Money management is a crucial aspect in any relationship because money issues can actually cause relationships and marriages to break apart. If you’re planning to tie the knot or starting a committed relationship, it’s important to sit down and talk about your spending habits and saving plans and then come to an agreeable money management plan as a couple.
Tips on money management in a relationship
Making big purchases
Carefully plan out when to purchase a property such as a house or a new car. It’s very tempting for newly married couples and those in committed relationships, to establish their life together by accumulating properties right away. Instead, establish responsible spending habits based on your incomes. It’s better to accumulate possessions slowly but surely than to accumulate them fast and run the risks of losing them eventually if finances are not managed properly.
Know where your credit stands
Take into consideration each other’s desire in maintaining a good credit score. All relationships should have a steadfast rule in being careful with spending habits. Although the credit score is based on individual performance, it may also affect your decision making in terms of spending if your partner is having financial issues. If both of you are free from financial woes, you are in a better position to make decisions when buying a property or making a big purchase.
Emergency funds
Set aside money for unexpected circumstances like illness, car repairs, etc. It is advisable to have at least 3 months worth of salary saved in case urgent matters arise. As much as possible have this money secured before you purchase anything.
Starting a family
Plan ahead before you start a family. Take into consideration the financial duties attached to raising children, from infant to adulthood, which can get financially and emotionally stressful. Discuss how many children you are able to raise until you both come to an agreement.
Manage payment plans
Be on time in settling your bills in order to maintain a good credit score. Being on time saves you from incurring penalties and the possibility of getting another loan to pay for an existing loan. Money management skills such as avoiding impulsive buying guarantee that bills and primary needs are prioritised over desires.
Put things in writing
Relationships can easily get severed when financial problems arise so it’s important that everyone is aware of what they’re getting into when money is involved. As much as possible don’t leave any questions unanswered before co-signing anything and put into writing all arrangements instead of relying on verbal agreement.
Money management allows you to see the costs in advance that come in buying a major property such as a car. The longer your installment plan is the higher the interest rate becomes. It is highly advisable to come to mutual agreements when managing finances between two people in a relationship. It’s best to be fair and considerate of each other before combining finances to keep the relationship strong and healthy.