just adds unnecessary anxiety when it comes to starting and maintaining a healthy financial relationship with a partner.
Believe it or not, but money doesn’t have to be a stressor in your relationship. We’ve asked money coach Ashley Feinstein Gerstley from The Fiscal Femme and personal finance expert Rubina Ahmed-Haq to share their top budgeting tips every young couple needs to know.
Talk about it
The biggest mistake couples can make is waiting until you’re about to move in together or engaged before you start talking about money, says Ahmed- Haq. If you’re in a serious relationship, you need to openly discuss your debts, your salary and your financial goals for the next five to 10 years. Plus, it’s important to be open about your financial situation with your partner. “You can’t go into a relationship if you have a financial secret,” she says.
You’d be surprised about how many people actually tie the knot without knowing about their spouse’s finances. A recent study showed that one in four people didn’t know their spouse’s income and one in three people didn’t know the amount of their spouse’s student debt after the wedding. “You can see how difficult our relationship is with money when it’s something that’s even hard to talk about with our partners in life,” says Feinstein Gerstley.
Plan something fun
Want to talk to your partner about money, but aren’t sure where to begin? Start off by discussing something fun that both you and your significant other would want to do together, Feinstein Gerstley suggests. Once you’ve established your shared goal, you’d both be so much more motivated to save the money needed to make that dream come true.
Set up a joint bank account
“If you’re living with your partner, I believe you should live as one financial entity,” says Ahmed-Haq. Having a joint bank account together is an easy way to share rent, utilities and any other shared expenses. Be sure to also keep your own personal bank account, Ahmed-Haq advises, so that you’d still have the financial freedom to make purchases the way you see fit.
Always pay yourself first
Every time you get paid, the best thing you can do is to set aside money for an emergency or rainy day in your own personal account, says Ahmed-Haq. Once you’ve contributed to your personal savings, put money into the joint bank account you have with your partner. Afterward, the leftover money can be used for saving towards your goal, paying off any other debt and for fun.
Throughout this process, be sure to always keep your significant other in the loop. “Money is freedom to many people and it’s important for partners to understand what’s happening with your money so that both people are aware of where the money is going,” says Feinstein Gerstley.
Have regular money parties
Carve out time at least once a month for you and your partner to discuss your finances. During this time, about where you’re at with your goals or any unexpected costs that had to be covered since your last chat, says Feinstein Gerstley. The key is to make these conversations fun — try making a favourite snack for the talk and rewarding yourselves with a date night after the chat.
Set a threshold number
Avoid future fights by agreeing to tell your partner about purchases over a certain amount of money, whether it be $50, $100 or more. “A lot of people find it stressful when their partner unexpectedly spends money on something that they don’t think is necessary, so having this specific number set helps couples get in the habit of discussing bigger purchases before their made,” says Feinstein Gerstley.