Talking about money, at any stage of a relationship, can be difficult. However, NOT talking about it can result in problems that only escalate over time. Whether it is you or your partner who feels the most uncomfortable opening up about your finances, there are certain things that are worth sharing as your relationship progresses to help your future to run smoothly.
Here are the big questions I would recommend you ask your partner, and when to ask them:
The Dating Phase
This is probably when you will be most uncomfortable asking questions about money. Everything is new and exciting, and you certainly do not want to put your new partner off by coming across as money-obsessed. That said, there are a few key questions that you can ask at this stage to help establish if you are likely to be financially compatible.
What do they do? A little bit of online digging could give you an indication of their current earnings. This might seem a bit over the top, but if they have a good job and very little disposable income this could indicate some problems with their money management.
What is their living situation? Do they live on their own, with friends or with parents? Are they happy with it? (It should be noted here that my better half was living with his very lovely mum when we first met – it is not necessarily a “run in the other direction” situation!)
Who pays the bill? Is it whisked away before you have a chance to look? Do you go Dutch? Do you get looked at expectantly to pick up the tab? Sometimes this is down to past experience and – dare I say it – gender stereotypes, but it’s worth knowing early if a relationship is going to cost you more money than you’re comfortable with!
Your First Holiday
Once you have been seeing each other for a while, you may want to consider a weekend or short holiday away. Spending a few days with only each other for company can be a test on an early relationship as it is, but it can also help you each get a better idea about the other’s financial situation.
Where are you going? Agreeing the budget forces you both to open up about how much you can afford to spend on a holiday. Pro tip: Don’t forget spending money – Valentine’s Day 2014 was spent in Iceland (lovely) eating a Pot Noodle because Iceland is expensive (not-so-lovely)!
How are you paying? Is the money coming from savings? Are either of you putting it on a credit card? If so, are you sure you can pay it off? In an ideal world, this is not the time to get into joint debt, or for one to owe the other, as it could cause issues later on if things turn sour.
Moving In
Everything is going hunky-dory and you’re ready to take your relationship to the next level. Moving in together is a big decision, and it warrants big conversations. This is the point where you will need to have an open discussion about your disposable income and any debts you may have.
What is your budget? Most rental properties will have a minimum income requirement based on the monthly rent to ensure that the home is affordable for you. It’s far easier to be open and honest with each other on your budget before starting your search.
How will you split the bills? Do you intend to split the bills 50/50 or divide them up based on income? Also, consider where the bills will be paid from – you could take ownership of a few bills each, but a joint account can be the easiest set-up, so long as you are both comfortable that the other is fully trustworthy and won’t run off with all the money!
Buying a House
Buying a house is arguably the biggest financial commitment you can make. You will be entering into (probably) the biggest debt of your life and both parties should really have everything laid out on the table at this point. Many of the “moving in” discussions apply, albeit on a bigger scale, but there are a few other things you will need to consider.
How will you save for a deposit? I’m a big fan of spreadsheets for this one. You may already have had a savings plan in place, but you may also be willing to up the ante now home ownership is on the cards. Are you happy to pool your individual savings for a deposit, or do you want to start again? Are you willing to make compromises in order to save faster? If family is helping you out, are all parties happy with the terms?
Have you considered insurance? One of the more romantic things I said to my now-husband shortly after buying our home was “I now have an insurable interest in you!” – A house is great, but a mortgage is a very big debt if the worst should happen. Make sure you can have the uncomfortable discussions and set a budget for insuring your financial future.
Getting Married
I like to think I’m pretty good with my personal finances, but wedding planning was hard! At least one freak-out is almost guaranteed, but planning well can keep stress levels to a minimum.
What is your budget? Pro tip: re-use your house deposit spreadsheet. You’ll need to have at least a rough idea of your savings plan and budget before you can set a date, so do this first! Don’t forget that most of the big expenses will require a deposit, so bear in mind that you are likely to need a fair amount of money early on, as well as just before the big day.
What are your priorities? When setting your budget, make sure you discuss what are your “must haves” and “wants”. A personalised ice sculpture may seem like a nice idea, but are you willing to delay your wedding by a few months in order to have one?
Going Forward
The big day is over, your savings are building up, all of a sudden you may feel really quite rich… so, what next? This is the time to talk about your longer term goals.
Do you want to enjoy your extra income on holidays for a few years? Are children on the cards? Do you have any plans to move, or to improve your current home? Is 30 too young to start considering your retirement plans? You’re getting a bit grey now, after all…
As your circumstances continue to change, there is unlikely to be any point in your relationship when you no longer need to talk about money. However, following these tips and getting into good habits as early as possible can significantly reduce the stress of the big discussions later on.