Managing finances in relationship (Part 2)
In last week’s edition, we discussed the essence of managing finances in relationship. Here are some additional tips.
Some people leave their toothbrushes one night, then a few changes of clothes, and before they know, they’ve moved in. Have a discussion with your partner about leases, household expenses, and other important matters before you make your decision.
Create a written living-together agreement. Clarifying your intentions in writing will help you to avoid misunderstandings and costly disagreements later. In most cases, your agreement will be enforceable in court.
Plan carefully before you borrow with your beloved. Determine in advance who will be responsible for debts incurred during the relationship. In the absence of an agreement, each partner is generally responsible for debts for which she has signed, often without recourse to the other partner for repayment.
Pay cash instead of debt
For newlyweds ,if you are paying for your own wedding, pay cash instead of going into debt. Have the courage to care more for the reality of your joint finances than the symbolic ritual of a lavish party. Consider having a small get-together to memorialise your love, and then throw a larger party when you can afford it.
If you receive monetary gifts on your wedding day, don’t spend them all. Set aside as much as you can to invest for shared dreams, such as a house, business, or children. Review your investments. Determine if you need to change your investment allocations to meet your joint goals. Your partner’s assets can provide you with some investment flexibility that you could not achieve while single.
Create workable structure
Create a workable structure for your financial lives. Who will be responsible for paying bills, filing invoices, balancing the checkbook, and researching large purchases? Establish a division of labour that suits your talents and needs. Celebrate your differences. If one of you is a saver and the other a spender, create a budget that allows for both. If your partner is a bargain-hunter, put him in charge of the spending part of the budget, while you invest the savings.
Confide in your partner
Confide in your partner. Keeping financial problems to yourself is destructive to the openness and stability of your relationship. Discuss your worries with your mate and ask her for practical suggestions and support.
Rank your financial priorities. Where your individual goals coincide, make a list of the steps it will take to accomplish those goals. Where they collide, figure out which you can live without and how to combine the rest with your partner’s plans.
Have spending limit
When it comes to starting a family and one partner will stay at home while the other works full-time, discuss the model you will use for your finances. Will you pay the homemaker a salary for her services? Have a spending limit for purchases, like a corporate buyer? Create an arrangement that shows respect for the most important job on Earth: raising a wonderful human.
Prepare a will
If you haven’t already, now is the perfect time to prepare your will. You don’t want guardianship issues to be settled in court if anything happens to you. Ask a friend or relative if he would be willing to be the legal and/or financial guardian for your children after you’re gone. Then, follow through by updating and signing your will.
If you stay home, keep up your career skills. Work part-time to maintain your skills and contacts, or go to school part-time to improve your financial prospects. Maintain your skills so you can ease your transition to the workplace.