Moving in with your significant other requires drastic shifts in the way you manage your finances as compared to your single days.
When you were single, you could make your own decisions, do your own planning and keep your own savings without having to report the details to anyone else.
However, it’s not the same when you get married and begin living on your own with your spouse. When you move in with your spouse, it’s not just your new house that needs renovating, but both of your entire money blueprints as well.
Below are 5 of the common mistakes that couples make when they start living together. These are significant mistakes that we need to avoid as they can cause unnecessary problems.
1) Not Disclosing Each Other’s Incomes
For one reason or another, some couples do not like their spouses to know exactly how much they earn in a single month. Some others like to keep their bonuses and additional perks a top secret – even from their other halves.
But when you are living together under one roof, this is a significant piece of information that is needed in order to make proper money decisions and planning.
Trying to plan your finances or make daily purchase decisions without knowing your total combined income is like shooting without aiming and is extremely risky.
If you know exactly how much money you will be earning this month, the next month, in a few months’ time or at the end of the year, you will be able to more accurately plan for your current and future expenses.
For example, if you want to go for a vacation in 3 months’ time, you will know which destination is within your means as you will have reliable information on how much you can save by then.
2) Not Having A Combined Savings Account
Not having a combined savings account with regular shared contributions can lead to complications in the near future.
If you are relying on one another to somehow fund this or that expenditure on an ad hoc basis without clear boundaries, no matter how hopelessly romantic you are, there are bound to be subtle feelings of imbalance or unfairness somewhere down the road.
Now that you are sharing one home with your soul mate, it is highly recommended that you get a combined savings account. Most likely, from now on, you will have to make several decisions that would affect the both of you equally.
Thus, it is good to have a combined savings account to which both of you contribute a mutually agreed amount on a monthly basis.
You can use the money from this savings account to fund emergency expenditures or for your joint overseas trips etc. Having this account will eliminate the stress stemming from doubts as to who should pay for what only when such a situation arises in future.
3) No Clear Discussion On How To Settle The Bills
Again, this is also a problem of lack of proper communication on daily household matters.
Perhaps, in your dating years, you might have been used to the ad hoc generosity of one partner or the other; taking turns to pay for your expenses. However when you are living together on your own, you will have certain fixed daily, weekly, monthly or yearly expenses.
To prevent future disagreements on such matters, it is best to get this clear right from the beginning.
Decide who will settle which bill. If both of your incomes are more or less the same, it will be easier to add up all the bills and divide into half. Make sure each of you contribute this amount on a regular basis.
If one of you earns more than the other, you can divide your bills according to the percentage of your income. So if you earn more, you help to settle slightly more than your spouse/partner.
4) Lack Of Shared Values Regarding Money
This is another important issue to address when you begin living together.
What do I mean by shared values with regard to money?
The following are some example questions you can ask yourself to find out your shared money values:
1) What do you or your partner think is a want and what you or your partner think is a need?
2) Are you OK to live within your means or do you always strive to meet societal expectations and thus spend more just to fit in?
Those are crucial questions you need to ask yourself and your partner in order to find out if you both are on the same page when it comes to money. Else, it is very easy to get into disagreements on how each of you deal with money.
5) No Proper Planning For Future Expenditures
Do you both sit together to discuss your future needs? For example, child-rearing expenses, medical expenses of aging parents, retirement savings etc.
As soon as you start living together, you should begin planning how you are going to sort out these future expenses. It is better to have mutually agreed goals and plans for such matters so that you both have more clarity and support each other on your journey.
None of you will be left feeling alone at any one point.
However, if you fail to look into this crucial aspect, either of you, at some point in your life together might feel like you are bearing the brunt of everything and this would be detrimental to your unity and harmony.