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Managing Finances in a Relationship

If you are used to living on your own paycheck, managing finances when you are in a relationship could a totally different ballgame.

You may have two different incomes and your expenses could increase. If you are not careful, you may hurt your financial standing as well as the relationship. Money is still a very sensitive topic among many couples and you need to be more deliberate and open to keep your finances and relationship healthy.

First, you need to establish a budget that will satisfy your living expenses. Consider your utility bills, transportation, home mortgage and other basic expenses into this budget. Discuss from which account you will get the funds to fuel these expenses.

Second, discuss if you’d like to have separate or joint accounts. You may want to pool your funds together or have separate accounts for your savings. There is no wrong or right answer for this, but aim to have a decision that will work and be beneficial for you.

Do not forget to decide how you will go about your savings and debt repayment. Will you be consolidating your debts and pay them off as one entity or would you like to repay separate debts? Will you also be imposing a limited amount for luxuries? Who will handle your taxes and monitoring of your accounts?

As a couple, it is best that you are transparent about your needs, your past obligations and your financial goals with each other. One of you could have taken cash loans in the past which still needed to be paid today. Or, your spouse may have hidden his online loan only to surprise you with a collection bill one day. These things could spark hostility in the relationship later on if you do not disclose the loans and debts you have taken.

If you view your finances as one entity, an “ours” instead of “mine and yours,” it is essential that the couple respects the budget and is open for any huge expenses that can hurt your financial status. The couple should make huge financial decisions together so they are both aware where their finances stand and become wiser with their next purchases.

On the other hand, the couple could get bad credit to their name if they continue to spend without regard. Bad credit rating could hurt your financing options, like mortgage and loans to banks. It is always best to tackle these issues together and have an open communication to be able set realistic expectations of your financial health.