Combining Finances with Your Partner 101

Every day, social media is abuzz with news of breakups, divorce, and a lot of relationship issues. On Twitter, every week there is a trend of who should handle finances in a relationship and who shouldn’t. These situations are pointers to the importance of finances in a relationship. Finances appear to be one of the major struggles when two people decide to live together or be in a committed romantic relationship.  Money conversations are avoided in a lot of relationships during the dating phase, probably because money is not the most fun topic to talk about. This however should not be the case.

It is important to have these conversations with your partner – not every time Netflix and chill. It’s perfectly understandable don’t want to ruin a perfectly great date night or picnic with a discussion about money and finances and all that, but these discussions will save you a world of trouble in future and even help you understand each other better while creating a bond between you two. Some important aspects to cover include on saving, budgets, investment, how to grow your finances among others.

Below are a few questions you need to ask before you start making financial decisions together:

Few ways you can combine your finances with your partner:

• Where does our money go? Couples need to be aware of the expenses they will be making together as a unit including daily household expenses (such as food and groceries, utility bills etc), bigger expenses such as rent, asset acquisition (cars, real estate) and individual discretionary expenses such as shopping trips, birthday gifts, haircuts, and holidays. Make a list if you must but ensure that your expenses are clear stated.

• Who pays for what? You need to decide as a couple about who pays for what in the household. This can be tough if both earn very different incomes, you may choose to divide the household expenses evenly or do this based on who earns more. After this, personal expenses can be paid for individually, usually, household bills and food are part of the joint budget.

• Who will manage the money? The next decision needs to be about who actually manages the money in the household. You may want to open a joint account that is visible to both and any monthly contributions can be deposited into it. You might find that your partner is more consistent in paying the bills so you might want to give your share of the bills to him or her.

• Do you have an emergency fund? You should make sure that as a couple you have an emergency fund in case someone loses a job or is taken ill unexpectedly. It is advisable to get health insurance to prevent spending your hardearned money on hospital expenses due to sudden illness. This will help keep the payments at bay until a permanent solution is found.

• Do you have debts? If you have any debts it’s best as a couple to make sure that there is a plan in which they will be getting paid. This discussion needs to include whether the debt will be paid off as a couple or whether this will be paid individually.

• Do you have investment plans and insurance covers? An investment plan and insurance cover help you build your finances and protect against losses. Insure your personal assets, get a health plan and invest in mutual funds.

You can build a great marriage or relationship with your partner by being more intentional about your finances.