Money can be a tricky topic to navigate for many couples, but it's important to understand that getting married will have a significant impact on both you and your partner's financial situation. Whether you intend to merge your finances or not, it's essential to have open and honest conversations about money early on. According to studies, one in three adults admits that money is the primary source of conflict in their marriage, making it one of the leading causes of divorce. Taking the necessary steps before walking down the aisle can save you a lot of headaches down the road. Here are four financial topics to discuss with your partner:
- Income: Discussing your income is an excellent starting point for financial planning together. Your salaries may differ in amount and come in various forms. Regardless of whether you are paid hourly, a salary, or commission-based, it's essential to discuss the specifics and share any expectations you have for future bonuses or salary increases. When both of your incomes are laid out, it's easier to see what you'll be working with each month.
- Debt: Revealing your debts can be uncomfortable and sometimes shameful for some people. Whether you've fallen into credit card debt or have student loans, it's essential to be transparent with your partner. Keeping debts hidden will only lead to future issues. By being transparent, you create space for collaboration. Both you and your partner can work together to develop a plan to reduce unwanted debts, rather than leaving the responsibility to one person.
- Bank Accounts: Each of you may have multiple bank accounts with different purposes. Sharing bank accounts with your partner, whether you combine your finances or keep them separate, can promote transparency and reduce the probability of keeping secrets. Some couples choose to keep their finances separate but have one joint account for household expenses and savings, which could be a suitable compromise if there is a difference of opinions. Will you both split bills equally? Is everyone expected to contribute a specific percentage of their income? Is it possible to combine all the funds into one account and withdraw money for bills as required? These are essential questions to ask. Discuss your expectations with each other and work together to find the best situation for your needs.
- Monthly Budget: Budgeting is probably one of the most challenging aspects of financial harmony. Each person's priorities and spending habits could differ significantly, making it hard to find a good balance. Start by laying out all of your necessary monthly bills, such as mortgage payments, utilities, Wi-Fi, groceries, etc. Once you have established these parameters, you can review the remaining monthly income and decide how much of it can be allocated towards entertainment. This will look different for everyone. Maybe you like to eat out at restaurants multiple times a month, or perhaps your partner has a gym membership to upkeep. No matter what your lifestyle is, it's essential to put it down on paper and budget accordingly. The more specific you can be, the more effective the budgeting process will be. It's also important to keep in mind savings and emergency expenses while planning your budget.
Financial planning with your partner doesn't have to be a daunting task. Use each other's strengths and weaknesses to create a system that suits your household best. If you're considering purchasing a home together, it's a logical next step in your relationship. Contact your local mortgage broker Onshore Mortgage, LLC. to see if you qualify today !
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