Money may not be romantic pillow talk, but a little financial planning does much for your love life down the line.

Consider these tips early on in your relationship.

    • Get acquainted. Before your relationship becomes serious, talk about your finances calmly, openly and honestly when there’s no particular money issue at hand. Be prepared to compromise, as there are sure to be differences of opinion, and respect each other as equal partners, with an equal say in money management.
    • Divide and conquer. A good way for cohabiting couples to organise their cash flow is to have three accounts: one for you, one for your partner and one joint account. Once you’ve determined the total cost of your shared living expenses, you should both contribute your portion to the joint account each month based on your share of the household income. For example, if you make R60,000 and your partner makes R40,000, you’re responsible for 60% of the household expenses. Whatever money doesn’t go toward these costs stays in the individual accounts to be used at each person’s discretion.
    • Ties that bind. You both need to agree on your long-term financial goals, from paying off the bond to saving for retirement. Discussing money with the person you hope to spend the rest of your life with doesn’t mean that you don’t love him or her. It means that you love him or her and yourself.
    • Put it in writing. Seeking independent legal advice can be a valuable investment to protect your financial situation should one of you die or if you separate. (It’s estimated that money issues cause 90% of divorces.) If you’re contemplating a second marriage, protect your assets (especially if you want them to go to children from a previous marriage) by creating a legal trust to spell out which of your personal assets will go to your children rather than to your new partner.
    • Fools rush in. Don’t automatically combine all your debts. You can help to pay off loans without becoming officially responsible for each other’s debts.
    • Designated bill payer. Get the one who’s best at managing the daily household expenses to pay the bills. However, the other person should be involved, know what needs to be done and how to do it.
    • Credit cards. Each partner should have a credit card in his or her own name to maintain a separate credit history. If you divorce or your partner dies, it will be difficult to get a loan or credit card without it. Having a joint card in both your names doesn’t work.

If you simply can’t talk about finances, see a financial or marriage counsellor to help sort out your financial issues.

 

Sources

Chatzky, Jean. 2002. Talking money. Warner Business Books
Orman, Suze. 2010. Action plan: new rules for new times. Spiegel & Grau.