The biggest concerns for many life partners have to do with money. Who will spend what? How will you share the bills? How much will you save? You should discuss these questions even before you say “I do” or move in together.
Four big money questions for couples:
1. Will we combine our finances? If so, how? Some couples share everything. They have one joint account and share all the bills. Others share a few things or keep everything apart.
Example: Morris and Sam each have their own bank account. Plus, they each contribute $1,000 each month to a joint account to pay bills or save for shared goals.
2. How will we spend our money? Now is the time to set up a budget with clear spending limits. For example, agree on how much you each can spend without checking with the other, such as $100 or $200. For bigger purchases, you’ll talk about it first.
If you keep your money separate, make sure you plan who will pay which bills. Also discuss how you will handle your debts, including credit cards and student loans. Sometimes, one partner has more debt than the other. Sometimes, there are children from a previous marriage to raise. How will you share those costs?
3. How much will we save? The experts say you should always pay yourself first, even if it’s just $10 each week from each pay cheque. Some day, you’ll be able to use this money for big purchases like buying a car or a new home.
4. How will we take care of each other if life changes? Discuss what will happen to your money if one or both of you gets sick or dies. If you don’t have insurance at work, you may want to buy life insurance and disability insurance. If only one of you is working, it’s even more important.
Also, as soon as you marry, any will you made before is no longer valid. If you have children from a previous marriage, you’ll want to make sure you have a good plan for their future as well.
Remember: There’s more than one way to handle money as a couple.
You need to find what works for you and your life partner. Sometimes one person is more of a saver while the other person may be more of a spender. Make sure you talk about those differences. Then, work out a common approach you can both accept. If you find it hard to agree, a visit to a financial adviser may help.
Take this quiz: Love and money: How do you and your mate relate?