Greater regional manager and finance guru for WHITE Magazine, Kevin Buckley, explains to newlyweds (and the rest of us for that matter) why it’s important to talk through money matters with your partner.
Someone once said “The love of money is the root of all evil". We all need money to survive and have a happy life…but the key is to be in control of your money and not let it control you. That means being on the same page about money as your partner.
Money doesn’t have to be the root of all evil but it is essential to pay for weddings, cars, putting a roof over our heads and food on the table. It is also one of the major things to put strain on any loving relationship.
You and your partner are together because of some common interests and values. You will have talked about your plans for career and children but have you talked about your attitudes towards money? Different upbringings mean that you may have different values and ideals. For example, are you and your partner spenders or savers? Do you want to own your own home or are you happy renting?
Make a time now to sit down and talk about your goals, decide who is going to manage the finances and draw up a budget. Your goal may be to save a deposit for an apartment, to buy a car or take a special holiday.
Whatever your goal, agree on it, write it down and put it somewhere you can both see it.
A budget doesn’t have to be a difficult task. It can be as simple as two columns – one for what is coming in and one for what is going out. Start today, because tomorrow never comes but bills do.
Setting up a new home, paying rent or mortgage payments, and ongoing bills, all take a big chunk out of your take home pay. You may no longer be in a position to just buy whatever you want. A budget can help you to look at areas that you can cut. Be brutally honest about what you spend – a coffee every day all adds up. Make sure that you allow enough for some entertainment though – life is meant to be enjoyed.
If you are establishing joint finances, make sure you consolidate debts, and pay off high interest ones like credit cards first.
If one person takes charge of the main finances, set clear ground rules around this. If you want to put money into a special joint account, you can require both people to sign for withdrawals. That way you have to agree on how to spend the money.
Now, to your specific goal. If you are saving for a home make that goal specific. Make sure it is achievable; you can always build on it. For example, let’s say you are going to save $30,000 in 18 months. Arrange for that saving to automatically come from your pay packets into a separate, higher interest earning account so you are not tempted to use it for other purposes.
Finally, make sure you take the time to celebrate together when you achieve your goal. Reward yourself with a night out or in some other special way.
Talking about money with your partner will help to ensure that money is a force for good in your new household rather than for evil.
Kevin wrote this article for the latest issue of White Magazine