Money can have a significant effect on our relationships with our partners, whether we want to admit it or not. You may think finances should not be a main priority, especially at the beginning of the relationship, but if you fail to sort your finances out together as a couple, the problems it can spark will quickly begin to deteriorate an otherwise successful partnership.
When it comes to money matters, here are 5 rules for splitting costs:
Good luck!
When it comes to money matters, here are 5 rules for splitting costs:
- Keep everything separate. If you're a young, unmarried couple with no kids, there's no reason to join your bank accounts and have a common wallet. Since you don’t have to pay any significant expenses like mortgage costs or your kids' tuition, keeping things separate at this point in your relationships will save you from trouble down the line.
- In certain circumstances, practice the tactic of, “whoever earns the most, pays the most.” When your partner earns slightly more than you, but there's not a significant disparity, it wouldn't be beneficial for either party to ask them to pay more. If you find yourself unemployed, however, it's understandable to ask your partner to help support your transition to a new career. Additionally, if your partner makes exceptionally more than you or wants to live an extravagant lifestyle a bit beyond your personal budget, suggesting she contribute more to your combined finances may prove to be the fairest solution.
- Don't share assets. If you're getting married and don’t want to end up splitting your assets via the legal route, avoid sharing assets from the start. This includes cars, property, furniture, and funds in bank accounts. You may feel it’s not necessary or even an overreaction, but keeping assets separate will save you a great deal of time and stress in case things go sour later on.
- Have backup plans in place just in case something unexpected happens. Certain events like a severe illness, job loss, or a sudden death can shake up your daily life and cause emotional and financial stress for anyone involved. We all hope something like this will never happen, but it would be wise to sort things out ahead of time so your partner and other family members are not weighed down by the costs of one of these unexpected events. Things to consider planning ahead of time include insurance plans, medical coverage, and retirement arrangements. Make sure your family is cared for, no matter the incident.
- Similar to your assets, don't share loans or debts. Taking partial responsibility for your partner's loans and debts can feel like the right thing to do at times, and you may sincerely want to help them out. However, it's important to consider what might happen if you split with your spouse and find yourself left with all their debt. Be positive that if the worst happened, you'd still be able to cover the necessary costs without the assistance of your newly ex-partner.
Good luck!
