Moving in with your partner? Having a conversation about finances early on could save considerable stress and conflict in the future and may even protect you financially. Here’s how to get the ball rolling…
You’ve met the partner of your dreams and have been dating for a while. You’ve shared everything with them, from your likes and dislikes to your passions, hobbies and goals, and you’ve decided it’s time to take the plunge and move in together. But there might be one important thing you haven’t done yet – had a frank and honest discussion about money.
Talking about money isn’t something many of us feel comfortable doing. It might be that we’ve been brought up to believe it’s taboo, and sitting down to chat about bills, savings, debt and financial expectations isn’t exactly romantic. But it’s still hugely important.
Secrets and lies
Indeed, research commissioned by Lloyds Banking Group found that almost a quarter of people (23%) have lied to their partner about money, be it a secret credit card or savings account, or not being honest about the amount of debt they have, big purchases they’ve been making or even gambling problems.
And it’s not just secrets that are an issue. According to the website, Family Law Partners, money issues are one of the main reasons why marriages break down – and it’s not specific money troubles that are always the cause. In fact, differing views on finances are also often to blame – for example, if one partner is inclined to save and invest, while the other is more driven to spend. The arguments and tension that can arise from this situation can lead to a distinct lack of compatibility.
It’s something we hear often from some of our clients – they suddenly realise they are the one with the highest outgoings, because they’re the one paying a large chunk of the bills and the mortgage, and they don’t feel they have the support of their partner.
It’s clear, then, that sitting down and discussing your joint financial expectations before committing to moving in together is vital, in order to maintain a healthy, happy and trusting relationship.
It’s good to talk
While discussing finances with your partner can feel daunting, it might be a relief once you get going. Discovering your partner’s views on money, as well as sharing your monthly outgoings with each other, including loans or debts you may be paying back will enable you to enter your home-owning partnership with trust and honesty. Here are some of the things to broach – and how to do it sensitively.
Discover your values around money
This is a great starting point, as it will help you discover both your own and your partner’s views and values around money. Do you like splashing out on luxuries once in a while? Or perhaps you like to save your pennies? Sharing your values (and money habits) is important, as you’ll understand where the other is coming from and what’s important to them. If it doesn’t seem like you’re compatible, stay open to each other’s ideas and opinions. Often, you might find a compromise.
Put your cards on the table
Share details about your credit cards, debts and your bank statements. That’s right – it might be uncomfortable, but sharing your financial situation with each other now can save you from any unpleasant shocks down the line.
State any worries or problems clearly
If you have a particular money worry – be it a debt of your own, or the amount your partner spends on luxuries – it’s time to air it now. Getting the issue off your chest and into the open might be a relief and you can discuss potential solutions together. If you’re worried about your partner’s spending habits, aim to keep your language neutral rather than accusatory, focusing on why you’re concerned, rather than blaming them. For example, stating, ‘I’m concerned we won’t have enough to cover the mortgage over the next few months if you buy X,’ is more diplomatic than saying, ‘You’re terrible with money and always spend before thinking it through.’ This will also help your partner understand why it’s important.
Share your financial goals
Whether it’s topping up your savings each month, making overpayments on your mortgage, saving for a holiday of a lifetime or paying off your credit card debt, understanding each other’s goals is a great starting point from which to set financial expectations. Can you align any short- and long-term goals? Plan for how you can turn these into reality.
Talk about your bank accounts
Pooling your resources into a joint bank account can be a good idea… but you might also like to keep your own separate savings or bank account, too. Many people feel like they’re giving up their freedom by going all-in on joint accounts. If you’re worried your partner overspends, it’s sensible to keep your personal funds separate. Decide which costs should be shared and perhaps create a joint account that you both pay into every month. Then you can manage your remaining monthly funds independently.
Decide who will pay what
When it comes to home ownership, there are numerous costs involved, including the mortgage, monthly household bills, insurance and maintenance costs. How will you split these? If one partner earns more, does this mean they should contribute more, or would you like to keep things equal? What will you do if one partner leaves their job, gets made redundant or decides they want to spend money on retraining or going back into education? Being clear on these situations now is important, as it can save a lot of resentment in the future.
Speak to an adviser
Speaking to a financial adviser, either together or separately, is a great idea, as they can help you figure out your situation and plan for the future. They might also raise questions or situations you haven’t yet considered. We’re here to help you figure out a financial plan.