Money
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Moving on Up as a couple
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Since Ashlee, 25 and her boyfriend Jarrod 24, first hooked up six years ago they've talked about the possibility of one day moving in together.
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But after just a few weeks spent house-hunting for their first shared rental residence, the pair have discovered that, while their toothbrushes might share the sink, their ideas and principles on money and household budgeting are askew Dollar differences lead to all sorts of prickly questions about income disparities, shared expenses, joint bank accounts and household budgets – which, if not dealt with, could spell the end of a love nest.
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That’s according to senior financial planner Scott Brouwer, of Big Sky Financial Solutions. So just how should a couple with different spending habits go about achieving financial harmony? Well, in Jarrod and Ashlee’s case, the couple realised she was a supermarket home brand kind of shopper while he was tempted to skip the weekly grocery excursion altogether in favour of their local pasta joint. Brouwer believes Jarrod and Ashlee’s problems are easily solved with a simple three-pronged attack which includes: drawing up a budget, maintaining effective communication and sharing certain expenses so they are not doubling up on bills.
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Plan before you move in!
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“The most common mistake is when couples fight after the fact, rather than debating beforehand. A lot of arguments couples have are over money – a lot of divorces are caused by financial differences,” warns Brouwer.
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Budget
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A couple needs to sit down and work through a financial plan that they both agree on. However, it should not be completely rigid.
“It has to be a broad spine in terms of what is going in and what is going out,” he says.
In Ashlee and Jarrod’s case – she is earning more money than her boyfriend, who is also paying off some student debt. So in their situation they’ve considered starting a joint bank account.
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“You need to have a serious discussion before setting anything up. Incomes are going to be different. It might be that a ‘What is mine is mine attitude’ works for you. But then you will also need to have a common pool to put money aside for bills. Individual accounts should also come into play when funding personal expenditures.”
Brouwer says this whole process must again be tweaked as the couple matures and starts to take on more responsibilities, such as children and a mortgage.
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Communication
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A good old-fashioned chat about money is essential. “Every Friday going to the pub after work might be seen as a lavish expense but it could be a really important part of that person’s social life – it might be about more than just going to the pub and drinking beer.
“If it’s the guy we are talking about, it might be the only thing he does on his own, it’s his time. That might be important and – once understood by the other partner – it’s something they can factor in to their budget … that it’s going to cost $75 every week to enable him to do this.
That’s why pre-planning is so important,” he says.
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Economies of Scale
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Get your names on everything! Not on the back of the telly or the wagon-wheel coffee table but on those dreaded monthly bills that land in your letterbox. Brouwer says: “If the account is not in your name and you ring up to query a bill, the electricity company won’t talk to you.”
Jarrod has electricity and telephone accounts in his name, while Ashlee has her own telephone and broadband account as well as a gas supply contract.
“They are a mini economy of scale – because by coming together, a lot of costs that were duplicated become singular so there are some reasonable savings to be made,” he says.
In summary, Brouwer’s top tips for maintaining a healthy relationship when it comes to money matters include:
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- Effective, honest communication
- Planning a budget together
- Looking at the best option for your finances – both individually and in a joint account
- Ensuring both partners have their names on all household accounts
- Avoiding doubling up on certain household expenses.
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And remember: you are not twins living one life, says Brouwer. “Know that as well as being a couple, you have to lead independent lives as well.”
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Any advice given is of a general nature only and does not take into account your individual objectives, financial situation or needs.
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