Publish Date: 07/03/2019
Yours, mine and ours - handling finances as a couple
A committed relationship brings two people together, with different financial backgrounds and priorities. And maintaining these relationships requires couples to have productive and healthy conversations about money and finances, and the financial roles they will each play in the relationship.
Because money is such a touchy subject for many couples, it should be approached with open-mindedness and respect for each other’s financial history’s and financial goals. The most important thing to remember before you jump right in is that you’re on the same team as your partner. This means “my money” changes to “our money” and vie-versa. Here are a few strategies to help you handle money as a couple, ensuring you hit the ground running as you plan your future together.
Agree and work towards joint financial goals.
The first step to setting financial goals as a couple is to understand each other’s past and present financial situations and relationship with money. Who is in debt, who doesn’t have savings and investment accounts, who is working towards starting a new business etc. Then, set financial goals that you agree to work towards as a couple. Setting joint financial goals is a big and financially impactful process, which may cause some disagreements, but minimise conflict by finding the middle ground and being willing to understand each other’s perspectives.
These financial goals discussions can include family and career plans. For example: will you have a joint bank account? Are either of you planning on returning to school or retiring early? Are you planning to take time off work to pursue a business venture? These are just some of the questions you both need to find answers to. You won’t always agree on the goals you set out to accomplish, but you should be supportive of each other in pursuing them.
Set roles for yourselves
Are you earning more than your partner? Does most of your salary go towards servicing debts? Can you only cover the basics in the house? It is easier to stay on top of your finances when you’ve set defined financial roles that each person must play.
This determines who will be responsible for paying the bills, who will care for the day-to-day financial expenses/needs, who will ensure that you’re both saving towards retirement, etc. A big part of defined financial roles is for both of you to understand each other’s past and be honest about financial responsibilities, including debts, subscriptions, car or home payments, etc. These roles can change and be adapted as time goes, but the lines of communication need to always be open for this to work effectively for your relationship.
What does the future look like?
An important part of any strong financial plan is ensuring that your future, together with that of your partner, is protected. This means planning for scenarios such as retrenchments, accidental or health disability, or any scenario that could result in either of you losing income.
Losing one income in a household can have a dramatic impact on your lives. Fortunately, there’s insurance and investment options that can help you to guard against these events. Read more about these investment options here. If you’re covered, you have the peace of mind knowing your family will be financially secure should the worst case scenario ever happen.
Another way to think ahead in protecting your future is to consider professional assistance from a financial advisor. Consulting a financial advisor during and after this big life transition can help facilitate these discussions, set joint financial goals, and get you started on the right track. Read more on the benefits of a financial advisor.
The list is endless regarding the different conversations partners should have. However, the key takeaway is simple – have these conversations from the get-go. DO NOT avoid them or put off having financial conversations with your partner. Most importantly, keep an open and transparent line of communication.
About African Bank
Our mission is to be a successful Retail Bank offering a wide range of products and services to the consumers of South Africa. The people who work for African Bank represent the diverse population of South Africa; therefore we are a reflection of you, of all South Africans. We seek to provide value - more than our consumers expect of us. We promise to live our purpose 'humanity through banking' in all that we do and we are confident that we can, because 'We are You'.