Having the discussion to join your finances is a great idea but often easier said than done.
Common scenarios we see are that perhaps one of you has stopped working as you are about to start a family, or maybe you have purchased a home or moved in together. Well, it is like you need to have the conversation about who pays for what but have no idea how to discuss merging your finances, live off a reduced income or increased expenses. Sharing is caring but a few helpful tips from your Pursue Wealth Dream Team will also mean it can be a lot less stressful!
Firstly, you both must WANT to take action. It takes two to tango, you both contribute to your lifestyle and finances in one way or another and by sharing the load you support each other.
Step 1- Each of you should write down your goals and money values separately in preparation to discuss them with your loved one. Ensure they a measurable, have time frames and why it is important to you. Have an open mind through the next steps and be willing to compromise within reason.
Step 2- Have that, not so awkward, conversation about combining your finances. Discuss your concerns, money habits, goals and any questions you may have. The number one cause of relationship breakdowns is money so having open communication is key.
Step 3- Take stock of your financial situation. Record your (now) joint goals, assets, liabilities, income and expenses. PW insiders tip: a wine in hand can help assist in assessing the situation.
Step 4- Do you and your partner share the same attitude towards money? If not, discuss this, work out what you both value and try to understand each other’s position. Try not to throw a book at their head if you can’t get on the same page (pun intended). If this process was easy you would have done it already. Remember the hardest things in life are often the most rewarding.
Step 5- Work out who in your relationship is going to be the financial controller. Who is going to hold you accountable with the expenses and staying on track to your goals. You both need to be happy with this decision, so make it together. Reminder financial controller does not mean you are the boss (even if you think you are), it means that you keep the team focused and inspired to keep tracking towards your joint goals.
What do you need to do to join your finances?
Work out your goals, whether it be paying the mortgage, saving for a holiday or having play money for the fun stuff, articulating your financial goals is the first step to joining your finances.
Set up your budget (trust us, no one wants to do this, but you can’t hide any longer) include all your income and expenses.
Look at setting up joint accounts for your bills, groceries and fixed expenses. If you don’t earn the same income as your partner and you aren’t comfortable contributing unequal amounts, look at contributing the same percentage of income. PW Tip: If you are in it for the long haul it has a way of working out in the wash, try work towards a goal of not counting who earned what dollar and joining all income and all expenses as a team effort.
Set up a lifestyle account that includes the costs of both your goals, whether that’s going out for dinner, gym expenses or having a cheeky wine. This should be used on something that is important to you both, working out what is affordable and weighing up the need vs want and now vs future.
If you are still with us and haven’t killed each other yet, pat yourself on the back, this is an emotional and financial hurdle but trust us, the juice is worth the squeeze.
Remember you can still maintain your financial independence by keeping an everyday play account separate with an allowance, but by joining your other accounts you can share the load.
Combining finances can be scary, but it doesn’t have to be. Talking to your partner is essential, but if you need assistance or some reassurance, feel free to book a time to chat here where we can help you share the load!