How To Start Sharing Finances in a Relationship
Once your relationship starts getting serious, it may be time to start talking about finances. Discussing a shared budget can be tricky and often leads to arguments; it’s crucial to remember that with a little practice, open communication and trust, managing your finances together can actually become an enjoyable activity! Consider these few tips that will help you take the first steps toward a healthy financial relationship.
1. Understand Your Financial Status Quo
To start your financial discussion, let each other know about your individual financial situations and concerns. Without a good understanding of where you’re at, there’s no way you can make solid financial decisions going forward. Take some time to have an honest discussion and thoroughly assess how you’re doing financially — look at all the money you have between the both of you including checking accounts, savings accounts, and retirement accounts. Don’t forget to identify all of your debts including car loans, home loans, and student loans.
2. Set Your Financial Goals
Next, talk about the future — what are your short-term and long-term goals and how can you work together to achieve them? For example, short-term goals would be paying off car loans and student loans or saving for a vacation, whereas long-term goals would include mortgages and retirement savings. Discuss different things that you each want — children, a house, nice car, travel, etc. Prioritize these desires and try to find things in common — remember that it’s important to come to as much of an agreement as possible.
3. Make a Budget that Works for Both of You
Once you have determined your common financial goals, you’ll need a plant to help get you there. A good way to plan together as a couple is to make a budget — this will include everything from utilities and food to expenses like leisure time, children, emergencies and luxuries. Calculate how much combined income you’ll have, your debts, and your savings. Then, make a list of your monthly expenses and deteminre how much you can cut back to meet your financial goals. Once you’ve settled on a budget, you can then set up the accounts necessary to keep track of your finances — choose between a joint account, separate accounts or some combination of both.
4. Track Your Budget Regularly
A budget is only useful if you’re tracking it regularly. For your financial plan to work, you must make sure that you’re staying within your spending allotments and reacting to changes in expenses or income. One of the most effective ways to stick to your budget is to use a budgeting app. As a couple you will appreciate apps that offer collaboration features. For example, with sharing and syncing tools available with inBudget, you will be able to make a common budget and track each others transactions. You can even add comments, pictures, or hashtags to each others transactions to make budgeting more exciting.
5. Most Importantly — Be Honest and Ready to Adapt
When it comes to money management in a relationship, honesty is always the best policy. Keep in mind that you’re a team and are working toward the same goals. If you made a purchase that you shouldn’t have, tell your partner and deal with that together. Be ready to adapt as well — challenges like losing a job or suffering from a major illness could require some cutbacks and adjustments. In any situation that arises, remember to focus on solutions — not on blame!
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