No matter how experienced you are at handling your own money being a couple introduces a new dimension to finances. Sometimes there are tax incentives or opportunities that are not available to singles, and there is the whole question of responsibility to sort out – like who will make sure bills are paid on time!
What are some ways you can handle finances as a couple?
1. Talk about priorities and come to some arrangement about what is important to you both. Before money even comes into question couples need to have discussed basic priorities in their relationship. It is important to establish whether you have mutually compatible goals – like seeing the world at any cost, or settling down and buying a house. Without some idea of where you are heading disagreements about money will easily arise.
2. Resolve the bills. Whatever your life situation you will have bills to pay – from rent or mortgage, to food and clothing – you need to work out a system so these bills are paid. When both parties work some couples pool their money into a joint fund for bills and arrange automatic payments to be made; sometimes the wage earner will take care of supplying the money while the non-working partner makes sure bills are paid. Whatever you do you need to resolve the bills, including grocery expenses.
3. Personal purchases. Work out what you will do about personal purchases – from books and clothes, to electronic gadgets. Some couples create an account with some personal money that they can spend as they want; others consult each other over every purchase that is more than $10. Even if you have separate accounts, separate incomes and separate jobs you need to talk about what you are spending – at very least so you don’t both buy the same thing because you haven’t communicated you are going to get it!
4. Financial incentives for partners. As a couple you will face opportunities that are not available to singles. There may be tax incentives for including your partner on medical insurance – saving them the need of paying for theirs separately; you might be able to take out joint car insurance; make tax effective superannuation payments for your non-working partner and so on. Make sure you have some idea of what financial benefits there might be as a couple and use them!
5. Life insurance. Being a couple means that you are building a life together. You will want to consider what will happen if that happy partnership is terminated through early unexpected death. Will you invest in life insurance, or have some other arrangement so that the surviving partner can financially manage.
6. Make sure you know your financial situation. As a couple you need to make sure that you both know your overall financial health – your budget, your debts, your income, your goals and so on. Consider making up a spreadsheet or keeping a written account of your financial health so you both know where you are. If an element of your life – like power bills – is starting to cost too much you will both be aware of it as soon as possible and can take steps to realign your priorities and budget.
There will always be things you have not anticipated when it comes to finances but open communication about priorities, knowing who is responsible for what and shared knowledge about the details of your overall financial situation will go a long way to helping the handling of finances to go smoothly.