It’s great when a couple is so sure of their relationship that they decide to take the step to live together. But, with so much infatuation, most people do not sit down to talk about possible financial problems as a couple. Especially on how to avoid them.
First, you have to have “the talk”
Although we believe that money is a difficult subject to touch, we should not let it go when we live as a couple. After all, if you are deciding to live together, the least you could hope for is to voice your concerns in confidence.
At this point, many couples assume that it is enough to have a light conversation about rent and services. There are even those who prefer to decide on the fly, but a mistake!
This occurs when couples assume that by adding together their income and dividing basic expenses, there is “money to spare”. Even though that may be true, this is curiously what causes more chances of having financial problems as a couple.
Why? Well, feeling that there is money to spare or that there are no immediate money pressures, couples do not feel the need to do detailed financial planning. In addition, in millennial couples who do not have children, their priorities often focus on maintaining a certain lifestyle. For example, making one or two trips a year, going out a lot to restaurants, etc.
What is there to express in this talk?
Whether you’re just moving in or you’ve been living together for a while, the first thing to do is budget as a couple. Now, as tedious as it may seem, the budget will not steal romance from your relationship, on the contrary, it will help you maintain open communication that transmits peace of mind and security.
Neither of you may have any experience budgeting, as around 60% of people don’t, either, but it’s never too late to start.
Begin by sharing what you consider to be the household’s priorities. It is not only about the rent and services, but the errand of the month, the subscription to the gym, the gasoline, and even the Netflix account (especially now that it comes with taxes), among other things. Do not forget that sharing a roof implies sharing a lifestyle and that is always reflected in finances.
Some couples decide to make a personal budget in addition to one together, which is also valid. Especially if there are issues on which they feel they must decide for themselves. For example, one of the two may be trying to pay off his TDC debt and need to allocate a percentage of his income without interfering with the established commitments and thus avoid economic problems as a couple.
In the end, it does not matter if there is a collective budget or if they have their own separately, the most important thing is that they land the goals and responsibilities that they have as a couple.
Other tips to avoid financial problems as a couple
Share stories from your childhood One of the biggest influences on how we handle our money are what we learn from home. Talking about how they were raised will help them understand the reasons for certain financial habits or priorities.
Maybe your boyfriend’s parents decided to invest instead of traveling constantly to have security in their retirement and from there you can understand why he insists on growing his wealth first. Although he may also feel that he needs to travel more since his parents hardly took him on a trip.
Ideally, they should approach these conversations with a receptive attitude to understand the concerns of the other and reach a consensus.
1. Be cautious
In general, when a couple decides to live together, it is nothing more for the sake of it. When you decide to share your life you have to ask yourself “what do we do in case of inconvenience?”.
The answer, in financial terms, is to have an emergency fund ready that allows us to be prepared for anything.
Think about what would happen if, for example, one of you were to lose your job. This is a situation that can bring them a huge imbalance, especially if they are used to depending 100% on the income of both.
For this reason, when they make their budget, they must allocate a monthly percentage that is added to the savings fund, which must be equivalent to at least 6 months corresponding to their fixed expenses.
2. Set goals
Maybe one Sunday morning they started to imagine “what if …?”: “How about we go on a trip to Japan?” “What if we start looking for a house of our own?” “What if we have children in a few years?” Or “Imagine if we move to another country!”
These and other plans should not be left lightly, if these dreams are important to you, then you should sit down and date them… and include them in the budget.
3. Find other ways to save
Think about what kinds of tastes you have in common and how you can share them to reduce expenses. Also, once they have set their priorities, they can be on the lookout for sales and discount times on certain things. The possibilities here are vast, you just have to spend some time thinking about your options.
Here are some ideas to start with. 😉